Companies that are built for the future are generating three times the shareholder returns of the S&P 1200 according to a new report
The world is changing fast, with technology offering new opportunities for growth – if businesses are positioned to embrace it.
For investors, the companies that are built for the future offer greater returns already according to a new report from the Boston Consulting Group (BCG).
It found that just 6% of companies are currently ‘future built’ but they are outperforming their peers, generating returns to shareholders almost three times that of the S&P 1200.
A survey of 725 C-suite executives considers capabilities in five areas shown in previous research to be fundamental to success: senior management commitment, strategy and approach, governance, people, and technology.
"A small number of companies have built winning capabilities and broken away from the pack," said Amanda Luther, a managing director and partner at BCG and a coauthor of the article. "They have avoided the trap of overfunded, underdelivered IT projects. Instead, they have made smart investments in people, processes, and culture, underpinned by strategic technology builds that have delivered outsized value."
Set for success
The report reveals six key areas that will enable future-built firms to access high-growth markets that less capable players will not:
- Leadership that is aligned around a corporate purpose that integrates sustainability and social impact goals, building trust and transparency among stakeholders
- A clear people advantage to attract, retain, and develop world-class talent
- An operating model that enables agility and resilience to combat exogenous risks
- An innovation-driven culture
- A data platform and flexible, scalable technology platforms and applications to facilitate data access and support business needs easily and flexibly
- Fully embedded AI that can create value for the organization
Winners and losers
The research puts the companies surveyed into four groups:
- those that are stagnating (30% of sample) and still trying to figure out how to move forward
- those that are emerging (45%) with digital transformation underway but not much beyond the basics
- those that are scaling (19%) with sustainable and embedded digital and AI transformations delivering results
- those that are future-built (6%) and leading their sectors with resilience. They are best-placed to benefit from tech disruption.
The best performers are excelling in technology but also in areas such as sales and marketing and customer experience.
"Companies need to decide on the business outcomes they seek and the specific use cases they need to build," said Romain de Laubier, a managing director and partner at BCG and a coauthor of the article. "They also need to determine the minimum viable foundations of technology and data that will enable them to scale solutions. Advanced companies are doing this and incorporating a continuous improvement agenda with new initiatives that leverage the progress they have already made."
