Productive Durability of India’s Top-100 Companies

The primary objective of the research into the Indian Top 100 was to explore the relationship between the Living characteristics of any enterprise reflected as Scarce Capital, Purpose, Brand, Culture, Innovation and their singular ability to instill a self-propagating capability to create financial value over time (Perpetual Machine). 

Scarce Capital

  • Size/growth scales have been long touted as conventional measures of corporate success, however they do not adequately address the ability of an organization to create lasting value. Close to 50% of the top 100 Indian companies by size/scale fall below the 70% benchmark of Scarce Capital (purpose, brand, culture, innovation) and hence below par on productive longevity. 

Durability Perspective

  • The obsessive pursuit of growth does not result in productive longevity. Instead it puts nearly 450 billion USD of value at risk for India’s top 100 companies from their durability perspective.

True Value

  • Companies which epitomize ‘True Value’ state where the Living elements drive the Machine comprise less than 5% of the Indian Top 100. A bulk of the companies 40% each are in the ‘Machined State’ (where the Living is driven by the Machine) and ‘Trapped Potential State’ (where the Living and the Machine have a tenuous link).

Study Results

  • Results point to the fact that any institution no matter how great, is at risk here and now. Even companies at peak perpetuity are subject to a range of subtle mindset risks and could progressively slide over six stages of the perpetuity S curve with fairly well defined characteristics. 

Overall

  • The crucial linkage between Scarce capital and its influence on perpetual value remains elusive to owners/stewards of enterprises. Regular testing of long-term value Beta is a step in that direction.  
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