Businesses face more challenges from external factors than ever before. The economy has always had either a positive or negative impact on the general business climate, and this era is no different. With increasing regulatory demands from government agencies, tighter policies, a well-defined and supported litigious culture, and ever more advancements on the digital front, can be the cause of death, or at least wounding, of many companies.
According to Mark Perry, Professor of Economics and Finance in the School of Management at the University of Michigan, many of today’s fortune 500 companies will not survive the next 50 years. Perry conducted a review of top companies from 1955 to 2011 and found that only 13% of those companies survived that stretch of time. The remaining 87% had either gone bankrupt, merged with another company, gone private, or are still in existence but no longer a top ranking company. Most of the companies that were so profitable and powerful almost 60 years ago are unrecognizable or completely forgotten today. That is a lot of disruption in a relatively short period of time.
What do the companies that survive, and even thrive, have in common…Agility. This is a word that by Webster’s definition means “able to move quickly and easily, smart, clever”, and bears true for the business world as well. With the external environment evolving faster than most businesses can adapt, only the most flexible and agile businesses will be able to withstand the pressures of change. The agile business has resources to pull from when the economy tanks and consumer spending goes down, or the government imposes higher taxes that hit the housing market hard. Resources may be in the form of liquid capital, but it also may be found in business connections, technology, or innovative ideas.
When an organization is agile, they more easily adapt to the changes in their priorities, as dictated by the external conditions and their clients. Companies that work efficiently, meeting the needs of their clients, are in the best position to build a greater and more profitable client base. Not only is speed and efficiency critical to the agile business, but smart business anticipate their clients’ needs and develop a strategy for meeting them. In addition to the micro view of anticipating change, smart companies can see the changes coming from the external environment before they crash into it. This ability to anticipate change and plan for it puts any business at an advantage over others in their industry.
The concept of an agility is one that we may be hearing more about as the economic and business climate continue to shift. At R&F Commercial & Debt Equity, we have developed an agile business model, based on decades of combined experience, which allows us to forecast changes and predict the impact, as well as create solutions and opportunities out of what other businesses might see as threats and challenges. Connecting investors with opportunities requires a knowledge of the current landscape to best facilitate a win for all parties. Contact us for more information.