What US companies still successful after 100?

Buck, a lot of them have made it, here is the piece..

Sweet G

6/21

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IBM joins elite group of 100-year-old companies - USATODAY.com

IBM joins elite group of 100-year-old companies

By Matt Krantz and Jon Swartz, USA TODAY
 
A hundred years ago the company made punch cards, scales and clocks. Today, its supercomputers can beat human chess champions or solve mind-bending business problems.

 
 
The company is IBM. And today Big Blue joins the exclusive club of companies to have survived 100 years, a rare feat it accomplished by constantly adapting through the tumult of recessions, technology shifts and CEO succession.
Don't make the mistake of thinking IBM is a corporate old-timer that just watched technology evolve. It has remained at the forefront through the decades and tops several of its whippersnapper rivals in some regards.
Perhaps the most quantifiable hallmark is the value investors put on the company: $197 billion. That makes IBM the fifth-most-valuable U.S. company, just behind Microsoft at $200 billion and well ahead of Google at $162 billion.

• MORE: Public companies 100 years old or more (pdf)

IBM's entrance to the club of U.S. companies to see their 100th birthdays is a milestone in business history. "It's the predominant pattern that companies eventually self-destruct," says management expert Jim Collins, author of books such as Built to Last, who studies corporate longevity. Companies that survive 100 years or longer are "a special and rarefied group."

The numbers reveal just how rare it is. From the pool of more than 5,000 U.S. publicly traded companies, 486 are 100 years or older — excluding operating subsidiaries — according to an analysis by Standard & Poor's Capital IQ for USA TODAY. And just 23 private firms in the U.S. with audited financial statements are 100 years or older, Capital IQ says.

Many of the best-known companies that have lived for 100 years or longer include the stalwarts of American business, including ExxonMobil, General Electricand Chevron. Yet others, such as industrial gas provider Praxair, medical supply company McKesson and chemical firm PPG Industries, may not be household names but have served their industries' niches for more than 10 decades.

By Seth Wenig, AP
IBM's computer "Watson" faces off against "Jeopardy!" contestants including Ken Jennings, left, in January.

Tech’s speed of change

Staying on top of any industry is a feat. But adding to IBM's accomplishment is the fact it's one of the only major U.S. computer technology firms to become a centenarian.

Technology trends are so fast-moving that many companies in the industry tend to rise fast only to flame out — outpaced by younger rivals only to wind up in the bankruptcy bin or as buyout fodder. But while the speed of change in technology makes longevity a challenge, IBM demonstrated a strength shared by most 100-year-old companies: the ability to change.

IBM's legacy as one of the nation's most enduring companies was hardly a guarantee. It has risen and fallen over the years, riding the surge of popularity of the typewriter, which gave way to personal computers and the Internet. But through a rare blend of ingenuity, persistence and a strict adherence to its core objectives summarized by its motto, "Think," IBM survived not only the Depression and several recessions, but technological shifts and intense competition as well.

Throughout its 100-year history, IBM has bet on the introduction of new technology, from time clocks, butcher scales and coffee grinders; to punch-card machines and typewriters; to tape storage, mainframes and personal computers; to acquiring the consulting arm of PricewaterhouseCoopers; and, now, to smart social media, says Jon Iwata, senior vice president of marketing and communication at IBM. "We have learned, from our history, to (roll with changes) in the world, like economic downturns and wars," Iwata says. "In downturns, we learned to invest more, acquire other companies and increase R&D, for example."

"This isn't like the auto industry, where the combustible engine still exists, or oil, where many parts of the business are the same," Iwata says. "We have to let go of what we have invented. We stopped making typewriters, punch-card machines, PCs. We had to move on."

IBM's staying power is an inspiration to many companies aspiring to stand the test of time and not join the corporate trash heap filled with firms whose founders' great ideas faded over time.

Some foundations of long-term success:

•Ability to move into new businesses without abandoning core tenets. IBM is a classic example of a company that had to get into entirely new businesses, without turning its back on what got it to where it is, Collins says. If you consider what IBM's mission is, it's not about computers or technology. It's about allowing its individual employees to create ways for its customers to solve operational problems, Collins says. Whether that's a task best done with scales, typewriters or computers doesn't matter; what matters is that customers' needs are answered, Collins says.

IBM lost its focus on the customer in the 1990s to such an extent that many thought Big Blue was doomed, Collins says. The company's reliance on sales of mainframe computers, a technology largely being supplanted by less-costly personal computers, looked like the end of the line for IBM. But after Louis Gerstnerarrived as CEO in April 1993, he succeeded in saving the company from ruin in large part by understanding that if IBM stuck to its focus on customers, its core, it could survive, Collins says. Gerstner reversed the company's plans to break itself into several pieces, recognizing that corporate and government customers wanted one large technology firm, like an IBM, to do business with.

Gerstner transformed IBM from a flailing computing giant stretched paper thin in the 1990s to a world-class provider of computing services, a blueprint for its success since then. "Every market is going to change over time, especially in the fast-paced world of high-tech," says Charles O'Reilly, a management professor at Stanford University's Graduate School of Business who has written a research paper on how IBM adapted to regain its dominant place in the tech industry.

•A strong sense of purpose.Companies that last almost always put making money secondary to a broader and more ambitious stretch goal, says Vicki TenHaken, professor of management at Hope College, who has studied companies that make it to their 100th birthday.

Lasting companies have big goals that keep their employees motivated through the decades, she says. Merck (120 years old), for instance, has had a stated goal of improving human life and of measuring corporate success by its ability to defeat disease, TenHaken says.

Much of IBM's early success came from its strong internal goals to push the limits, championed by its early leader, Thomas J. Watson Sr., who coined the company's motto "Think." The company's genesis was the melding of three small companies located in three different regions: New York, Ohio and Washington, D.C. It was Watson's mission for the combined company, first called the Computer-Tabulating-Recording Co., that would guide it then and continues to guide it now.

•Careful innovation.The same thing that's often a knock against big companies — their reluctance to make huge gambles on untested businesses — is a secret to their longevity, TenHaken says. Hundred-year-old companies routinely have new businesses cooking in research labs and are constantly pursuing future businesses. Innovation is a prerequisite to survive. Yet these companies don't chase mad science innovations willy-nilly or desperately, but they "do it very carefully," she says.

At 3M, for instance, employees are urged to spend 15% of their time on side projects. Some of those projects will turn into big business in the future, but the company plans it carefully.

Grasping for that one magical market or new invention that will fix their business, in fact, is a hallmark of a company in nose dive toward destruction, Collins says.

IBM, for instance, has been building a business to develop technology to process data to help cities reduce traffic, pollution and crime. It has gradually invested $14 billion buying tech firms making software to make this a business. "It is a key bet for us" as more of the world's population lives in or near urban centers, says Mark Cleverley, director of IBM's smarter-cities strategy.

•Financially conservative.Just as long-lived companies don't take wild risks with their businesses, they carefully protect their finances as well. These older companies often have huge capital needs and widespread operations, yet they resist the temptation to load up on debt. Certainly, these companies may lag behind the profitability of their debt-laden rivals from time to time, but long term, the companies tend to make more money than their peers, TenHaken says.

IBM carries about 95 cents of long-term debt for every $1 invested in the business by investors, says Thomson Reuters. That's well below the $138 in debt to every dollar of shareholder money invested in the average company in the S&P 500.

Being financially conservative allows an older company to reward investors' patience and loyalty as it weathers the good times and bad. IBM's dividend payments to shareholders, for instance, have steadily increased over the past 100 years, despite a few large cuts in the 1990s, says Ken Winans, market historian and investment manager at Winans International.

IBM has made mistakes

While IBM has followed many of the winning patterns, it hasn't been infallible. In addition to its troubles in the PC industry as it finally ceded the business to Chinese firm Lenovo, it also famously developed — but failed to capitalize on — the first commercial router, which directs network traffic and is one of the key innovations of the Internet age, O'Reilly says: "They just blew it."

Yet, IBM has racked up more wins than losses. And the company continues to use its slow-but-steady approach to turn interesting technology into tools that can help its large customers, often behind the scenes. For instance, while social-media sites Twitter and Facebook are all the rage now, IBM's social-media activity dates to the 1970s, when its mainframe programmers started online discussion forums on mainframes.

And in 2007, IBM launched its own social-networking software for enterprises, called Lotus Connections. The next year, it opened its IBM Center for Social Software to help IBM's global network of researchers collaborate with corporate residents, university students and faculty.

In many ways, IBM's constant pursuit of doing what it's done better is symbolic of what makes companies last.

"Innovation is applied to business, technology and all manners of operation (at IBM)," says Bernie Meyerson, vice president of innovation at IBM. "We are here because we are innovators. We would not be here if not for it."