It would be nice to say that I foresaw the future and planned it as it eventually turned out. But at the beginning, for every firm, the overriding question is, Can you survive?

— Bruce Henderson, memorandum to BCG partners, 1976

It is well known that business environments are increasingly volatile. They are also increasingly varied: from stable to unpredictable, from fixed to shapeable, from favorable to harsh. And conditions change with increasing speed: businesses move though their life cycles twice as quickly as they did 30 years ago.^[1]See “ BCG Classics Revisited: The Growth Share Matrix,” BCG Perspective, June 2014.

As a consequence, the imperative for companies to match their strategic approach to the specific conditions that they face and to retune it when circumstances change is greater than ever.^[2]See Martin Reeves, Knut Haanæs, and Janmejaya Sinha, Your Strategy Needs a Strategy: How to Choose and Execute the Right Approach, Harvard Business Review Press, June 2015.  Failure to do so will result in deteriorating performance and the need to implement risky transformation programs.

Such a state of affairs naturally focuses attention on the very short term: on dynamism and unpredictability and how these necessitate agility and adaptation. Equally important, however, are the longer-term consequences.

We all know the stories of start-ups that overturned long-standing incumbents. To understand how the battle for long-term survival has changed and the implications for both challengers and incumbents, we analyzed patterns of entry, growth, and exit for 35,000 companies publicly listed in the US since 1950—with surprising results.^[3]We used Compustat’s database (1950 to 2013) for our core data set and then matched companies with the S&P Capital IQ database to obtain additional data points. The data set includes foreign … Continue reading