Boston Consulting Group says companies building for their futures are rapidly pulling away from those that are foundering. “Powerful macroeconomic forces, technological disruption and shifting market dynamics” are creating the widening gap in performance among firms, the venerable consulting firm says.
Is your company in the future-built category of firms—purpose led, attracting and retaining digital talent and operating with agility and resilience? Or, dare I say, are you stagnating? BCG has identified what enables companies to outperform their competitors, withstand market shocks and exploit technology. Let’s see it.
Rapid Growth
Growth accounts for 60% to 70% of shareholder returns in the medium term, BCG says. That growth has plateaued in traditional markets, but not in “tech-powered markets” growing rapidly. BCG research shows tech-powered firms can chart courses that catapult their performances beyond their peers in each of eight metrics:
- 4.5 x total shareholder return (over five years)
- 3.3x growth in earnings before interest and taxes (in one year)
- 4.2x revenue growth (over three years)
- 4.4x TSR recovery rate (following the pandemic)
- 4.6x improvement in Environmental, Social and Governance score
- 3.0x gain in strong Glassdoor (recruiting) recommendations
- 2.1x the rise in customer loyalty
- 8.0x increase in AI-related patents (granted or pending)
Future-built companies have created $9.3 trillion in shareholder value in the past five years, BCG says, and they’re just getting started. Can AWCI member contractors replicate their results?
6 Key Attributes
I entered data in the BCG site (bcg.com/featured-insights/build-for-the-future) pretending to be a contractor. I selected the “Engineering & Construction” sector and gave my “firm” the following scores:
- 7 out of 10 for being purpose-led
- 6 for attracting and retaining world-class digital talent
- 7 for having an operating model that enables agility and resilience
- 7 for promoting an innovation-driven culture and a fail-fast-learn mindset
- 6 for deploying a modernized tech and data platform
- 4 for realizing value from AI
That gave me a score of 6.24, a classification as “emerging” and a 7% lead over my peers (who average 5.83 in the “Engineering & Construction” sector).
“Your company … has started to realize value from a digital transformation,” the BCG web scorecard said. “However, it is likely that it is struggling to scale digital solutions effectively, which may diminish its competitive advantage in the medium to long term.”
My next steps, BCG says, involve building out my firm’s digital transformation in a systematic and holistic way. My firm needs to “focus on strategy, people and technological initiatives” organization-wide to avoid “becoming stuck with pockets of digital capabilities” that fail to deliver.
A deeper dive shows my firm needs to “deploy a clear strategy for using AI to create value.” We need “the right people, tools and technology to scale AI across the organization.” We also need to adopt “a responsible AI approach to designing, developing and deploying AI systems.”
In addition, my “emerging” firm needs to “tap multiple recruitment and training channels” and acquire a more “robust talent pipeline.” We’ll need to focus on “competitive compensation and flexible work models to attract and retain talent.” We’ll also need to build “effective upskilling and talent management programs” to keep developing our team.
Weak in Tech and Talent?
But what if my scores are inflated? What if my digital talent (No. 2 on the list), tech and data platforms (No. 5) and AI (No. 6) each scored 4, and not the 6, 6 and 4 I had scored above? In other words, what if my firm is weak in talent and tech? In that case, my score becomes 5.5, and my company gets classified as “stagnating.”
To be future-built, I’ll need to tap more recruitment channels and make acquisitions to gain talent. On the tech side, I’ll need to invest in modern enterprise architecture and cloud-based solutions so my firm can respond more rapidly with solutions for the market, the BCG web scorer said.
But wait. I’m just a drywall contractor. Do I really need advanced tech and talent?
To eke out a living — No. To be future-ready — Uh, Yeah!
