Page 17 - The European Business Review

Strategy

To find value in the digital age,

FIND IT FOR OTHERS FIRST

BY OMAR ABBOSH, VEDRANA SAVIC AND MICHAEL MOORE

To grow their businesses consistently, leaders Value is trapped with the consumer when
must envision a much bigger picture of where potential demand is latent, say, a desire to save
value resides than they have traditionally. And time or to simplify a task. It is also trapped
they must be prepared to create much more when companies can’t see the potential sources
value than they can capture for themselves. of surplus supply that consumers possess (for
example, a vacation home that sits empty, or
hy do so many companies struggle to downtime that a consumer would trade for the
identify and capture growth opportu- chance to make money). And there is an enor-
W nities? The digital age is brimming with mous amount of societal value that remains
promise on this front. Yet regularly growing the trapped when companies and other entities
portion of a company’s share price that is based FRXOG EXW KDYHQ·W FRPH WRJHWKHU LQ SURÀWDEOH
on expectations of future earnings growth – SDUWQHUVKLSV WKDW EHQHÀW FRQVWLWXHQWV EH\RQG
while at the same time growing the portion based their immediate customers and shareholders.
1
on actual earnings – is not the norm. In fact, only (See Figure 1.) Executives
two percent of the 995 large organisations exam- The second reason is counterintuitive: To grow often overlook
ined in a recent Accenture research study have value consistently in the current business envi- opportunities
accomplished this feat over the past 16 years. (See ronment, many companies are going to need
in their existing
“About the Research” for more detail.) to release much more value for others than they enterprise to apply
Our research suggests two reasons why this capture for themselves. Many companies are still
digital capabilities
percentage is so low. viewing value creation too narrowly; they see
First, while a tremendous amount of new LQGXVWU\ SURÀWV DV D À[HG SRRO 7KH\ HQYLVLRQ DQG to serve customers
value can result from new or advancing technol- insist on margins that are unnecessarily high in a in new ways.
ogies, that value is often trapped, both within and
beyond the boundaries of any single business.
For example, executives often overlook opportu- Figure 1: The Bigger Picture of Value
nities in their existing enterprise to apply digital
Value trapped in failure to engage in profitable
capabilities to serve customers in new ways, and Society partnerships to solve societal issues,
thus to increase revenues (rather than solely to such as the need to recycle electronic waste.
reduce costs). In their industry, value is often Value trapped in underused private
trapped where outdated infrastructures serve Consumer assets, such as vacant homes in popular
tourist areas.
scores or even hundreds of companies and
where change would upset the status quo – even Industry Value trapped by lack of cooperation and
investment in shared infrastructure, such
though the status quo does not support accel- as charging stations for electric vehicles.
erated adoption of new products and services.
Value trapped in limited use of digital
(It’s also possible that a few companies in any Enterprise technologies (such as smart meters) with
JLYHQ LQGXVWU\ DUH DOUHDG\ EHQHÀWWLQJ IURP LQQR- power to transform business models.
vations that, if shared, could serve many more
and grow the pie for everyone.) FOUR AREAS OF TRAPPED VALUE

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