Data Viewpoint

HFS Data Viewpoint: Are you “fit-for-future?”

April 27, 2021

  • For the past few years, there’s been a hidden factor priced into company performance that has determined whether a company is considered “successful”. That hidden factor is now coming to the surface – is the firm viewed as fit-for-future in the modern digital economy? Along with company valuations, these fit-for-future measures are gaining prominence and will be central to succeeding in the pandemic economy.
  • Revenue and profit have long been considered the ultimate markers of success in conventional accounting, and they’re obviously not going anywhere. But digital+COVID is expected to force markets to take a broader view of what “success” means (and pricing that into valuation). We’ve seen a general market perception shift from focus on shareholder value to stakeholder value, and we are seeing that enterprises are looking at much more than the traditional metrics. This trend has only accelerated with the disruption of the past year.
  • The HOW is starting to matter – how did a company achieve its crazy margins and revenue growth? Did it come at the cost of quality, shirking the needs of its existing customers, or being irresponsible about climate change? 15% of enterprises in our recent study ranked fit-for-future measures as the #1 most important drivers of value to the business over the next 18 months.
  • Our research also finds that the ability to garner customer trust will be the top “fit-for-future” requirement companies are watching closely as an element that shapes their valuation. 45% of enterprises consider it a mission-critical component of calculating company valuation over the next 18 months. Customer trust and experience comes down to the WHY of digital transformation, and is all about building better customer intimacy.

The HFS Bottomline: The concept of profit with a purpose is finding its moment in the sun due to COVID and digital technologies. Firms that are focused on fit-for-future metrics will increasingly be using technology to drive growth, engage customers, and control cost.

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