Several weeks ago, for a brief period, Tesla became the most valuable auto maker in the United States!
In 2016, Tesla sold 75K cars, GM sold over 10MM, and Ford sold 3MM. Tesla was still more valuable than either of them. Investors and the Tesla market value show that what is important is the potential of the future. Delivering innovation and a vision outplays the status quo. And, I like this a lot.
The average lifespan of an S&P Index company today is less than 15 years, where in 1997 it was 40 years.
There are those that continue to play it safe and bunt, and there are those that are swinging for the fences every time. The latter are winning. The average lifespan of an S&P Index company today is less than 15 years, where in 1997 it was 40 years. Markets demand innovation and precision in decision making. We are in the age of the outcome economy and the largest threat to the benchmark companies are startups that know themselves and are not afraid to act on it.
Why? Investors and markets don’t reward companies that don’t change their operating practices. Adapting to the new normal will be the difference between those that want to grow and thrive, and those that are case studies in what went wrong.
Time is not on your side, and there is no waiting this out.
The only thing that happens is that companies simply get left behind. Tesla is a startup that ate Detroit. The Model S was released in June of 2012. In 5 years, Tesla went from being a crazy idea to the highest valued auto maker in the U.S.
When I see this type of reaction from markets and investors, I am deeply encouraged. Markets are demanding more, faster, with bigger than ever consequences. Companies that want to thrive in the 21st century must learn to measure their ability to execute and invest in growth innovations above all others. Investors and markets want vision, innovation, and outcomes.
Companies that are making the difference today are those that are measuring their internal alignment to strategic direction, continuously. We have moved from a 1-year strategy, to a 3-year plan that adapts every 4-6 months. These are the companies that are the thought leaders of today. The largest risk is doing the same thing repeatedly. Mining the ideas our employees have while they are still in their heads is the next step in evolutionary management.
Companies that are making the difference today are those that are measuring their internal alignment to strategic direction, continuously.
Tesla has a ‘captivating impact on consumers and shareholders alike; this advantage will be difficult to replicate’, says Piper Jaffray analyst Alexander Potter. ‘In many ways, Tesla seems to play by its own rules’, Potter wrote in a published note for rating stocks. He continued by pointing out that Tesla devises ‘unreasonably fast’ production timelines and ‘spurns industry norms’.
Knowing your capabilities, measuring them continuously against demand and market shift, and executing with as little waste as possible produces the results that investors are looking for. This data lives inside of every company; it’s the smart ones that harvest it.