The European Business Review - July-August 2019

28 The European Business Review July - August 2019

The average lifespan of companies is

becoming shorter. For them to survive the

competition it is important to learn to jump

across knowledge disciplines and create new

knowledge about how a product is made or a

service is delivered. Using the Leap Readiness

Index, the authors measure the readiness of

financial institutes to leap to a new frontier of

know-how to prepare for the future.

I

t’s common knowledge among executives

that while humans now live longer, companies

die faster. In 1958, the average lifespan

of companies listed in Standard & Poor’s 500

Index was 61 years. Now it’s less than 18 years,

according to a study conducted by McKinsey.

Others have suggested that nearly 50% of the

companies currently in the S&P 500 Index

will be replaced over the next 10 years. These

companies will be bought out or merged or go

bankrupted, like Enron and Lehman Brothers

and Polaroid and Kodak. And those who escape

may still struggle to restore their former fortune,

such as General Electric, Panasonic, Sony, ABB,

Citigroup, UBS, and the like.

Every CEO is presumed to understand

that, and also every executive, whose c-suite

office either is or isn’t situated at a current

S&P 500 company. It’s therefore no surprise

to these executives that in 2019, the impetus

is to leverage connectivity and artificial intel-

ligence as part of their corporate strategy. No

carmaker, for instance, will speak to investors

without mentioning “future mobility.” BMW is

a “supplier of individual premium mobility with

innovative mobility services.” General Motors

aims to “deliver on its vision of an all-electric,

emissions-free future.” And Daimler, the maker

of Mercedes, sees the future as “connected,

autonomous, and smart.” In fact, automakers

are on the cusp of making a major leap in their

know-how from mechanical engineering with

HOW SOME COMPANIES

BEAT THE COMPETITION...

For Decades And Even Centuries

BY HOWARD YU AND JIALU SHAN

Strategy

Theimpetusis toleverage

connectivity and artificial

intelligence as part of their

corporate strategy. No

carmaker, for instance, will

speak to investors without

mentioning “future

mobility.”