A recording of Amazon honcho Jeff Bezos casting doubt upon the firm’s sustainability as a bulletproof bastion of Big Tech has raised eyebrows among business commentators, defying preconceptions not only of the $1 trillion firm’s rarefied status, but of Bezos’ public image as a leader.
In the recording – which was heard by CNBC  – Bezos said: “Amazon is not too big to fail. In fact, I predict one day Amazon will fail. Amazon will go bankrupt. If you look at large companies, their lifespans tend to be 30-plus years, not 100-plus years.” He added: “If we start to focus on ourselves instead of focusing on our customers, that will be the beginning of the end. We have to try and delay that day for as long as possible.”
Bezos’ frank comments prompted Forbes to do a little fact checking on current levels of corporate longevity.  In its analysis, the business journal noted that key stalwarts of the S&P 500 – such as Wells Fargo, Boeing and Ford – are in face centenarians. So the ‘Bezos rule’ is by no means true in all cases. However, when Forbes turned its attention to a couple of independent reports on the subject, the data began to lean more heavily in Bezos’ favour.
For example, recent research from Innosight indicates that in 2016, a corporate’s average duration in S&P’s ranking was 24 years, compared to 33 years in 1964. Indeed, Innosight tipped that figure to plummet to as low as 12 years by 2027.
Innosight pointed out that M&A activity has contributed significantly to corporate disappearances from the S&P 500, with only around a third of those vanishing acts stemming from insufficient market capitalisation. Nonetheless, Forbes noted, a recent Credit Suisse report pointed out that the average age of a firm on that index had fallen from 60 years in the 1950s to just 20 as of last year.
What sorts of things should leaders be doing to ensure that their companies won’t succumb to this trend, and will be equipped to survive as long-term concerns?
The Institute of Leadership & Management's head of research, policy and standards Kate Cooper says: “I’m not at all surprised that companies are disappearing at a faster rate – and this is attributable to a wider set of factors than Bezos or Forbes reference. As far back as the early 1940s, Joseph Schumpeter outlined his theory of creative destruction, which he described as the ‘process of industrial mutation that incessantly revolutionises the economic structure from within – incessantly destroying the old one, incessantly creating a new one’.” 
She explains: “There will always be disruption. During the Industrial Revolution, handloom weavers were depressed by the introduction of weaving machines. We are always changing the ways in which we work, and there are always substitutes – for instance, Uber and its competitors are steadily substituting taxis. AirBnb is doing the same for hotels. Human beings in business are creative. So, if we want to stay that way, it’s not for us to bemoan the fact that these waves of change will happen.”
Cooper notes: “One useful case study that comes to mind is the music industry: just look at how it still cleaves to the hard-copy CD as the central pillar of its business model – and how it continues to stigmatise downloading. But perfectly legitimate streaming platforms have taken off regardless, with Spotify becoming a household name and achieving a stock-market valuation of $30 billion earlier this year.” 
She adds: “From a leadership perspective, then, it’s all about grasping and acknowledging that change is going to happen – even though you won’t necessarily know what shape it will take – and installing people in organisations who have what it takes to adapt. Don’t mourn for the way things were. Instead, look to a future in which you and your team will stay alert to changing trends, remain committed to adding value and meaning – and continue to issue products and services that customers will want to buy.”
For further thoughts on future readiness, check out these learning resources from the Institute