But new findings show that trust and sustainability are becoming critical to the success of a business strategy, as digital has made it so that businesses are measured by more than just their numbers.
According to a recent Accenture report, companies that want to remain competitive in the future will need to focus simultaneously on three competitiveness metrics: trust and sustainability, profit and growth. Companies will be hard pressed to remain competitive if they emphasize only one or two of these metrics.
“It struck us that trust has become an incredibly important asset when it comes to competitive agility,” says Bill Theofilou, senior managing director with Accenture Strategy.
“trust has become an incredibly important asset when it comes to competitive agility.”
The report rolls out a new tool called the Competitive Agility Index, which Accenture created to measure corporate competitiveness. The index identifies the corporate leaders of the future, including more than 350 companies across nine industries: automotive and industrial, consumer goods and services, retail, life sciences, communications, electronics and high-tech, energy, insurance and utilities.
“This has the potential to dramatically inform the choices and decisions that executives make on how to invest money, and what they build in capabilities,” Theofilou says.
Companies in the automotive and industrial sectors stand to gain the highest revenue growth— in the range of $1 billion per company—if their business strategy incorporates all three competitiveness dimensions.
One example of a company that has adopted this three-tiered strategy is BMW, which ranked highest in the index with a score of 63.8. By comparison, the median score in the automotive and industrial sector was 35.1. The company has adopted this three-tiered strategy, with equal emphasis on sustainability and trust—something some automotive companies have neglected.
“Consideration of the environment along the entire value chain, and a clear commitment to the preservation of resources are values embedded in the company’s approach,” the report states.
Following BMW in the rankings are industrial companies Schneider Electric (50.8), Honeywell (43.3) and Daikin (41.4).
Other high performers include Colgate Palmolive Co. in the consumer goods and services sector, retailer Inditex, which owns Zara stores, and tech giant Apple.
The report notes that some of the leading companies in the index do not fare as well by traditional measurements, including market cap and total shareholder return. For example, Colgate ranks No. 1 for consumer goods, but scores 13th place for total shareholder return and fourth for market cap.
“We’re not dismissing market cap or total shareholder return by any means,” Theofilou says. “But these are backwards looking measures of business performance from a shareholder perspective.”
Theofilou believes the importance of trust and sustainability will continue to evolve over the next five to 10 years, and that this metric will likely become equal in importance to profits and growth.
“I think you’ll see those three balance, and it will likely need to come out of the other two, because there’s no way to avoid the growth of sustainability and trust,” he says.