Professional Documents
Culture Documents
on the themes
of Mercer’s best-
selling book,
The Profit Zone
Number 10
1998
Management Consulting
Achieving Shareholder Value Growth
Through Business Design
Management Consulting
Mercer Management Journal
Number 10 Achieving Shareholder Value Growth
1998 Through Business Design
7 Letter to readers
by James A.Quella and James W. Down
4
41 A blueprint for shareholder value growth
Winning through strategic Business Design
by Rick Wise
The discipline of Business Design, with its customer-centric rather
than product-centric view of business and its explicit focus on
shareholder value growth, recognizes and embraces the demanding
requirements of today’s volatile marketplace.
69 Executive summaries
Abstracts of the main articles of this issue in English, French, German,
Spanish, and Portuguese.
5
Mercer Management Consulting helps leading enterprises anticipate
rapidly changing customer priorities, economics, and environments and
then design their businesses to seize the opportunities created by those
changes. Our proprietary Business Design techniques, combined with
our specialized industry knowledge and global reach, enable us to help
clients develop innovative strategies for achieving sustained shareholder
value growth.
In our work with clients, we bear daily witness to the fact that
the time-honored approaches to strategic planning no longer
work in today’s discontinuous world. If the future is no longer a
linear progression of the past, then linear, deterministic, incre-
mental thinking no longer suffices. In this environment, strategy
can no longer be built from the inside out, tweaking yesterday’s
assumptions for tomorrow’s business plan. And with the cycles of
value creation rapidly shortening, companies that continue to
play by the old rules risk over-investing in an outdated business
model, while ceding to upstarts the opportunity to build tomor-
row’s. Errors are costly and hard to overcome.
7
This issue of the Mercer Management Journal is in essence a man-
ifesto. From the first article, which argues that today’s market-
place demands a new, more dynamic approach to strategy, to the
last, which shares some of our thinking on how to rapidly move
an organization from yesterday’s Business Design to tomorrow’s,
this Journal outlines a powerful new approach for strategy devel-
opment, one that we call Value-Driven Business Design. As
such, the issue is best read in its entirety.
Sincerely yours,
8
Achieving sustained shareholder value growth
Strategy in the age of Value Migration®
by Adrian J. Slywotzky,
David J. Morrison,
and James A. Quella
decreased cost, fielded The Vietnam war dramatically illustrated that military strategy
could no longer rely on the old rules of the game. Despite over-
technically superior whelming firepower and mass, the United States and South
Vietnamese troops were unable to prevail over the North
products, and expanded Vietnamese army, whose clear objectives were informed by a
superior understanding of geography, local resources, and psy-
their market share could chology. Building on the lessons of Vietnam, Desert Storm was
the first really modern war. The United States and its allies,
expect to reap enviable despite being the smaller on-site force, harnessed advanced tech-
nology—from satellites to smart bombs—to provide unparal-
increases in shareholder leled information to generals. This enabled them to conduct a
complex, highly choreographed, multi-fronted war that rewrote
value. No longer. Achieving the rules for military strategy. These new rules require that old-
line generals make the transition to a new way of thinking:
sustained value growth
— from a static to a dynamic view of battle, where thinking
requires a new strategy several moves ahead is now essential rather than merely
desirable;
framework that reflects the
— from a monolithic, mass-based approach, waged on a limited
times: Business Design. number of fronts, to one that focuses on fighting several
simultaneous battles, each using a different mix of troops,
artillery, and air power;
economics, which empha- We are on the cusp of an equally profound reshaping of the role
of and requirements for business strategy. Able commanders
sized the improvement such as Jack Welch of GE, Bill Gates of Microsoft, and the late
Roberto Goizueta of Coca-Cola, having mastered the new
of organization and strategic order, have achieved stunning victories for their share-
holders and employees.
command-control func-
When Strategy Didn’t Matter
tions; to relative eco- It may seem hard to believe, but for much of the post-World
War II period, customer and marketplace strategy didn’t matter.
nomics, which made use In the 1950s and early 1960s, customer demand often out-
stripped capacity, and the resulting high systemic growth rates
of tools like the “lifted all boats.” This was especially true for the U.S. economy,
which enjoyed a strong relative competitive advantage during
“experience curve” and the period. Moreover, regulation, global trade management, and
outright protectionism created relatively stable industry environ-
the “five forces” model; ments within which large-scale players had hegemony.
to efficiency economics, As the 1960s progressed, the “if you build it, they will come”
euphoria was supplanted by a need for more rigorous business
characterized by thinking. Dominant strategic approaches centered around organ-
ization economics: improving organization structure and com-
downsizing and reengi- mand-control functions.
neering. Now, the focus With the advent of the 1970s, and the balancing of supply to
demand, the focus changed again. As exemplified by the “experi-
has shifted again. ence curve” and the “five forces model,” the core of business
thinking became the identification and building of structural
advantage based on a rigorous understanding of relative supply
economics.
In this world, the rules for success were fairly predictable: Target
a high-growth market. Develop superior products through a dis-
ciplined R&D capability. Build high relative market share
through rapid roll-out, aggressive capacity expansion, and pow-
erful marketing and sales. Harness scientific management prac-
tices—planning, budgeting, and control systems—to sustain and
enhance this position. The inevitable result would be revenue
growth, scale economies, barriers to competition—and growth in
shareholder value. As in traditional warfare, scale would win.
Look at the period from 1990 to 1996 and compare the top fif-
teen companies ranked by absolute dollars of revenue growth,
Exhibit 1 Revenue and
profit growth don’t always operating profit growth, and shareholder value growth (see
correlate with value growth Exhibit 1). Only two of the top fifteen revenue growers were
Top 15 Revenue Growers Top 15 Operating Profit Growers Top 15 Shareholder Value Growers
1990-1996 1990-1996 1990-1996 CAGR
Only includes those companies that had values for both 1990 and 1996.
SOURCE: Mercer Management Consulting Value Growth Database
prises: firms with empty More and more in our research, we see three sorts of struggling
enterprises. The first, firms with empty revenue or market share, are
revenue or market share, characterized by continued profitless growth. Many consumer
electronics and PC sales and distribution companies are prime
characterized by continued examples. The second, bottle rockets, are companies that climb
rapidly to vertiginous heights of stock market success and then
profitless growth; bottle just as rapidly fall back to earth. Netscape—relying on ubiquity
and evanescent product superiority as its sources of sustainability
rockets, the companies instead of working to build in sources of continuing strategic
control—is an example. The third, asset monsters, are asset-inten-
that enjoy rapid stock sive firms that earn insufficient returns on their capital employed,
either because of flaws in their original business model or because
market success and then they are blindsided by rapid change. These companies find that
achieving market share goals—sometimes even with profitable
crash back to earth; and growth—demands more fixed assets and working capital than can
be deployed at attractive returns. Big steel and store-based com-
asset monsters, businesses puter and software retailers are historical examples. Some utili-
ties, because of deregulation, will soon join their ranks.
that earn insufficient
We’re not suggesting that the challenges faced by such companies
returns on their capital are new. But their incidence is increasing, which suggests that
traditional strategy approaches no longer apply. So what hap-
employed. pened? The old rules were overthrown by five quiet revolutions:
Exhibit 2 Shifting
Change Drivers
customer priorities and
new Business Design
alternatives drive Value Boundary Changing Industrializing Entrepreneurial
Blurring Globalization Role of Distribution Support
Migration® Information Channels Systems
Value Migration®
160 160
140 140
Microsoft
120 120
100 100
80 80
60 60
40 40
20 20 Intel
0 0
1977 1987 1997 1977 1987 1997
Digital Oracle/EDS
30 30
25 25
20 20
EDS
15 15
Oracle
10 10
5 5
0 0
1977 1987 1997 1977 1987 1997
Exhibit 3 Market value Value migrated from Ford’s vertically integrated, single-car-
increasingly flows from focused Business Design to GM’s price-laddered design in the
outmoded Business
Designs to newer ones 1920s. It moved from corner grocery stores to supermarkets in
better calibrated to satisfy the 1930s, from fragmented merchandisers to national catalogue
critical customer priorities
retailers, such as Sears, in the 1890s, and to national merchan-
dise chains—again, Sears—in the 1920s. Business Designs have
been moving into and out of phase for decades, creating and
destroying fortunes in the process.
Rein
ven
tio
n
1-2
DANGER POINT
Value
Inflow
Stability
Value
Outflow
<1
The company captures a disproportionate The company maintains its value either because Value flows away from the company toward
share of value because its Business Design its Business Design remains powerful (though Business Designs that more effectively meet
is superior in satisfying customers’ priorities. mature) or because no credible alternatives exist. evolving customer priorities.
The communications services industry market value grew The need for more flexible com-
industry has, in recent years, from under 25 percent in 1991 munications connectivity than
been an area of steady share- to over 45 percent by the end traditional wireline provides is
holder value growth. Since of 1997, reflecting the migra- driving value growth in digital
1991, the combined market tion of value to them from tra- wireless services, including
value for firms competing in ditional providers (see exhibit). those that are satellite-based.
communications services has This change is behind the value
increased by about 120 per- These non-traditional service growth of providers such as
cent, slightly higher than the providers are generating value Nextel and PanAmSat. The
increase for the S&P 500 Index. growth primarily in three areas. explosion of communications
But the majority of new value The unprecedented rise of the volume—resulting from the
growth has come not from the Internet is driving value growth reduction of cost-per-communi-
traditional service providers— in data communications ser- cation to nearly zero in areas
AT&T, MCI, Sprint, GTE, the vices. Beneficiaries have been such as E-mail and voice mail—
“Baby Bells”—but from non- non-traditional service providers is driving value growth in con-
traditional providers. Indeed, such as WorldCom, America text services, which organize
those companies’ share of Online, Qwest, and @Home. and provide meaning to a cus-
50%
40%
Baby Bells
and GTE
30%
20%
AT&T,
10%
MCI, and
Sprint
0%
1991 1992 1993 1994 1995 1996 1997
3,000
2,500
2,000
1,500
1,000
1
ABB, Coca-Cola, Disney, GE, Intel, Microsoft, Schwab, SMG, and Thermo Electron. Without Microsoft and Intel, the Grandmasters had a 19.9 percent compound
annual growth rate.
2
Market share leaders include American Airlines, Bethlehem Steel, Digital Equipment, Ford, GM, IBM, Kmart, Sears, United Airlines, and U.S. Steel.
SOURCE: Mercer Management Consulting Value Growth Database
Our research also showed that Goliaths need not always be felled
by Davids. The story of General Electric is instructive. In 1981,
when Jack Welch took the helm, GE was worth $13.1 billion. It
$239.6BB
Exhibit 6 GE’s value
growth through business
redesign
GE Shareholder
Value
$13.1BB
1981 1997
Shareholder
Value/Revenue: 0.5x 2.7x
“profit zones”; Business How did Welch achieve this feat? He worked smarter as well as
harder. Over 16 years, he reinvented GE, transforming it from a
Design, the development classic product-oriented manufacturer into a services company
where products are viewed as just a component of the total solu-
of the enterprise blueprint tion provided to customers. Welch’s capacity for Strategic
Anticipation is exceptional; based on his customer-driven under-
that will best capture the standing of where the profit zone will be tomorrow, he has guid-
ed the company through an evolution of Business Design phases
identified profit zone(s); (see Exhibit 7).
and value growth His talents for Business Design and value growth realization are
no less impressive. In the early 1980s, Welch saw that occupying
realization, the galvanizing the profit zone for most of GE’s businesses meant capturing
dominant share in chosen product markets. In response, he gave
of the organization to the organization a challenge: Be Number 1 or Number 2 in a
sector or exit the business. As the mid-1980s arrived—and based
create the new Business on his frequent interactions with the CEOs of GE’s customers—
Welch saw the profit zone shifting. Increasingly powerful cus-
Design. tomers facing more intense competition were beginning to seek
price concessions. In such an environment, GE’s sustained prof-
itability and value growth would be challenged if it continued to
view itself as a manufacturer—even one with a Number 1 or 2
market position. While good products would continue to be
essential to building good customer relationships, the new profit
zone would be solutions, services, and outsourcing.
Early 1990s
Exhibit 7 GE’s evolving
Services and Solutions for Profit Growth
Business Design focus
• Capturing “beyond the product” profit by improving
customers’ systems economics through solutions selling
• Product plus:
Early 1980s
- Financing
#1 or #2 - Maintenance
- Service
• Achieving market
share leadership to
increase profit per
product sold
• Exit any product
area where GE is
neither #1 nor #2
$250 2.7
GE
$200 2
$150
$100 1
0.5
$50 0.7
$0 0
1981 1997 1981 1997
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
United GE
Technologies
— From market share to value share. Size still matters, but the
metric has changed. Business leaders must create strategies
that not only create shareholder value, but also enable the
company to capture an increasing share of its sector’s total
market value.
executives from a variety of With that in mind, Mercer Management Journal conducted a “vir-
tual” roundtable discussion designed to glean value-growth
industries highlights some insights from top executives in a number of industries. The dis-
cussion took the form of individual interviews in which the exec-
of the issues facing business utives responded to a set list of questions. The participants
included:
leaders as they strive to
Dr. A. B. Fred Bok, chairman and chief
achieve sustained value executive officer, Philips Business
Electronics, one of nine product divi-
growth. One conclusion: sions of Philips Electronics N.V. The
division sells information products, sys-
Companies can’t just tems, and services. Philips, with 1997
revenue of 76.5 billion Dutch guilders
continue to do what they do ($37.3 billion) and 265,000 employees,
is based in Eindhoven, the
now, only better. They have Netherlands.
Mercer Management Journal: Thank you for taking the time to share
your thoughts with us. As a starting point, where does sustained
shareholder value growth fall on your list of priorities?
—Raymond W. LeBoeuf MMJ: How does a business cope with this kind of change?
not nearly enough. The MMJ: How does a management team go about identifying future
opportunities for shareholder value growth?
other piece you have to do
Pineau-Valencienne: As a company thinks about change, it’s
is redefine the game . . . important to remember that the concept of shareholder value
cannot be disassociated from what we call “competitive growth,”
change the hand, as or profitable growth. Increasing shareholder value through a
purely financial approach—for example, through cost-cutting
opposed to changing alone—is a sign of short-term vision. You may increase your
share price in the short term, but you won’t get sustained growth
the glove.” in shareholder value. I prefer the concept of “francs of value cre-
ated for each franc of competitive growth.” This concept is moti-
vating for employees and fits into a long-term vision.
—Kenneth W. Freeman
LeBoeuf: One of the things that we’ve tried to do is move from
being a more reactive, inside-out company to a more proactive,
outside-in company, with more of a marketplace focus than in
the past. If you go back twenty to twenty-five years, we were an
“invent it, manufacture it, and then it will sell” company. Very
much inside-out. We looked at: What was the next invention?
Could we make it? And if we could make it, “I’m sure some-
body’s going to buy it.” Then, in the early ’80s, we saw that that
wasn’t good enough—that the customer was damned important.
And we became more of a customer-obsessed company. Now
we’re trying to recognize that the customer and the marketplace
aren’t always the same thing. The customer is a part of the mar-
ketplace, but the marketplace transcends the customer. We try to
be out there understanding the marketplace in which our cus-
tomers deal, and in which we deal, and try to anticipate the
dynamics of that marketplace as we move forward. We think the
next move on the trendline will be built around the marketplace.
So we’re trying to be a proactive, market-sensitive company, and
be out there not just with our customers, but also with our cus-
tomers’ customers, and right down through the chain.
ships are built.” MMJ: How do you get value-growth thinking placed front and center
among your company’s priorities, get it integrated into the organiza-
tional consciousness, and create a dynamic environment for change?
—Dr. A. B. Fred Bok
Bok: In one way it’s simple, really. The key to success is clarity.
A CEO needs to pass along a clear vision of what he wants his
management team to do, then hold them accountable for it and
incentivize them on it. Because in Philips Business Electronics
we structure our business units as entrepreneurial companies,
there is transparency about how each unit performs. However,
one big challenge that can arise from value-oriented strategies is
business unit leadership. If a company is value-growth oriented,
it may follow value opportunities to new business designs that
challenge its management team’s perceptions of their businesses.
How do you convince them to follow aggressively? Another
challenge is how a company organizes itself for new business
designs. In technology industries, it is difficult to create an orga-
nizational bridge from the way technologies are nurtured to the
way strong customer relationships are built. Managing both cul-
tures—technology-centric for product performance and cus-
tomer-centric for relevance in the marketplace—is a key success
factor.
by Eric Almquist
and Gordon Wyner
Exhibit 1 Creating the Because brands have a significant influence over buying deci-
virtual future ”broadband”
sions, we also asked the consumers to choose among six
marketplace
providers whose names were familiar to them, ranging from
their local telephone companies to national cable providers.
They were asked to make their decisions based on price, per-
formance options, and various product bundles—as well as
brand.
-600 Industry
Growth
-800 Price
Decline Gained
Share
Lost Price
-1000 Share Decline
Cost
Savings
-1200 Lost
Gained Share
Share
-1400
The challenge for Eurostar—the company that they would deliver the hoped-for
that operates the high-speed trains between increase in ridership and margins.
London, Paris, and Brussels—was to capture
high-margin customers and maintain their Eurostar chose to use a sophisticated model-
loyalty in an increasingly competitive environ- ing technique, Strategic Choice Analysis®, to
ment. Just 18 months after the inauguration test service enhancements in a realistic com-
of service through the Channel Tunnel, petitive context. With Strategic Choice
Eurostar had achieved 60 percent market Analysis, a proprietary tool of Mercer
share—higher than air transport—on the Management Consulting, customers are pre-
Paris-London route. Now, it wanted to secure sented with realistic choices and then state
that customer base, increase penetration in their preferences among a number of fully
attractive market segments, and penetrate packaged service offers. The model not only
new high-margin segments. measures the number of travelers who are
attracted by the enhancement, it also quanti-
To do this, the company could no longer fies how much they are willing to pay for it.
count on its original service mix. It had to The end result is a “decision support system”
identify new ways to appeal to high-value that allows marketing managers to test the
customers by identifying and meeting their impact of an array of price and product
priorities. This required changes in one of the changes, as well as to simulate the impact of
five dimensions of the company’s Business competitor reaction.
Design—customer selection and value propo-
sition. Based on its use of Strategic Choice Analysis,
Eurostar decided to change from two to four
The company began by identifying the priori- classes of service, each with a distinctive
ties of new and existing customers and positioning aimed at a specific customer seg-
determining what amenities would satisfy ment. In the first full year since the changes
those priorities. A frequent traveler program? were instituted, Eurostar has registered a
Taxi service on arrival? “Fast-track” check-in? 20 percent increase in ridership and, more
On-board entertainment? And once the importantly, a 40 percent increase in revenue,
desired amenities were identified, how dramatically enhancing margins.
should they be bundled? Before rolling out
costly changes on a large scale, Eurostar Olivier Fainsilber is a principal of Mercer
wanted to quantify their impact and verify Management Consulting based in Paris.
hunches—to help them In this environment, the organizations that can best anticipate
the needs of their most valuable customers are at a distinct com-
envision the future. petitive advantage. Those that can develop scenarios that envi-
sion the future with enhanced certainty will gain not only the
Advanced marketing information and confidence needed to make informed business
decisions but also a strong advantage over the competition.
science techniques,
Well-known examples include Charles Schwab & Co., which
designed to reveal recognized in the 1980s that investors had become more knowl-
edgeable about their investment options than before and that
customers’ needs and pref- many, who were not really utilizing their brokers as information
resources anyway, would prefer discount brokerage services to
erences in a futuristic paying for a middleman. In the future, this ability to discern—
and design businesses around—evolving customer needs will be
business environment, an even more critical skill.
provide forecasts that can Charles Schwab, however, relied on intuition and personal
experience in developing his innovative Business Design.
help executives identify Increasingly, our clients are demanding solid analysis—not anec-
dotal evidence or hunches—to help them envision the future.
how value in their business That’s why marketing science is so important. The payoff can be
the difference between moving into a “profit zone” or taking aim
sectors will migrate— at the wrong target while others with greater capacity for
Strategic Anticipation seize the best opportunities.
and where they should
The work that Mercer did in anticipating broadband informa-
invest to capitalize on tion and entertainment market applications overturned conven-
tional wisdom with intelligent analysis. Such analysis is possible
those shifts. in many other markets as well. Advanced marketing science
techniques, designed to reveal customers’ needs and preferences
in a futuristic business environment, provide forecasts that can
help executives identify how value in their business sectors will
migrate—and where they should invest to capitalize on those
shifts.
By Rick Wise
By contrast, the discipline 1. an explicit and relentless focus on shareholder value growth
as the objective of corporate strategy;
of Business Design
2. a decision-making framework that extends beyond the tradi-
addresses several factors tional product-centric view of business; and
Organizational Systems
What organizational capabilities are critical
to my translating the other dimensions
into marketplace success?
One of the big challenges facing a company In 1996, both companies recognized the
today is the growing need to redesign its rules of the smart card game were about to
business every five to seven years in order to change. The rest of the world was waking
achieve sustainable profit and shareholder up to the benefits of the cards, and the
value growth. The fast-growing market for market was poised to shift from a French
“smart cards”—plastic cards that store payphone-dominated business to a global
extensive information on an embedded one where banking relationships would be
microprocessor—provides a striking illustra- paramount. Banking customers were look-
tion of how two companies, Philips ing for a “transition partner,” a supplier
Electronics, based in the Netherlands, and that could continue to supply them with
De La Rue, based in the U.K., did just that. magnetic stripe cards—which weren’t going
By exploiting value-chain “fusion” in their to disappear overnight—while layering on
market and successfully broadening the smart cards.
scope of their activities—one of the five
dimensions of Business Design—they were Both Philips, with its high-end chip, and De
able to participate in a new wave of value La Rue, with its banking customer relation-
growth. ships and magnetic stripe cards, had the
chance to play the next game. But they real-
Neither Philips nor De La Rue had been big ized their existing Business Designs were not
winners in the first wave of value creation in broad enough to fully exploit the new
smart cards. The market had been limited opportunity. Recognizing their complemen-
primarily to the French telephone and bank- tary positions, the two companies started
ing industries, and the first rule of the game talks that culminated in May 1997 in the
had been to build scale with high-volume creation of what has become one of the
telephone cards. Philips, with only a high- world’s leading integrated smart card manu-
end chips targeted at the banking, mobile facturers, De La Rue Card Systems.
phone, and pay TV segments, had missed
out on much of the early market. And De La Ted Moser is a vice president of Mercer
Rue, whose core business was in currency Management Consulting based in Paris.
printing and magnetic stripe card produc-
tion for banks, lacked in-house chip
technology.
How, then, does one select a Business Design from the clutter of
choices? By focusing on the overall objective: shareholder value.
One of the most powerful attributes of Business Design is the
way in which these five dimensions are linked to the three pri-
mary drivers of shareholder value. Customer selection and value
capture—which define the size of the market to be served and
the underlying business economics—affect a company’s ability to
achieve operating profit momentum. A company’s chosen scope of
activities affects its asset efficiency. Strategic control and
organizational systems affect its ability to perform consistently
and predictably.
Inside-out
Outside-in
The events of April 1998 pro- belief that consolidation is the at the expense of traditional
vide perhaps the most com- best response to a financial ones. For example, MBNA, a
pelling demonstration of the services environment being rad- leading credit card company,
velocity with which Value ically redefined by the changing has a market value of more
Migration® is sweeping through economics of customers and than 81/2 times its book value,
the financial services landscape. the growing number of choices while an index of the top
The mergers and acquisitions they enjoy. But the mergers, 20 retail banks has a market-
wave that has joined several of seemingly similar in nature, in value-to-book-value ratio of
the largest U.S. banks and fact conceal a variety of differ- 31/2. (It is worth noting that
other financial services ent perspectives on where the several of these category killers,
providers—CitiCorp and future “profit zones” of the such as First USA and The
Travelers, Nationsbank and financial services industry lie Money Store, have been
Bank of America, BancOne and and which of numerous com- acquired by more traditional
First Chicago, among others— peting Business Designs will be players at substantial
reflects managers’ desire to find able to identify and occupy premiums.)
sustainable sources of value cre- those zones.
ation. The comments of Messrs. These new designs are marked
Weill and Aldinger are two per- The recent consolidation repre- by several common characteris-
spectives on how to tap those sents the second phase of a tics: focused attention on how
sources. change that began in the customer priorities are shifting,
1980s, when the changing eco- a profit model that targets
At the heart of these consolida- nomics of information and reg- high-value customers, and an
tions, however, lies a troubling ulatory trends combined to “information-based business
question: Do the mega-institu- “de-integrate” the unified, ver- system” that enables a compa-
tions represent the emergence tically integrated Business ny to go to market in a much
of one or more new Business Design of commercial banking. more dynamic and adaptive
Designs that capitalize on the The rise of “category killers” manner.
opportunities inherent in offering specialized financial
enlarged scale and scope—or services products presaged the The most impressive value cre-
will some, if not all, of these emergence of the multiple ators emerging are those that
institutions turn out to be little Business Designs that can now have followed what we charac-
more than warehouses of out- be observed in embryonic form. terize as the “recombinant”
dated Business Designs? approach—that is, taking some
The equity markets have grant- of the capabilities developed
In general, the flurry of big ed substantial value to the new and exploited more narrowly by
transactions is fueled by the category-killer Business Designs the category killers and
regrouping them in new ways tion that can be used to tai- — Scale Manufacturers will be
to meet broad customer needs. lor financial solutions to indi- the low-cost providers of
Schwab is a powerful example: vidual customers, and dis- products in traditional and
Its intense focus on how its cus- tributing a variety of non-traditional categories—
tomers’ needs are evolving has “best-in-class” third-party some grown from today’s
enabled it to move with them, products that meet their category killers, some
providing a relationship-based high-end customers’ evolving emerging from new tech-
approach that features an needs. nologies, and some trans-
information-enriched set of formed from the operations
offerings delivered through an — Mass Customizers will focus of today’s vertically integrat-
integrated, multi-channel net- on the aggregator role, act- ed institutions.
work of phones, the Web, and ing as intelligent agents to
retail offices. seek out a mix of third-party — McBanks will provide stan-
products that meet the dardized, low-cost access to
Ultimately, Schwab will be just needs of their customers. financial services to fill the
one example of a new set of More reactive to customer market “white space” that
Business Designs that will com- requests and less interactive will grow as large institutions
pete for dominance in financial in helping those customers focus their capital and
services, each one representing identify their needs than Re- capacity on the highest-value
new combinations of ways to intermediators, Mass 10 to 15 percent of U.S.
meet evolving customer priori- Customizers will appeal to a households.
ties and capture emerging prof- broader audience.
it zones. A simplified frame- Each of these models is defined
work for thinking about the — Anywhere/Anyhow/Any by the five dimensions of
new financial services landscape Brand firms will be multi- Business Design. Take, for
includes five Business Designs product, multi-brand distrib- example, the Scale
(see Exhibit 1): utors of third-party products, Manufacturer Business Design.
operating integrated multi- Its customer selection and value
— Re-intermediators will, in channel networks that pro- proposition will focus on the
many ways, return to a clas- vide a broad array of pack- price-conscious customer who
sic banking role: gathering— aged solutions. seeks basic financial products
or “aggregating”—informa- and services. Its means of value
10
Innovators Reinventors
9
MBNA
8 Schwab
Capital One
6
State Street
Market Value
5
Book Value
Progressive
4 First Data
Top 20 Bank Composite Morgan Bank One/First Chicago1 1 Travelers/Citicorp
1
Stanley/Dean UBS/Swiss Bank
3 Witter
Top 20 Brokerage Composite NationsBank/BoA1
capture will involve transaction It appears clear that the seem- all” model to vibrant new
fees and product margins. It ingly revolutionary mergers of Business Designs, ones that
will gain strategic control April 1998 are only the begin- enable them to better serve the
through scale, pricing based on ning of widespread consolida- customer and migrate into the
the credit risk of individual cus- tion in the financial services radically different profit zones
tomers, and superb customer industry. The necessary compo- that will define the future of
information. Its scope of activi- nents for new value-creating financial services. To date, very
ties will be limited to a menu of Business Designs—customers, few financial institutions have
standardized products and serv- channels, products, brands, demonstrated innovation on a
ices delivered through multiple information-based capabilities— large scale—that is, transforma-
channels. Its organizational sys- are being assembled under tion of the traditional value
tems will emphasize low-cost increasingly larger roofs. But chain (see Exhibit 2). It is this
operations across the value whether the players are build- potential that should galvanize
chain, information-based capa- ing something new, or simply senior management to drive the
bilities to manage individual something big, remains to creation of the next wave of
customer value, and highly be seen. Business Design.
focused channel, product, and
customer management. Other Management teams need to Corey Yulinsky is a vice president
Business Designs will exhibit transform these mega-institu- of Mercer Management
very different qualities in these tions from the traditional verti- Consulting based in New York.
five areas. cally integrated “one-size-fits
1996
Grocery
Fountain
Vending
Coke’s participation/control The
Profit Zone
$100
ola
-C
ca
$80
Co
$60
1997
$40
o
Pepsic
$20
1980
$0
$0 $5 $10 $15 $20 $25 $30 $35
Revenue ($BB)
At the end of the 1980s, forward-looking the scope of the company’s activities, one of
electric utilities in Western Europe could see the five dimensions of Business Design.
that shareholder value was about to migrate
from their mature Business Design to more The company first invested in a few small
vibrant ones. While the anticipated deregu- telecommunications businesses, such as
lation of electricity industries across the con- paging, to understand how transferable its
tinent would provide some new opportuni- Business Design would be to other endeav-
ties for creating value, it would also put ors. When it met with success, it continued
pressure on prices in a sector where con- to venture into new areas of the telecom-
sumption was growing at only about 3 to munications industry. Today, the onetime
4 percent. electric utility’s telecommunications portfolio
includes major stakes in wireless, long dis-
In this environment, a large Spanish utility tance, and cable television businesses.
began looking for ways to capture increased
profit and shareholder value. Knowing that The company has been rewarded for broad-
consumers value credibility and financial sta- ening the scope of its activities. Its market
bility in providers of utilities and other cru- value today is 3.5 times what it was three
cial services, the company bet that its well- years ago, the increase far outstripping its
known name would enhance the reputation investments in telecommunications. The
of a business that it backed. The company company’s market-value-to-revenue ratio,
also realized that its Business Design, which which was just 0.5 three years ago, is 1.7
had proven successful in the electricity busi- today—a reflection, at least in part, of the
ness, could be leveraged to adjacent mar- company’s successful transfer of its Business
kets that had greater growth potential. The Design to an adjacent, high-growth busi-
current design was optimized to serve mil- ness.
lions of clients in a network-based industry
in which there were just a handful of com- Ambrosio Arizu is a vice president and
petitors. This focus seemed to be well suited Javier Gómez de Olea is a principal of Mercer
to the soon-to-be deregulated Spanish Management Consulting; both are based in
telecommunications market. Taking advan- Madrid.
tage of that opportunity required changing
by Diane MacDiarmid,
Hanna Moukanas,
and Rainer Nehls
created a Business Design But enterprises that successfully carry out these, and just these,
undertakings have only begun to tackle the real work. Unless a
perfectly suited to company can quickly catalyze changes in its organization that
correspond to the changes in its Business Design, it will miss
capturing future value- what these days is often little more than a fleeting opportunity.
A beautiful blueprint, whether it be for a home or a business,
creation opportunities. isn’t worth much until it is transformed into something tangible.
The sooner a Business Design is realized, the sooner it will be
But unless the company able to capture the value created by changing conditions. The
longer the Business Design sits on the shelf, the more likely it
can get its organization will be made obsolete.
to rapidly move from its Indeed, a key challenge for managers in today’s environment is
getting their organizations to begin to change in support of a
current Business Design new Business Design even as that design is being conceived. Given
the shortening cycles of value creation, change must be anticipa-
to the new one, it will miss tory and continuous: As a company’s latest organizational system
is being implemented, the next version—one that will support
what these days is often tomorrow’s Business Design—must be under development.
little more than a fleeting The ability to achieve this rapid and continuous change repre-
sents an enormous competitive advantage. The failure to develop
opportunity. this capability means ceding millions of dollars of shareholder
value to competitors.
Processes
Infrastructure
The way work is organized
The “connectors” across to create value
people, processes, and
structure • Work flows
• Communications • Inputs/outputs/key decisions
• Information systems • Economics
• Production and logistics
networks
Structure
The way positions are organized to
ensure clarity and drive collaboration
• Roles and responsibilities
• Job design
• Reporting relationships
tions are most critical to the new design—that is, which organi-
zational system levers to pull first and hardest.
anything else.” For its Business Design to succeed, Schwab knew that it would
have to flawlessly execute millions of transactions daily; because
the company was handling customers’ investments, lapses in
quality or timely processing would be fatal to its customer rela-
tionships. To meet this critical strategic requirement of its
Business Design, Schwab emphasized nearly error-proof
processes, a superb information system infrastructure, and well-
trained people to deal with customers.
for organizational change Nucor set out to be a low-cost producer of a relatively narrow
range of steel products. Its Business Design called for using low-
exists in companies that, cost “mini-mill” technology and relying heavily on scrap steel for
its raw material. Today, its market capitalization is more than
by most appearances, are $4 billion, significantly higher than larger, traditional competi-
tors such as U.S. Steel and Bethlehem Steel.
doing well: In such a
To support its Business Design, Nucor created an organizational
setting, it can be difficult system that included a flexible and low-cost work force, stream-
lined manufacturing processes, a low-cost infrastructure, a lead-
to create the sense ership team that continually articulates strategy and goals, and a
bare-bones organizational structure. Fewer than 30 people at
of urgency necessary corporate headquarters run a business with revenue of more than
$3 billion.
to overcome inertia.
Confronting the barriers to organizational change
Satisfaction with the status The success stories of Charles Schwab, British Airways, and
Nucor make realigning an organization in support of a new
quo, however, will soon Business Design seem, if not easy, at least logical and straight-
forward. Anyone who has tried to do it knows otherwise. After
become such a company’s all, organizations are run and staffed by human beings, whose
response to change is often more emotional than rational. The
greatest enemy. arguments against change—or at least for postponing it—are
universal: “Our customers are satisfied.” “We need to get every-
one on board first.” “We don’t have the information technology
and data we need.” “We have to reorganize our structure before
we do anything else.”
But it is not only the organization itself that makes change diffi-
cult; it is also the nature of the change usually required to align
an organization with a new Business Design. Just as the new
Time
them to move to a new During the third stage, Change Execution, changes in the organi-
zational system will be executed at an accelerated pace. “Rapid
place—but are unable prototyping”—a method in which small teams test and fine-tune
changes to the organizational system while delivering
to tell them, in the begin- momentum-building quick wins—will be carried out (see
Exhibit 4). As benefits are realized, they will be communicated
ning at least, precisely throughout and outside the organization. Employees will be
trained for new jobs and regular performance measurements will
where that is and what will be implemented, in order to hold people accountable for the
required changes as well as for operating results. Pilot programs
be required of them. will test new products, services, or programs in the field. Finally,
the new organizational system will be formally rolled out across
the entire enterprise.
“real time”
an
g
in
rn
a
Le
e
at
r
le
ce
Ac
to
g
in
yp
ot
ot
Pr
d
pi
Ra
Capability Development
“Build the Machine”
The globalization of the auto manufacturing change and make the business more
industry has led to brutal competition within responsive to customers.
the auto components business. Strong and
customer-focused suppliers have entered the To bring its organization into alignment with
traditional home markets of competitors, its new Business Design, the company dis-
and numerous firms have fallen prey to mantled traditional functional “silos” and its
takeovers. A multibillion-dollar European command-and-control decision-making sys-
components business, eager to seize the tem. It replaced them with cross-functional
opportunities inherent in this new environ- and mostly self-governing business units
ment, set out to change its Business Design organized around particular market seg-
to anticipate and respond to the priorities of ments. Each of the newly established units
its customers, the automakers. The compa- now has complete responsibility for cus-
ny focused on its organizational system, one tomer acquisition, product R & D, techno-
of the five dimensions of Business Design. logical planning, and manufacturing. The
sales teams have been restaffed with engi-
The European company realized that the neers who can help design solutions that
change in its Business Design required meet a particular automaker’s needs. Some
changing its entire relationship with its cus- of these engineers are located permanently
tomers. Instead of acting as a simple pro- at client sites.
ducer of finished parts, it would need to
become a partner with the automakers, sell- As a result of this overhaul of the company’s
ing them solutions rather than merely hard- organizational structure, the company has
ware. This would require assuming far- enjoyed a clear decrease in lead time, fewer
reaching responsibility for much of the value problems in the start-up of new product
chain, from design of the component part lines, and reduction of fixed costs.
to its manufacture and delivery to final
assembly of the automobile itself. The com- Wolfgang Weidner is a vice president of
pany focused on processes (the way work is Mercer Management Consulting based in
organized) and structure (the way job posi- Munich.
tions are organized) as the organizational
elements that would most effectively drive
Challenge
and sustainable shareholder value
• Finding time/resources to focus
growth
on “next wave” growth issues
Focus of Change Effort
• New innovative Business Design
moves Change for Survival
• Creation/regeneration of Objective
entrepreneurial drive • Undertake radical performance
Challenge improvement and total strategic
reorientation
• Instilling change dynamic,
overcoming complacency Focus of Change Effort
• Stabilization and solvency
• Growth-oriented Business Design
Challenge
• Instilling sense of urgency
• Resuscitating without crippling
the organization
High
Value Inflow Stability Value Outflow
Exhibit 5 The type of cash flow for investment in the new Business Design. In a posi-
change program deployed
depends on the context
tion of value stability, the program will require less acute meas-
ures. These might include the creation of a new corporate vision,
one that will provide a platform for profitable growth and
renewal. In a value inflow position, the actions will be longer-
term and more broadly based. One might be the continued nur-
turing of an entrepreneurial culture designed to keep the compa-
ny ahead of the curve and to help it renew itself through the
next successful Business Design.
ENGLISH
Achieving sustained shareholder value corporate priority, the panelists agree. It’s getting
growth: Strategy in the age of Value harder to achieve. European companies in general
Migration® have been slow to adopt the concept. Products are
by Adrian J. Slywotzky, David J. Morrison, and no longer the key to achieving value growth;
James A. Quella customers are. But it’s not enough just to know your
Market share is dead. Once, business leaders who customers and their needs: You need to be able to
increased revenue, decreased cost, fielded technically predict what they will want five years from now. To
superior products, and expanded their market share do this, you can’t just continue to do what you do
could expect to reap enviable increases in shareholder now, only better. You have to reinvent yourself—to
value. These rules no longer hold true. Our research “change the hand,” as one panelist says, “as opposed
into leading value creators suggests a new paradigm to changing the glove.”
for value growth. Under the new rules, three
capabilities are essential to long-term success: Identifying the opportunities of the future:
1) Strategic AnticipationSM, identifying future value Strategic AnticipationSM through marketing
creation opportunities, 2) Business Design, designing science
the enterprise so that it is able to seize those by Eric Almquist and Gordon Wyner
opportunities, 3) value growth realization, moving Executives need solid analysis—not anecdotal
rapidly and successfully from the old Business evidence or “hunches”—to help them envision future
Design to the new one. But the process—one of customer needs and priorities. Fortunately, advanced
continuous reinvention in response to changing marketing science tools can create robust, fact-based
market conditions—doesn’t end there. By the time pictures of the future and help executives identify
the new Business Design is in place, planning for the where they should invest in a rapidly changing
next one must be under way. business environment. In 1995, technology pundits
had built up a body of predictions concerning
“Changing the hand instead of the glove”: “broadband networks” and the multimedia services
An executive roundtable on shareholder they would offer consumer households. A study
value growth conducted by Mercer Management Consulting
A panel discussion with five top executives from a based on two rigorous marketing science tools
variety of industries highlights some of the issues concluded that much of the conventional wisdom
facing managers as they strive to achieve sustained was wrong. The intervening three years have
shareholder value growth. This should be a top confirmed the study’s findings.
FRANÇAIS
70 Executive Summaries
adopter ce concept. Le secret de la création de valeur mouvants malgré un environnement économique
ne réside plus dans les produits, mais dans les clients. instable. Ce type d’approche stratégique diffère des
Toutefois, il ne suffit pas de connaître sa clientèle et autres approches en plusieurs points. D’abord, il se
ses attentes pour réussir, il faut être capable aussi de concentre exclusivement sur la valeur créée pour
prévoir ce que les clients voudront dans 5 ans. Pour y l’actionnaire via l’augmentation du bénéfice
parvenir, les dirigeants ne peuvent plus se contenter d’exploitation, la diminution des actifs et la capacité
de faire ce qu’ils font mais doivent le faire mieux. Ils à prévoir les performances. Ensuite, au lieu de
doivent se réinventer ou, ainsi que l’a dit l’un d’entre centrer l’activité sur le produit, il privilégie les cinq
eux : « changer la main, pas seulement le gant » ! dimensions clés de la création de valeur : la sélection
des clients en fonction de leur potentiel, la capture
Anticiper les opportunités de demain: de valeur, le contrôle stratégique, le champ d’activité,
l’anticipation stratégique grâce à un et les systèmes d’organisation. Enfin, cette approche
marketing “scientifique” se place du point de vue du client et du marché
par Eric Almquist et Gordon Wyner plutôt que de celui de l’entreprise, de sa structure ou
Les dirigeants ont besoin d’analyses solides, pas de ses compétences.
seulement d’évidences ou d’intuitions, pour anticiper
les besoins ou les priorités futures du client. Fort Récolter les fruits du Business Design:
heureusement, dans un environnement en rapide accroître la valeur en changeant son
changement, des outils de marketing sophistiqués organisation rapidement
s’appuyant sur des faits peuvent maintenant leur par Diane MacDiarmid, Hanna Moukanas et
permettre de visualiser concrètement le futur et Rainer Nehls
d’identifier les créneaux où ils doivent investir. En Une entreprise peut avoir identifié une zone de profit
1995, des gourous des nouvelles technologies avaient et créé un design bien adapté pour profiter de la
émis nombre de prédictions concernant les réseaux à valeur à réaliser dans cet espace. Mais, à moins que
large bande et le potentiel de services qu’ils allaient son organisation ne soit capable de passer
offrir aux consommateurs. Une étude de Mercer rapidement et avec succès d’une activité à une autre,
Management Consulting fondée sur deux outils de elle risque de rater ce qui n’est plus aujourd’hui
marketing scientifique rigoureux arriva à la qu’une opportunité éphémère de création de valeur.
conclusion que beaucoup d’entre elles étaient Cela signifie que les entreprises doivent commencer
erronées. Les trois dernières années ont confirmé les à adapter leurs structures pour supporter leurs
résultats de cette étude. nouvelles activités avant même que ces activités ne
soient opérationnelles. Elles ont besoin de savoir
Un modèle pour accroître la valeur pour immédiatement lequel des éléments de leur
l’actionnaire: gagner grâce à son organisation—les hommes, les structures, les process,
Business Design les infrastructures, la direction—sera moteur du
par Rick Wise changement pour un “Business Design” donné. Et
La discipline du Business Design consiste à capturer surtout elles ont besoin d’évaluer très honnêtement
de la valeur dans des zones de profit aux contours l’appétit de changement de l’entreprise.
Value Growth langfristig sichern: Strategie dieses Konzept nur zögerlich zu eigen machen.
im Zeitalter von Value Migration® Produkte sind nicht mehr länger der Schlüssel zu
von Adrian J. Slywotzky, David J. Morrison und Value Growth; es sind die Kunden. Es genügt jedoch
James A. Quella nicht, die Kunden und ihre Bedürfnisse zu kennen,
Der Marktanteil ist tot. Früher konnten entscheidend ist die Vorwegnahme zukünftiger
Unternehmer durch Ertragssteigerung, Bedürfnisse. Infolgedessen kann die Lösung nicht
Kostensenkung, die Entwicklung technisch heißen: weitermachen wie bisher, nur besser. „Sie
überlegener Produkte und den Ausbau der müssen Ihr Unternehmen völlig umgestalten“, so ein
Marktanteile eine überdurchschnittliche Steigerung Teilnehmer der Runde, „und den Inhalt, nicht die
des Unternehmenswertes erwarten. Diese Regel gilt Verpackung ändern.“
jedoch nicht mehr. Untersuchungen, bei denen
Mercer Management Consulting führende Zukünftige Marktchancen entdecken:
Wertgenerierer unter die Lupe genommen hat, Strategic AnticipationSM durch
weisen auf ein neues Paradigma für Value Growth. wissenschaftliches Marketing
Unter den neuen Bedingungen sind drei Fähigkeiten von Eric Almquist und Gordon Wyner
entscheidend für langfristigen Erfolg: (1) Strategic Nur verläßliche Analysen und nicht isolierte
AnticipationSM—die Vorwegnahme zukünftiger Einzelinformationen oder undifferenzierte
Möglichkeiten zur Wertgenerierung, (2) Business Einschätzungen versetzen Manager in die Lage,
Design—Unternehmenskonzept, das ein zukünftige Kundenbedürfnisse und-prioritäten
Unternehmen befähigt, diese Möglichkeiten durch vorherbestimmen zu können. Mit ausgefeilten
entsprechende Strategien auszuschöpfen, (3) Value wissenschaftlichen Marketinginstrumenten können
Growth Realization—schneller, erfolgreicher verläßliche Zukunftsbilder gezeichnet werden, die
Übergang vom alten zum neuen Business Design. dem Top-Management wertvolle Hinweise liefern,
Jedoch hört der Prozeß, der von stetigem Redesign in welchen Bereichen der hochdynamischen
als Antwort auf veränderte Marktbedingungen Geschäftswelt sich Investitionen lohnen. Ein
gekennzeichnet ist, an dieser Stelle nicht auf: Wenn Beispiel: 1995 haben Experten eine Reihe von
das neue Business Design umgesetzt ist, muß die Vorhersagen über „Broadband Networks” und deren
Planung des nächsten Designs bereits anlaufen. zukünftige Multimedia-Dienste für Privathaushalte
getroffen. Eine Studie der Mercer Management
Den Inhalt und nicht die Verpackung ändern: Consulting, die auf zwei äußerst zuverlässigen
Manager-Runde über Shareholder Value Marketinginstrumenten basiert, kam zu der
Growth Feststellung, daß viele dieser Vorhersagen falsch
Ein Gremium aus fünf Top-Managern waren. Die Entwicklung in den darauffolgenden drei
unterschiedlicher Industriezweige hat sich intensiv Jahren hat die Ergebnisse dieser Studie bestätigt.
mit einigen der Themen beschäftigt, mit denen sich
Führungskräfte in ihrem Streben nach langfristigem Ein Modell für Wertzuwachs: Mit
Wertzuwachs auseinandersetzen müssen. Die Strategischem Business Design gewinnen
Teilnehmer der Gesprächsrunde sind von Rick Wise
übereinstimmend der Auffassung, daß Value Growth Das Business Design ist ein Weg, um im heutigen
als übergeordnetem Unternehmensziel höchste dynamischen Marktumfeld Wert aus sich stets
Prioriät eingeräumt werden muß. Der Weg dorthin verändernden Gewinnzonen zu erzielen. Es
ist allerdings zunehmend steinig. Für europäische unterscheidet sich von anderen strategischen
Unternehmen gilt im allgemeinen, daß sie sich Konzepten durch 1) seinen uneingeschränkten Fokus
72 Executive Summaries
auf Wertsteigerung durch langfristige operative Erfolgreiche Umsetzung des Business
Ertragskraft, reduzierte Kapitalbindung und Designs: Value Growth realisieren durch eine
vorhersagbare Leistung; 2) die Substitution einer schnelle Anpassung der gesamten
produktfokussierten Sichtweise durch einen Ansatz, Organisaion
der sich auf fünf breitangelegte Dimensionen von Diane MacDiarmid, Hanna Moukanas und
gründet. Diese wiederum sind entscheidend für die Rainer Nehls
Generierung von Unternehmenswert: Ein Unternehmen, das eine Gewinnzone
Kundenselektion und Wertvorteil für Kunden, identifiziert und ein maßgeschneidertes Business
Werterzielung, Strategische Absicherung, Design entworfen hat, um in dieser Zone Gewinne
Aktionsfeld und Organisatorische Systeme; und 3) erzielen zu können, wird trotzdem nicht in der Lage
eine „outside-in“-Perspektive, die Kunden und sein, die Gewinnchancen zu realisieren, wenn es
Märkte in den Mittelpunkt stellt, anstelle der nicht schnell und erfolgreich den Übergang vom
Strukturen, Aktivitäten und Kernkompetenzen des alten zum neuen Business Design vollzieht. Das
Unternehmens. bedeutet, daß Unternehmen bereits in der
Entwicklungsphase des neuen Business Designs zu
dessen Unterstützung mit der Anpassung der
gesamten Organisation beginnen müssen. Wichtig
ist die rasche Erkenntnis, welche Elemente—
Mitarbeiter, Strukturen, Prozesse, Infrastruktur oder
Führung—die ausschlaggebenden Change-Motoren
für das neue Business Design sind sowie eine
nüchterne und ehrliche Einschätzung der eigenen
Veränderungsbereitschaft.
E S PA Ñ O L
Obtener crecimiento sostenido del valor: oportunidades, 3) Realización del Crecimiento del
Estrategia en la era de “Value Migration®” Valor, el cambiar rápidamente y con éxito del
por Adrian J. Slywotzky, David J. Morrison y antiguo diseño del negocio al nuevo. Pero el proceso,
James A. Quella de continua reinvención en respuesta a las
La cuota de mercado está muerta. Antes, los líderes condiciones del mercado siempre en cambio, no
en el negocio que incrementaban los beneficios, termina aquí: En el momento en que el nuevo diseño
reducían costos, ofrecían productos técnicamente ya se haya implantado, debe comenzarse a planificar
superiores y aumentaban sus cuotas de mercado el próximo.
podían esperar aumentos envidiables en el valor para
el accionista. Pero estas reglas ya no son válidas. “Reinventarse”, esa es la clave: Mesa
Nuestra investigación sobre los creadores de valor redonda sobre el crecimiento del valor para
nos sugiere un nuevo paradigma para el crecimiento el accionista
de este valor. En este escenario en el que rigen Un panel de cinco altos ejecutivos de diversas
nuevas reglas, hay tres capacidades esenciales para el industrias discutieron sobre algunos de los temas a
éxito a largo plazo: 1) Anticipación estratégica, la los que los directivos se enfrentan en su camino para
identificación de futuras oportunidades de creación alcanzar un crecimiento sostenido del valor. Todos
de valor, 2) Diseño del negocio, el diseñar la empresa estuvieron de acuerdo en que esta perspectiva debería
de tal modo que pueda aprovechar estas ocupar un lugar prioritario para la Alta Dirección.
74 Executive Summaries
PORTUGUÊS
Alcançar Crescimento Sustentado de Valor: prever o que eles vão querer daqui a cinco anos. E
Estratégia na Era de “Value Migration®” para tal, não é possível continuar a fazer o mesmo
por Adrian J. Slywotzky, David J. Morrison e que se faz hoje com apenas algumas melhorias, as
James A. Quella empresas têm que se reinventar—“é necessário”,
A quota de mercado é um conceito ultrapassado. Em afirma um dos presentes, “mudar a mão e não
tempos, os gestores que conseguiram aumentar a luva”.
receitas, diminuir custos, proteger produtos
tecnologicamente superiores, e aumentar quota de Identificando as Oportunidades para o
mercado, podiam esperar a geração de significativas Futuro: “Strategic AnticipationSM“ recorrendo
mais valias para os seus accionistas. Hoje, estas regras às Ciências de Marketing
de jogo já não são aplicáveis. Os nossos estudos por Eric Almquist e Gordon Wyner
sobre as entidades líderes na criação de valor Os gestores necessitam de análises sólidas — e não
sugerem o aparecimento de um novo paradigma de de “palpites” ou elementos não justificados—que os
crescimento de valor. No novo contexto, há três ajudem a prever futuras necessidades e prioridades
requisitos essenciais para alcançar uma posição de dos clientes. Afortunadamente, existem hoje
sucesso sustentável no longo prazo: (1) “Strategic sofisticados instrumentos de marketing que
AnticipationSM”—identificar futuras oportunidades permitem gerar cenários sólidos e fundamentados
de criação de valor, (2) “Business Design”— que ajudam os gestores a identificar oportunidades
estruturar o negócio por forma a dotá-lo da de investimento numa envolvente económica em
capacidade de captar novas oportunidades, rápida e constante mudança. Em 1995, os
(3) Realização de Crescimento de Valor—transição especialistas tecnológicos tinham gerado um
rápida e eficaz de um Business Design para outro. conjunto de previsões sobre ‘redes de comunicação
Contudo, este processo—de reinvenção contínua em de banda larga’ e serviços multimédia por elas a
resposta à mudança das condições de mercado—não oferecer. Um estudo dirigido pela Mercer
termina aqui: quando, finalmente, o novo Business Management Consulting, com base em dois
Design está posto em marcha, já o planeamento do poderosos instrumentos de marketing, concluiu que
próximo deve estar iniciado. grande parte dos conhecimentos convencionais
estavam errados. Os três anos decorridos desde essa
“Mudar a mão e não a luva:” Uma mesa data vieram confirmar os resultados desse estudo.
redonda sobre crescimento de valor
accionista Um Plano para o Crescimento do Valor
Um painel de executivos de topo, provenientes de Accionista: Vencer através do Desenho
diferentes sectores, discute alguns dos principais Estratégico de Negócio
desafios enfrentados hoje pelos gestores na sua luta por Rick Wise
por alcançar um aumento de valor sustentado. “Business Design” é um modo de captação de valor
Concordam que este objectivo deveria ser uma em “profit zones” em rápida e constante mudança,
prioridade em todas as empresas. É, no entanto, cada num contexto de negócio actualmente descontínuo.
vez mais difícil prossegui-lo. E, em geral, as O mesmo difere de outros modelos estratégicos: 1)
empresas europeias têm levado algum tempo a por via de uma inexorável focalização em alcançar
adoptar este conceito. Os produtos deixaram de ser o crescimento de valor accionista através do
veículo para um crescimento sustentado. Hoje, são- incremento sustentado dos resultados operacionais,
no os clientes. Contudo, não é suficiente apenas da racionalização de activos, e de performance
conhecer os clientes e as suas necessidades, é preciso previsível; 2) pela substituição de uma visão de
76 Executive Summaries
Mercer Management Consulting, Inc.
Boston Munich
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