Page 19 - The European Business Review

IT IS A TALL ORDER TO BE MORE Illumina Releases Value Consistently, FRPSDQLHV 7KH\ FDQ XVH WKHLU SURÀOH LQ
and Broadly a variety of ways, for example, to learn
ATTENTIVE TO ONE’S LEGACY
California-based Illumina, founded in more about their genealogy, or acquire
BUSINESS AND, CONCURRENTLY, 1998, has outgrown its peers in both D WDLORUHG KHDOWK DQG ÀWQHVV UHJLPHQ
MORE VISIONARY ABOUT OTHER the value generated by current oper- 7KH WKLUG SDUW\ SURYLGHUV EHQHÀW IURP
ations and investor expectations for the release of industry trapped value –
SOURCES OF TRAPPED VALUE.
nine out of the last 15 years. It has as they get access to the portions of
done this by balancing its investments data that are relevant to their service
For society. Finally, in society at in innovation wisely, and by seeking in exchange for ceding a share of their
large, trapped value exists where compa- to unlock trapped value beyond the revenue to Illumina.
nies have opportunities to partner boundaries of its own enterprise.
SURÀWDEO\ WR FUHDWH QHZ EHQHÀWV IRU WKH Illumina’s core business is gene About the Research
general population. Take reliable access sequencing – genomics. Ten years ago, We analysed the growth of current
to electricity. Tesla recently partnered it cost the company US$10 million to operations (current value) and investor
with Neoen, a French renewable energy sequence a single human genome. In expectations (future value) of 995 of
company, and the local government in 2014, Illumina’s HiSeq X did this for just the largest companies by revenues across
South Australia, to build and install the $1000. And even with about 90 percent 14 industries in 12 countries over the
world’s largest lithium ion battery plant. market share, Illumina continues to push period 2000-2016. We calculated a two-
The 129-megawatt-hour (MWh) battery to release trapped enterprise value: its year rolling average for both measures (to
is tied to a wind farm run by Neoen; latest NovaSeq technology is expected to FRQWURO IRU F\FOLFDO ÁXFWXDWLRQV DQG WKHQ
the plant is being used to provide break the $100 barrier. calculated the annual percentage growth
much-needed reliable energy in an area Meanwhile, the company, which for each measure, for each company. We
inhabited by 1.7 million people, where reported global revenues of $2.4 billion then established an industry benchmark
power outages and shortages have been in 2016, is also focussed on growing the based on the median performance within
the norm. For Tesla, the project was a size of the pie overall, and on staking each of our 14 industries. To establish
time-critical proof that it can deliver on a claim in the new markets it is helping an indicator of high performance – a
LWV SURPLVHV EXLOGLQJ FRQÀGHQFH LQ LWV to create. In 2015, Illumina formed “value release premium” – we deducted
renewable energy capabilities. Helix, an initiative dedicated to making the industry benchmark from company-
'1$ EDVHG OHDUQLQJ DQG LWV EHQHÀWV level growth. In each year, trapped value
Complementary Pursuits more accessible – and hopefully tapping release was determined to occur when
It is a tall order to be more attentive to latent consumer demand to have increas- both future and current value had posi-
one’s legacy business and, concurrently, ingly personalised services and products. tive value release premiums. Those that
more visionary about other sources of For $80, Helix takes a customer’s saliva successfully released trapped value for
trapped value. Nonetheless, visionary sample and sequence their DNA, creating at least 60 percent of the years anal-
companies improve the way the world DQ LQGLYLGXDO SURÀOH 7KHVH SHRSOH FDQ ysed (equating to two percent of the
lives and works by unleashing new then “shop” in Helix’s open marketplace sample), were classed as “consistent value
sources of value not only within, but of applications provided by third-party releasers” (the high performers).
importantly beyond the boundaries of
their own enterprise. They know that
these are not mutually exclusive pursuits. About the Authors Michael Moore (right) is a Senior
Recall the late management guru Principal, with Accenture Research.
Peter Drucker’s view: “The proper
Reference
social responsibility of business is to 1. Our research shows that increasing investor expectations
(future value) while converting previous growth promises
turn a social problem into economic into reality (current value) at a higher rate than industry
RSSRUWXQLW\ DQG HFRQRPLF EHQHÀW LQWR peers, over a period of time, enables companies to sustain
VWURQJ URRWV SURÀWDEOH FRUH EXVLQHVVHV VR WKDW WKH\ FDQ
productive capacity, into human compe- weather the unexpected storms brought by disruption in
their industry or in the broader market. In parallel, strong
tence, into well-paid jobs, and into wealth. Omar Abbosh (left) is Accenture’s roots are needed to fuel growth in new businesses, which
His words rang true when he wrote &KLHI 6WUDWHJ\ 2IÀFHU Vedrana Savic LV FULWLFDO WR XSOLIWLQJ LQYHVWRU FRQÀGHQFH 5HO\LQJ RQ RQO\
current or future value growth makes companies more
them; they ring even truer today. (center) is the Managing Director, and vulnerable to disruption.

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