I have just been reading the latest BCG report published last month on the value creation of companies and industries over the year: www.bcg.com/documents/file31738.pdf
A must read for everyone in positions of responsibilty in business
The report is of real interest as it not only looks at performance over the last year and 5 years, but also at 'sustainable' value creation over the last decade. In part this is the reaction against the cries of 'short termism' against what appears to be a US influenced obsession about stock price performance. Of real note is the pervasive presence of businesses from South Korea, Japan, India and Brazil. Of the top 10 global industries over the last 5 years to 2008 these countries account for 6 of the places. And that is sustained even if we strip out the crash that had already destroyed stock values in the last year of the analysis.
US companies dominate the tables of value creators over the decade as a whole, but we have to wonder....
how much this will continue into the medium term. Growth in sales is a key variable in driving growth in value, and this is demonstrated amply in the report. With growth clearly tipping in favour of countries and industries in the East, we are likely to see invest and activity expanding at much faster rate there.
The report also begs the question of how do we in business better incorporate the factors that drive long term prosperity into our planning and decisions making. We need to improve the way in which we articulate the benefits and returns to intangibles such as reputation, trust and engagement rather better than hoping they are sufficiently rewarded by exotic stock options and bonuses.
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