The state of a business’s industry can determine long term success

What determines a businesses long-term success? Some researchers argue it comes down to industry timing.

Aside from market appetites, company productivity, marketing reach, or any other factors that weigh into a business’s impact and durability, a new study found that the longevity of a company depends on the state of the industry during its time of inception – and the general environment in which it grows.

According to D. Carrington Motley, an instructor in entrepreneurship at Carengie Mellon University, the founding conditions of a company could weigh more on its long-term trajectory than changes in the market.

“A venture’s performance following environmental change depends on its internal processes,” he said in a press release. “Environmental conditions at a business’s founding shape those processes, and they quickly become cemented and embedded in beliefs about how to operate.”

Although understanding industry norms and trends has long been held as a key to entrepreneurship success, Motley and fellow researchers found that social, economic, and technological changes make industry knowledge or prior experience increasingly less relevant. This is because teams need to adapt to developments that previously-stable industries were unprepared for.

Motley and other researchers examined the performance of more than 1,000 ventures, all of which were founded from 1960 to 2011. These businesses specialized in a wide range of industries – from energy and utilities to agriculture – and the research team assessed data from the Bureau of Economic Analysis to measure how active and changing different industries were when each company started. On top of this, the researchers used alumni survey data to understand how long businesses lasted.

The research found that companies achieved the most success when changes in the market match the conditions they started in. But the study also found a stabilized industry environment can make a company less likely to succeed if the team is accustomed to perpetual change.

Wesley Koo, another co-author of the study, said “in more predictable environments, being more aggressive can produce better outcomes.”

This could come down to risk-aversion.

“The risk of untested assumptions is less, so continued use of risk averse processes produces fewer benefits and may detract from a venture’s ability to respond to opportunities.”

The study found that “slower decision-making” was a key factor in the long term success of a company.

When a business started in

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Business’s ‘It’s not my problem’ IT problem

How many times have you heard a variation of “Business and IT need to work better together”? That piece of advice contains one of the most important shifts companies can make to establish a technology capability that enables them to compete effectively in the digital age.

Some companies have made changes, such as giving product managers new product-owner roles. But without sufficient training or changes to team dynamics, those shifts often remain superficial and don’t improve team performance. Too many companies are still too quick to point the finger at IT for every technical woe, from development delays to cost overruns. Casting IT as scapegoat can be a hard habit to change.

That’s not to say there isn’t plenty of room for improvement on the IT side of the house. Efforts to modernize technology—from addressing tech debt to migrating to the cloud to building up tech talent—all require significant improvements in how IT works and where it sets its priorities. But in a time when the technology capability is a source of competitive advantage, why doesn’t that happen more often?

There are many reasons, but the solution comes down to something that’s deceptively simple: if IT is to become a real driver of value, both business and IT must overcome bad habits and make a real commitment to being partners. That implies adoption on both sides of processes, mindsets, and capabilities that reinforce the mechanisms that nurture habits that can improve technology performance.

The trouble with go-betweens: Accountability

Because technology can seem confusing, opaque, or intimidating, those on the business side prefer to leave it to the IT experts. To bridge the disconnect, companies have turned to dedicated “go-between” roles as part of a well-meaning effort to make IT more responsive and customer oriented. Individuals variously designated as “translators,” “demand IT,” “business requirement managers,” or “IT process managers” take business requests and turn them into clear requirements with instructions for workers on the IT side, many of whom work offshore.

Unfortunately, the effect of these roles is often reduced accountability on both sides of the divide. On the business side, managers are content to define requirements without understanding how technology can best deliver on them and to, in effect, wash their hands of the whole IT development process. On the IT side, translators often simply accept requests from the business side without understanding the core issue, so they don’t think

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