Bain: Unlocking ‘hidden assets’ is key to avoiding business extinction

A 10-year study by Bain & Co. finds that 75% of Fortune 500 companies “face the threat of extinction within a decade” unless they tap their “hidden assets … to redefine themselves.” What sort of hidden assets? Bain’s “Unstoppable Growth Study” study says:

  • hidden customer assets: customer segments and data that can prompt new products and businesses
  • hidden growth platforms: platforms that can be expanded or created for new product lines and business units
  • hidden capabilities: technologies, processes and expertise that can lead to a breakthrough product or service

“These hidden assets were central to 90% of the cases where companies successfully redefined their core businesses and their growth formulas. The assets were not themselves hidden, but their full potential had not been recognized by management,” Bain says.

Typical strategies that usually don’t work:

  • leaping to new hot markets
  • pursuing “big bang” transforming mergers
  • launching broad-based innovation programs

So where does the dreaded threat of “extinction” come from? The following megatrends:

  • Faster movement of information
  • Speed of capital formation
  • Emergence of China and India, and their disruptive impact
  • Reduced capital intensity among the most profitable new industries
  • Increasingly rapid movement of executives among companies
  • The rise and impact of private equity firms
  • Speed of overall technology cycles

Success stories — companies that stepped back from the brink by unlocking their hidden assets — include Apple (think: iPod) and Marvel Entertainment (think: “Spiderman” blockbuster movies). “Companies that seek growth solutions based on hidden assets are four to six times more likely to survive,” the study says.

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About the study:
Tracked the 500 largest U.S. public companies from 1995 through 2004 and assessed their financial performance and rate of change. More extensive 10-year before-and-after profiles were then developed for 50% of the remaining companies that didn’t go bankrupt or get acquired during that period. Also surveyed 240 global executives and developed case studies on 25 successful business redefinitions.

Related:
The book: Unstoppable: Finding Hidden Assets to Renew the Core and Fuel Profitable Growth, by Chris Zook (Harvard Business School Press, 2007).

‘Alpha-earning moms’ and stay-at-home dads may change household purchasing habits

If current demographic shifts continue, within a generation women may be the primary breadwinners in half of America’s households, notes Social Technologies LLC futurist John Cashman. These “alpha-earning moms” — along with the increasing number of stay-at-home dads — are growing market segments that will merit business attention, Cashman says.

  • Household duties will continue to realign. More men will carry primary responsibility for purchasing food, clothing, and other household items.
  • Men will be more involved in childcare and in purchasing products and services for their children.
  • As they explore these new gender roles, men’s preferences will be expressed in the types of products they buy. These could include more gadgetry and high-tech appliances for the home.

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Related: “Stay-at-Home Dads Forge New Identities, Roles,” The Washington Post, 17 June 2007

Blog Watch: Roland Piquepaille’s Technology Trends

One of the many blogs I monitor is Roland Piquepaille’s Technology Trends. Here’s my review:

Mission: “How new technologies are modifying our way of life”

Author: Roland Piquepaille, a computer consultant based in Paris; partner in the Savoir-Faire & Cie network; specializes in high-performance computing and visualization.

Pros: Wide range of raw material (he must read a lot of publications!). Identifies sources. Adds context and related links. Good RSS feed. Provides images/photos.

Cons: None.

Comment: If you’re in a hurry, the first paragraph (which shows up in the RSS feed) tells you mostly what you need to know.

Examples of gems I found there:

RFID tags spy on bartenders: Capton, a provider of liquor-monitoring technology, has developed the Beverage Tracker system (being tested at the Treasure Island hotel-casino in Las Vegas) which uses RFID tags to determine whether bartenders are overpouring or undercharging. It can save $90,000/year for an average bar.

The first world map of happiness: Built at the University of Leicester, the map shows you’ll be happier if you live in Denmark (rated No.1) or Switzerland (No.2) than in Zimbabwe (No.177) or Burundi (No.178).

A robot that paints like Jackson Pollock: Computer scientists at the Washington University in Saint-Louis built a robot that makes drip paintings like Jackson Pollock’s — who was also known as “Jack the Dripper.” The robot, dubbed ‘Action Jackson,’ can finish an ‘artwork’ in just minutes, like Jackson Pollock probably did. But the paintings by this robot can be bought for about $10, far from the whopping $140 million price paid last year for “No.5, 1948.”

Higher gasoline prices may boost online shopping

Higher gasoline prices are causing consumers to change their driving behavior, as well as to cut spending on luxury items and even groceries, according to a survey of 1,000 consumers commissioned by PriceRunner.com. Online retailers may see benefits from higher gas prices as 22% of the respondents indicated that they’re making more online purchases to save on the cost of driving to the store.

Furthermore, 10% said that they’d canceled all or part of their vacation plans as a result of higher gas prices; and 12.8% said they had chosen closer vacation destinations.

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Methodology
Online survey with 1,000 respondents resulting in a +/- 3.1% maximum sampling margin of error at the 95% confidence level. Survey conducted by Amplitude Research, April 2007

Update

Consumers have boosted online spending in part as a way to save on gas, according to a new report released by Decision Direct Research, the marketing research division of Millard Group Inc. The survey of 55,000 consumers showed that 19% of respondents have “significantly” increased their online spending over the past year and another 39% report that their spending has increased “slightly.” When asked why they increased their Internet shopping, “saves gas” posted an increase of 13 points over 2006, while “saves time” increased by six points. — DM News, 13 September 2007

2020 foresight: New jobs

Futurists at Social Technologies LLC see the following new jobs on the horizon for the year 2020:

  • Realizer: Creates real versions of virtual objects for people, from grog tankards to sports cars.
  • E-scrubber: Works to undo or minimize the indiscretions that people accumulate on the Web.
  • Unrealtor: Creates virtual tourism, adventure and retail destinations.
  • Nano-decontaminator: Cleans up nanomaterials now being spread through the environment.
  • Deceptionist: Provides tech-enabled deception services for those wishing to disguise their activities.
  • Genetic dietician: Creates diets tailored to people’s individual genetic makeup.
  • Geoscaper: Makes corporate and private properties look attractive in Google Earth-style aerial views.
  • Unplugger: Counselor (or mental health professional) who helps wean people from excessive technology use.
  • Eye pilot: Operates small, remotely piloted, camera-equipped aerial vehicles over war zones, disasters and other locations of interest on behalf of news services, nongovernmental organizations and private companies.

But a colleague of mine noted that very few people will want to be known as a “deceptionist.” It’s a hard thing to want to put on your IRS tax return or tell your kids.