For founders looking to build businesses that last for decades, the key to lasting success is to never stop thinking like a startup, says investor and author Eric Becker.
“This is a little counterintuitive. Most people associate things that persist over time with being bureaucratic, slow-moving, and indecisive,” says Becker, co-founder and co-chairman of Cresset Capital, a Chicago-based wealth management firm that manages more than $70 billion in assets. Mr. Becker has started or invested in more than 100 companies.
What Becker calls “long-game companies” are typically more “nimble” than their competitors, which allows them to better navigate the ups and downs that are inevitable in running a business. Leaders of these companies must be able to navigate difficult periods while looking to the future to anticipate changes in the market. Next, you must take decisive action to generate new ideas that will lead your company to continued success.
These enduring businesses have “the ability to really see how things are going to go and then take action when action is needed,” Becker added. “These are really everything you can think of in a small, rapidly developing startup company.”
Resilience becomes part of your company’s DNA
An example of continuously innovative thinking: Mr. Becker, of the JM Smucker Company, wrote the book “The Long Game: A Playbook of the World’s Most Enduring Companies,” which was published on October 14th.
Founded in 1897 by an Ohio farmer, the company has grown from selling apple butter from a horse-drawn wagon to a processed foods business now valued at more than $11 billion. We own brands that make everything from jams, coffee, and desserts to pet food. One of its biggest revenue sources today is its Uncrustables brand of frozen peanut butter and jelly sandwiches, launched in 1998, which is expected to have annual sales of more than $1 billion by 2024 and 2026, the company said.
“Smucker’s has been able to adapt and capitalize on consumer needs and market trends, turning a simple concept into a widely recognized and beloved product,” Becker wrote in his book. Like many other large companies, JM Smucker may benefit from its size and resources by leveraging existing relationships with retailers to stock stores nationwide.
Still, companies that can continually and successfully reinvent themselves exhibit “a level of resilience that becomes part of their DNA,” Becker said.
Shahnaz Hemmati, a veteran of two multibillion-dollar startups, said in October that some founders and executives are too stubborn or short-sighted to break away from failing strategies before it’s too late.
“If something doesn’t work, they’re able or willing to change quickly and try different things,” Hemmati said. “I think that’s the big difference between those who are successful and those who aren’t.”
Face reality and trust your intuition
Becker’s advice for leaders is about how to develop and hone your ability to identify potential problems that need to be addressed, starting with a simple gut-check question: “What am I willing to tolerate that I shouldn’t?”
Asking that question regularly “brings us face to face with reality every day.” Successful companies must do so to assess potential problems that could negatively impact their business now or in the future, he says.
Once you identify a problem, Becker recommends acting thoughtfully and decisively to come up with a solution. That could mean identifying underperforming employees or teams and creating a plan to move forward from there, or recognizing an outdated business model that needs new ideas.
Often, identifying early problems before they develop into larger problems “starts with a feeling that something is wrong,” Becker says, adding, “When I look back at the mistakes I’ve made in business, (in almost every case) I instinctively knew, but I didn’t listen.”
Want to level up your AI skills? Sign up for CNBC Make It’s new online course, “How to use AI to better communicate at work by Smarter by CNBC Make It.” Get specific prompts to optimize your emails, notes, and presentations for tone, context, and audience.
Plus, sign up for the CNBC Make It newsletter for tips and tricks to succeed at work, money, and life, and request to join our exclusive community on LinkedIn to connect with experts and colleagues.
