Transforming businesses through the power of people, technology and innovation.
The COVID-19 pandemic has intensified the pace of global change — and the pressure on companies to respond. Businesses are expected to not only keep pace with the evolving external environment but actually change the way they change, from business models to customer interaction and employee engagement.
This pressure is compounded by the shifting demands of stakeholders, who are deprioritizing sustainable, predictable earnings growth to instead look for companies with a demonstrated ability to navigate disruption. In short, the post-pandemic world requires companies to accelerate the pace of organizational change. And, at the same time, investors are increasingly looking for more than market leaders — they’re seeking market makers.
Reframing the future with three new value drivers
The imperative to get to the future and prosper has never been more critical. Yet some companies — market makers — do more than merely prosper, they create exponential value. In our experience, exponential value creators are differentiated by their ability to leverage three critical value drivers: placing humans at the center of their organization, leveraging technology at speed and enabling innovation at scale. Through these, market makers accelerate the value they create in the long term, reframing their future to thrive as they seize opportunities through disruption.
Transform the way you transform
These new drivers of value creation demand a fundamental shift not only in how companies reorient to create value, but in what they value — agility versus predictability; innovation versus strategic planning; operating model versus systems thinking.
It’s a transformation mindset requiring the parallel processing of multiple, interdependent time horizons: now, next and beyond. Companies should break this into a 70:20:10 approach.
- Now (today): 70% of effort and investment
- Build a foundation that can support future growth
- Protect the value of core markets and operations
- Next (12 months out): 20% of effort and investment
- Enable new value propositions
- Take existing capabilities into new markets and optimize performance in existing markets with new technology
- Beyond (the future): 10% of effort and investment
- Explore entirely new businesses
- Reinvent the industry by creating new markets and new capabilities
Taking the first step with future-back innovation
In times of change, including, and perhaps most importantly, in past economic downturns, companies experiencing exponential growth in value took what we call a “future-back” approach. Leaders start this process by asking, “Will my business still be relevant in 2, 5 or 10 years’ time from now? And how can I grow our competitive advantage with bold risk-taking when others are less likely to have the stomach and stamina for it?”
They then, with their purpose as a central guide, explore the future and their vision, working through future-back scenarios that can flex and adapt to ensure they’re following a path to maintain relevance today — and 15 years from now.
Organizations need to get into the habit of embedding adaptability into their approach to business. Future-back thinking gives companies the tools for building the muscle necessary to adapt to whatever the future may hold.
The foundation of future value creation
Transformation Realized is EY’s approach to helping companies enhance their ability to adapt, and creating more agility in their operating model to deliver and sustain engines of long-term value creation.
It helps companies understand and connect with customers through richer experiences. It enables them to leverage and deploy new technology faster. It can inspire and engage employees and can build the next generation of transformation leaders with a clear and powerful purpose, enabled by productive and engaging cultures. It can help companies mitigate constant threats and remain relevant while developing the capacity for continuous business reinvention and innovation.
All of this yields closer alignment with, and belief in, the new value expectations of investors, culminating in a greater ability to deliver on the organization’s potential for value creation.
At EY, we have evolved the services, our organization and our wider ecosystem around the three new drivers of value. This includes our innovation alliances and ecosystems, our EY wavespace™ network, our NextWave industry scenarios and our suite of digital tools, including TechWatch (tech trends and applications), Embryonic (ecosystem scanning and mapping), CogniStreamer (crowdsourcing and innovation management), Storybook (user personas and journey mapping), and VentureBuilder (innovation road mapping).
Above all, we’re delivering Transformation Realized through our culture of co-creation with clients and by bringing the whole of EY to address challenges and opportunities – something that’s demonstrated by every team member and driven by our purpose to transform businesses through the power of people, innovation and technology.
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