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Little Find

Vitality : yet another KPI?

In partnership with Fortune magazine, the BCG Henderson Institute created the Fortune Future 50 index to identify companies with vitality — with the long-term growth potential needed in today’s climate. But why is vitality so important?

If a company is vital, it means it can reinvent itself for the future while ensuring strong performance in the present. But value creation depends on (among other thingssustainable prospects for growth  prospects that are shrinking given: (1) the long-term decline in economic growth and (2the increasingly rapid exhaustion of new economic models. Worse still, the value creation metrics that are most commonly used (growth, market share, and profitability) only measure what has already happened  yet past performance is less and less a predictor of future success. So this new index  vitality  focuses on the long termand points to ways that even behemoths can reinvent themselves. The index incorporates factors demonstrated to predict long-run success, organized into five pillars: market potential; strategy; technology and investment; people; and structure. 

 

The companies with the highest index are largely tech firms; 25% are headed by women (compared to 17% for the rest); and aren’t necessarily the firms that post the top performance. However, they have clearly developed a genuine ambidexterity: the ability to manage and reinvent themselves at the same time.  

  

To go further:  Achieving Vitality in Turbulent Times (BCG, October 2019)

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Françoise Tollet
Published by Françoise Tollet
She spent 12 years in industry, working for Bolloré Technologies, among others. She co-founded Business Digest in 1992 and has been running the company since 1998. And she took the Internet plunge in 1996, even before coming on board as part of the BD team.