You want to build a business that lasts for over 100 years, right?
In a world where most businesses fail, the ones with longevity are worth your attention. IBM was founded in 1911. Most entrepreneurs can’t even dream of building a business that lasts as long as IBM. Over the many decades, business experts and journalists have written off IBM as a giant has been of industry. With sales of about $100 billion dollars, IBM is far from dead.
Even in a world when everyone talks about Facebook, Google and Apple, IBM products are everywhere. Every time you use a GPS, take money out of a bank ATM, check your Facebook through WiFi, play a video game, IBM is involved.
So, what is the IBM secret? How does this company have the longevity that most business will never have? So many tech companies have tried to reinvent themselves but failed. How did IBM succeed?
IBM spends billions each year on innovation. The big lesson here is that no matter how large your company becomes you can’t succeed without innovation. IBM files thousands of patents each year with a peak of 6,000 in 2011. It’s true that the number of patents is not always the best indicator of innovation, but it is one key indicator. Nothing proves IBM’s dedication to innovation more than, Watson, the smartest computer on the planet. Watson was engineered to think like a human, except much faster. Watson famously proved it’s superior thinking skills on the Jeopardy show where it easily outsmarted human competitors.
You can’t talk about space exploration without the role of IBM. In 1969, the Apollo 11 astronauts made the first manned landing on the Moon with the help of IBM computers.
Make innovation your core.
If you want to build a company that lasts, make innovation its core. Just like IBM, integrate innovation within your company culture. IBM proved that you don’t have to be a small business to innovate.
In the 1990s, when everyone started to dismiss the company as a high tech contender, IBM hired Louis V. Gerstner. For the first time, IBM recruited a leader from the outside. Under Gerstner’s leadership IBM dump it’s commodity businesses and replaced them with high-margin opportunities. While exiting the hard drive, personal printer, and other low margin areas, they focused on technology integration. During the 90s IBM also invested a great deal in software which also proved to be a strategic win for the company.
Innovation must be nurtured.
Innovative roots don’t guarantee a culture of innovation. You might have the most innovative founders, but it won’t last without managing, refreshing, and refocusing the culture.
Innovation is in the details.
Innovation is not just about R & D. Innovation must be part of every department of your business. Your business must coordinate innovation throughout your entire company. Even the way you layout your office tell if you are ready for innovation. Do people in your company have easy access to each other? You have to put just as much thought into designing how your team works together as building your product.
IBM might not have the “coolest” image in the world. But, here are some facts about IBM that would make any business cool:
- 379,000 employees. (2014)
- The IBM brand was valued at $75.5 billion by Interbrand.
- Forbes ranked IBM as the #5 most valuable brands.
- IBM is one of the most respected companies according to Barron’s.
- Some of the most significant IBM inventions are: Automated Teller Machine (ATM), Hard disk drive, virtual machine, relational database, SABRE airline reservation system, Watson artificial intelligence, and many more.
- $100 billion dollar yearly revenue.
- Engineered, Watson, the fastest thinking computer in the world.
- In 2014, IBM has received 7,534 patents. For the 22nd consecutive years the company topped the annual list of U.S. patent recipients.
IBM has been a leading technology company for over 100 years. If they stick to what got them here, they will be around for the next 100 years.
As an interesting sidenote, here is a list of Fortune 500 companies that are more than 100 years old:
- IBM, of course.
- John Deere
- Berkshire Hathaway
- Exxon Mobile
- Proctor & Gamble
- Johnson & Johnson
- JPMorgan Chase & Co.