Will you outlive your company?

The U.S. Small Business Administration reports that 40 percent of all small businesses fail within the first five years of business. Recent research suggests that the average lifespan of the typical corporation is less than 50 years. Such statistics suggest that most of us will outlive the companies we work for.

What can owners and investors do to ensure that their companies not only survive, but grow and prosper? In the volatile marketplace of the 21st century, there are few simple answers.

Arie de Geus, author of "The Living Company" presents findings from a study of 27 companies ranging in age from 100 to 700 years. De Geus discovered that long-lived companies shared four common personality characteristics that set them apart from others and that seemed to explain their extraordinary longevity.

Those four special traits were:

A sense of community. Companies that created an environment where people played an important part in the company's success tended to be more able to attract and keep good people. This sense of belonging emerged from a partnership forged with employees along with the knowledge that the company's wealth benefited the entire organization, not just the inner circle of leaders.

Sensitivity to a changing world. Long-lived companies were tuned in to their world—not just to their markets. They sensed the changes around them and responded in ways that enabled them to thrive. The 700-year-old Swedish firm Stora transformed itself to sustain itself—moving into new markets and abandoning old ones.

Tolerance of diverse ideas. Leaders of successful companies in de Geus' study allowed employees to stretch the company outside of its comfort zone. These leaders recognized that their future business might be very unrelated to their current business and that they had to be receptive to different ways of looking at the world and their company's role.

Conservative financial management. De Geus found that companies that survived for a century or more didn't rely upon the approval of financiers to decide their future. They maintained cash reserves sufficient to give them financial independence. When owners sensed a new direction to the market or an emerging need, they had the resources to respond. Their financial conservatism gave them control over their destiny.