The Corporate Longevity Code

Every company has its own \"compass\" to navigate in the market realities

The Corporate Longevity Code
564 ~ 12 мин. четене
Автор: Tatyana Yavasheva

Companies and people are alike in regards to being born, existing, setting down and others emerging in their place. In this economic labyrinth there are companies that are short-lived, others have a turbulent life, and some can go through all the difficulties and enjoy being useful to people. If there is a formula for corporate longevity, it is probably hiding in the answer to the question of how an English lawn is created: "mowing-watering, mowing-watering and doing that for 300 years". This is the purely formal side. The essential factor is that in spite of changes in attitudes, circumstances, and technologies, they always find a way to be useful to people. If there is a necessity for the products and services of a company, if it adds value, it will be sought after and it will continue to exist.

A string of decisions

The occasion to focus on the topic of corporate longevity is the anniversary of our magazine, which has been on the market for three decades. Many media no longer exist, and we are asking ourselves which organizations have the chance to live long and well. Hardly any management of a company wakes up every morning with the idea of making a patent for its recipe for corporate longevity. It is just that every day in these organizations answers to specific issues regarding their development and survival are looked for. The long life of a company is the result of countless daily struggles, the interference of many factors and the coincidence of circumstances, which have created an opportunity for the company to survive, despite the difficulties and trials of all sorts.

Useful ingredients

Company philosophy is important, it defines the core of an organization. Many companies recognize that innovation is an integral part of their sustainability model. They are looking for new nonstandard solutions that give a competitive advantage to their customers and to themselves. Teamwork is also not a hollow concept, it is the engine of the endurance of any business. Accuracy and integrity, creativity and diligence, flexibility and high quality, the ability to keep up with expectations, but also the ability to create expectations - all these are important in the way forward. What else ...

On the topic of corporate longevity, we turn to business leaders of companies in different sectors with different experience, scale and market presence.

Assoc. Prof. Dr. Nikola Dobrev, Chairman of the Board of Directors of KCM 2000 AD and of the Supervisory Board of KCM AD:

We are looking for non-stereotypical and innovative approaches

Each company must have clear concepts for its mission, vision and market behaviour which have to be constantly up to date

Eng. Dobrev, this year Economics magazine turns 30 and KCM is close to being 2x30. What would you define as the main reason for the longevity of a company, which not only has a long life, but is also developing successfully?

The longevity of each company depends on its ability to comply with the changing market and competitive environment in a timely manner, without going beyond morality and honest business relationships.

You have the privilege to lead a successful venture. From the position of experience - what should a company do, so that it does not go off the rails?

Each company must have clear concepts of its mission, vision and market behaviour which should be constantly relevant to the interests of the economy and society.

Competition, globalization, technology, Industry 4.0 - in this context, which questions do you need to seek answers to?

Industry 4.0 is a new challenge for the competitive ability of products on the market. For me, our primary task remains the preparation and motivation of people to embrace the requirements for the digitalization of processes.

Recalling some of the most difficult moments for you as a manager, when the fate of KCM was being decided, what has played a positive role?

In the 60-year history of our company, of which I have been responsible for leading it for more than 30 years, there have been many critical situations, due to internal and external reasons. We have always managed to get out of them because we were aware of the problems and we were looking for non-stereotypical and innovative approaches. This is why our slogan is "Sustainability in Development".

Big companies have one kind of problems, small ones - other. A moment comes when the full control of the founder puts a limit on growth. Your advice for a healthy change that will allow the company to grow?

I do not advise to follow prescriptions and ready-made solutions. Every company, small or large, should be aware of its goals, scale and growth potential at the start of the project. Quantitative increases should not be absolutized. Innovative growth, even with a small volume growth, leads to higher competitiveness and higher income.

You are the good example of a successful industrialist with knowledge, passion and a vision. How does one build such respect?

First of all, one must be honest and responsible for his behaviour and actions, respect the work and honesty of the people he works with. To justify the trust of the team he works with! That is how respect is earned.

You have gathered some of the most important moments of your life in your autobiography "Meetings on the Road". What would you say to the Buddhist lama if you talk to him about business longevity?

To the dear Chuva lama I will tell, that in order to have a longevity in business, we will observe the philosophy of millennial-old religions and stand up for our right to exist, in order to make people happier.

You are "Mister Economy 2015". What would you wish to Economy magazine?

For Economy magazine to reach and outpace the longevity of KCM and to be a good communicator in the business environment in Bulgaria.

Snejana Semova, General Manager at Saint-Gobain Construction Products Bulgaria, Weber Division:

Innovations are born out of difficulties

Companies that look forward to the future are the ones that leave a long history behind

Mrs Semova, you are working for a company with over 350 years of history. Did you manage the find the secret of company longevity?

The over 350-year history of the Saint-Gobain group is impressive. For this period, world history has seen many twists and turns that have been a challenge and an opportunity for a company. Its ability to develop quality products and solutions and to support them with the relevant service, on the one hand, to adapt and build a strategy, on the other hand, and to manage its financial and human resources effectively is a key condition for longevity. The sustainable presence of the company is also ensured by the constant introduction of innovations.

Today there is an enthusiasm to create starters, but many of them have a very short life. The Saint-Gobain Group, however, has been in existence for more than three and a half centuries and has a presence in 67 countries. How does it succeed not only to preserve, but also to expand its borders in terms of production, markets and influence?

Combining a traditional business model, based on long-term strategies, is not in conflict with the one of start-ups. It is rather the cooperation and the partnership between the two models that can provide innovation and sustainability all in one. A real example of this type of supplementation is the Saint-Gobain Group. Part of its structure is the NOVA company, whose task is to identify and promote partnerships with start-ups, incubators and accelerators.

What is the formula for success and longevity you have learned in Saint-Gobain?

Longevity and success of employees in the company is always a string of factors. The subjective element is enormous - if you are ambitious, patient, loyal and positive, you are well accepted in organizations like Saint-Gobain. The company is focused on identifying talent and is treating their needs responsibly. Here the process is two-sided, if you have chosen your desired career and are aware of the constant need for improvement, ready to accept future challenges with responsibility, then you can find realization and stay for a long time in the environment of large corporations.

The group has been present on the Bulgarian market for 20 years and in 2019, the Weber factory in Kostinbrod turns 10. What will determine the possibilities for the business in Bulgaria to grow and for the company to open new productions?

The construction industry develops at a pace that is related to the pace of our economy. The needs of the market for new homes, investment in manufacturing and commercial buildings, and the demographic factor are a driving force. On the other hand, consumers who are seeking higher comfort, coziness and security, will invest in renovating their homes. All this determines the development of the sector and the need for the production of building materials - a segment in which we are also developing. In 2001, when the company was launched, the subject of the need for energy-efficient measures and thermal insulation of buildings has just been raised. Today, this is already regulated in standards and rules, but the main problem is with their compliance and the achievement of quality that ensures lasting results. Our ambition is to be part of the circle of companies that do not stop creating innovative and more effective solutions, to monitor their proper implementation and to actively participate in creating measures to increase the level of professionalism among contractors and builders.

You must have difficulties, but more importantly, how do you overcome them?

I think companies on the Bulgarian market cannot complain about lack of challenges. I firmly believe that the difficulties are the reason for having such innovative business approaches, new and different solutions that we offer and we are being offered. We overcome the challenges with reason, logic, positivism, responsibility and clarity about the consequences. I am convinced that it is precisely the way we deal with the difficulties that distinguishes us and makes us stronger.

Companies are companies, but they are run by people. To what extend people make the companies and to what success depends on the ones in charge?

The saying "The most valuable resource of a company are its people" is fully applicable to Saint-Gobain. Evidence for this is the fact that for the fourth consecutive year the Group received the prestigious certificate "Best Employer in the World", awarded by the Top Employers Institute.

The world is changing, technology - too. What challenges do you face yourself to keep the business you manage running?

Technology is an opportunity for our industry. Industry 4.0 introduces the automation of each of the processes into a single production, it also includes logistics to customers, excludes any risk to employees, increases productivity, and makes production cost competitive. When you are in a saturated market with limited demand, technology brings innovations in regards to the application of our products. The penetration of 3D printing into the construction of concrete structures is one of them. What is certain is that technology is irreversibly changing our lives, I hope in a positive direction.

In your opinion, a long history is written by those companies which…

... look forward into the future!


Deyan Vassilev, founder and executive director of и

The entrepreneur's dream is for the company to outlive them

You should not gain profit on the back of the customer - this is part of the recipe for longevity

Mr. Vassilev, you are an entrepreneur, how does the subject of corporate longevity concern you?

For me, this is a very important subject. Five years after creating the company, I learned about the statistics, according to which 95% of the newly-started businesses close down until the third year. But this should not discourage any entrepreneur, and to those whose companies are more than 3 years old - congratulations!

From the position of your nearly 15 years of entrepreneurial experience - what are some of the conditions which the company longevity depends on?

I believe that an important condition for company longevity is for the founders to have a personal mission that matches the mission of the company. After graduating from the American University in Blagoevgrad, I worked in an audit firm and then in a software company. This experience helped me create the "Moite Pari" website, whose mission is to help people compare financial products. We have had hard times, and if I did not believe it was my personal calling, I would have given up on this business a long time ago. It was particularly hard during the financial crisis from 2008 to 2011, and then there was a time of upsurge.

How big of a factor is trust?

When you are the first one in a niche, you need to build trust in the new product or service among customers. Satisfied customers make the business a long-term business, but you need to have a vision for development. Challenges never stop, you have to constantly prove yourself, keep track of trends and always be up-to-date. A product or service may have been a hit for years, but competition and technology can quickly change the preference of customers. Therefore, services need to be constantly improved and new ones have to be introduced. And that's part of the DNA of the company.

Digital transformation, however, begins to rearrange the puzzle in the financial sector. What are you doing to avoid being caught unprepared by the change?

There are examples of a number of successful companies that couldn’t keep pace with new technologies and the market is shoving them out. In the financial sector, there is an accelerated penetration of online players and banks without a single branch, cheaper payments are offered, shared lending and investment platforms appear. But customers still need to have trust. Technology does not replace trust, but without innovation, others will displace you. The Bulgarian market is developing with about a 5-10 years delay from central European markets, not to mention Western Europe and the US - this allows us to avoid some of their mistakes. Therefore, it is very important to consider the right moment for innovations, as sometimes if you offer something too early, it will not be accepted by the customers. Here people are more conservative or regulations are more cumbersome. We see how Uber was not accepted here or how digital insurance is not allowed. My belief is that if you evolve with the needs and attitudes of your customers, you will be a brand that they will continue to enjoy.

Does the advance of fintech companies lead to changes in your business?

Yes, we add the new non-bank lenders, offering loans at prices comparable to those of banks. We keep a close eye on the processes, and we notice that big tech giants create fintech companies that will change the market. What remains constant despite the changing technologies is that the client looks for a trusted person, a consultant, or an intermediary to guide them properly. It is important for us to remain a trusted place where customers can compare impartially the different products, and receive good credit and financial advice.

Even if it means earning less, in order for the customer to win?

There are really situations when we get less earnings from commissions because we recommend the best product for the customer, not the one that will bring more financial benefits to us. But it's also part of the recipe for longevity – you shouldn’t gain profit on the back of the customer. If you do it without adding any value, it will be up to a point. In addition to "Moite Pari" and "Creditland", our trusted customers will be able to use our new savings management service. However, customers will have to pay for the financial planning service. You see that we are changing as well.

Which is more important for an entrepreneur - to manage their business in a way that it has a long life or to be able to close down a business and start a new one?

During a company's development, a watershed is reached at some point, when the business can no longer be under the full control of the entrepreneur - this will limit its growth. One must learn to delegate the management. The challenge is how to make your business outlive you and continue to grow, even when you are not in the lead. No less challenging for the entrepreneur is to leave the company, selling it to a strategic investor without it losing its mission. As a challenge, this is comparable to the start-up process. From being a mother tigress and a walking barrier to business, the entrepreneur has to discover the formula of one’s own transformation. They have to find a way to entrust the leadership to people who will manage the business even better. One needs to find the right people, to transfer one’s knowledge and give them power to make decisions.

How exactly is that supposed to happen?

Business processes that do not depend on the owner, his ideas and whims must be introduced. This is a question that I need to find an answer to for myself, too. I read books on how the owners should work not for their business, but on their business. This is another kind of work. The owner to be increasingly in the role of a coach, while others to be on the field. A business would never be bought if the company's culture comes down to the owner keeping everything under his control. At one point, you just have to find a way to let your "child" get out from under your wing, but how to do that – that’s a million-dollar question. The ability to foster loyalty to the brand and faith in the mission of the company in your employees.

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