Lessons learned from the demise of Kongo Gumi, the world’s oldest business

BusinessWeek has some interesting insights into how Kongo Gumi, a temple building business that is apparently the world’s oldest, survived for 1,400 years and what led to its demise in 2010.

Japanese temple builder Kongo Gumi, in operation under the founders’ descendants since 578, succumbed to excess debt and an unfavorable business climate in 2006.

….To sum up the lessons of Kongo Gumi’s long tenure and ultimate failure: Pick a stable industry and create flexible succession policies. To avoid a similar demise, evolve as business conditions require, but don’t get carried away with temporary enthusiasms and sacrifice financial stability for what looks like an opportunity. These lessons are somewhat contradictory and paradoxical, to be sure. But if sustained success came easy, then all family businesses would have a 1,428-year run.

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