As the year comes to a close, many of us are inevitably thinking about what 2014 will bring. For many companies, this is not only a chance to contemplate plans for next year but to consider what the next five—or even 20 to 50—years will bring. My colleagues and I have worked with clients in most stages of their longevity planning, and I can easily say the process to plan for the next year or the next 100 years look quite different.
I’ve been reflecting on longevity recently, as my own company marked 100 years in business in 2013. What are the keys to success in an ever-changing and evolving marketplace? What traits do century-old companies have in common? How different do those businesses look today than they did in the eyes of their founders?
Establishing a successful institution and creating a successful brand takes hard work. Time and time again, our clients have found success by fostering three characteristics of longevity: development of great talent, commitment to customer service and establishing a deep level of trust in the marketplace. Basically, a company is only as good as its people; customer service keeps people coming back year after year; and trust, internally and externally, gives a business the latitude to lead.
These traits certainly hold true for companies like IBM and General Electric. They also hold true for long-standing businesses in the North Bay, in all industries, from wine to manufacturing to heath care. Even for those companies that haven’t yet hit their century mark, the commitment to talent, customer service and trust lays the foundation for their futures.
But I’m not sure if this is enough anymore.
The world is changing. Rapidly evolving technologies continually impact how businesses operate. A multitude of regulatory regimes across all industries provide new complexity to navigate, and an increasingly globalized economy means most companies aren’t just competing on Main Street anymore.
Adapting to change
In the North Bay, we see these dynamics every day. Many businesses today, even family-owned ones, are far more complex than they were 10 or 15 years ago. In our client base, companies not doing business out-of-state or internationally are now the exceptions. The North Bay is also more spread out, with some companies venturing into Solano County to avoid the increasing regulations found in the more familiar and densly populated Sonoma, Napa and Marin counties. We’re also seeing a lot of consolidation in the North Bay, such as with Jackson Family Wines and Foley Family Wines, which have both expanded through acquisition. This means there are fewer players looking to make bigger plays and compete on larger stages.
In a changing world, the attributes for success are more dynamic. Businesses need more acumen, agility and answers than ever before. Those are certainly traits we watch for at Moss Adams, both in how we operate our business and how we organize ourselves to serve the marketplace. This was the case in 2012, when we were considering combining with the Napa Valley accounting firm Rabanal & Smith. We’d been considering establishing an office in Napa County for some time, but with the arrival of the recession in 2008, we knew we had to revise our expansion strategy and instead look at the possibility of partnering with a firm already in Napa Valley. Though our target was still the same, remaining agile and open to new ideas let our long-term goal become a reality despite changes in the marketplace.
This type of story has played out a number of times in the North Bay. We all saw the construction industry practically screetch to a halt at the start of the recession. But many firms found ways to move resources around to support long-term projects in the health care or public works sector and keep business (nearly) steady. Their deep knowledge of booms and busts let them keep options open and resources available for when short-term work began to return to the region. Today, it’s hard to look around without seeing additional housing or tourism developments appearing. The construction market is recovering nicely, and many firms have found ways to survive the downtimes—to the benefit of their owners, employees and bottom line.
Looking ahead at the North Bay’s economic prospects, I hope more business leaders are as optimistic as I am. Tourism is picking up and, in the next five to 10 years, we can be sure it will drive diverse economic growth in our region, be it in the construction industry due to an increase in demand for hospitality accommodations or an increase in manufacturing due to an influx of companies similar to Amy’s Kitchen, Pamela’s Products and Flowmaster.
People start companies to grow and last. For some, that includes a short-term exit strategy, and for others, longevity in their role is key. They may not all be thinking about 100 years, but they can all learn from the past. Priorities can change, as well as executives, employees and the needs of the marketplace. It’s becoming ever more evident that the companies that will succeed are those that can adapt.
Jeff Gutsch, CPA, is the partner in charge for Moss Adams LLP’s Santa Rosa and Napa offices. He’s also the firm’s food and agriculture industry leader for the Bay Area and the national practice leader of the Wine Industry Group. He also holds seats on the Schulz Museum Audit Committee, the Sonoma State School of Business and Economics Advisory Committees and the Chico State Accounting Department Advisory Committees. He joined Moss Adams in 1996.
