Long-Living Traits

According to III’s Hartwig, businesses that have stood the test of time tend to:

• Be highly focused and remain true to their core business. They avoid businesses they don’t understand.
• Embrace some concept of mutuality. For example, some of the world’s oldest firms are family owned, such as breweries and other artisan operations. Others may have a cooperative arrangement, such as in the agricultural industry.
• Exhibit altruistic behavior in which perpetuation of the species or business is evident. A strong willingness to work for the common good and to perpetuate the business is a survival trait.
• Grow slowly. “You’d be hard-pressed to find a century-old company that’s also ranked in the fastest growing category,” Hartwig said. He noted that centenarian insurers’ surplus expanded less quickly relative to other insurers. These insurers’ premium to surplus ratio tended to be lower than the overall industry. (Premiums are a rough measure of risk accepted. Surplus is funds beyond reserves to pay for unexpected losses. So the larger the surplus is in relation to premiums – the lower the ratio of premium to surplus – the greater the capacity to handle the risk it has accepted, he explained.)
• Be on the smaller side, compared to the competition. Size does matter when it comes to longevity, Hartwig said. This is also true among living species such as bacteria and insects, for example.
• Not be the most profitable. “The object of continuous profit maximization is not consistent with longevity,” he said, but a “will to survive” is still necessary.