Page 13 - Intangible value

NEW WAVE COMPANIES BASE THEIR SUCCESS ON CREATING ABUNDANT VALUE
RESEARCH DIRECTOR NUPPU GÄVERT AND STRATEGY DIRECTOR VILLE TIKKA WEVOLVE - A TRANSFORMATION COMPANY
Business is no longer what it used to be. We live in strange times when start-ups – such as the toy company Goldie- Blox, which inspires the next generation of female engi- neers or Warby Parker, which digitalised the glasses busi- ness – can revolutionise whole sectors within a few years. At the same time, the average life expectancy of large old businesses has quickly declined to under 15 years.
The goals of business activity and preconditions for value creation have changed signi cantly. It is obvious that the coming years and decades will be very different compared with the previous decades as extensive and unexpected changes, such as increasing social ine- quality, fast technological leaps, continuous economic challenges and the escalating environmental crisis, will force companies and organisations to re-evaluate the foundations of their existence, their role and operating practices. We are in the middle of a business paradigm change, a leap to a new wave of value creation, which has, in certain places, already revealed itself through new models of thinking and new business models, as well as through success stories in the start-up world.
There are business models based on networking, stra- tegic design expertise, intelligent technologies and in- sightful growth hacking in the background of the success stories of new wave companies. But fundamentally, it is always a question of companies’ advanced skill and their ways to create new value in the world. In the new wave of value creation and business activ- ity, more companies have realised that the creation of mere nancial and functional value is not enough for market success, but the company should also strive to create extensive cultural and social value. For example Patagonia, a swiftly growing Californian company focusing on high-quality outdoor clothing and equipment, has de ned its aim to be nding a solu- tion within its own sector to the environmental crisis. In addition to the traditional emotional and functional
values, it thereby creates signi cant cultural and social value in cooperation with all its stakeholder groups.
Customers are also prepared to pay more for experiences, products and services that create more abundant shared social and cultural value. Emotions, experiences, status, responsibility and togetherness are examples of business output, with the help of which companies can increase the value of their operation and stand out in the market. The new wave of business is hence not only about enjoy- able products, entertaining applications or useful services that attempt to maximise consumer bene t through price, high quality or functionality. Instead, new wave compa- nies aim to optimise their business models, brands and products to solve bigger and bigger problems and to max- imise the common bene t created through this.
That way companies create more and better reasons for their customers, partners, investors and employees to take part in the company’s activities or to buy its servic- es and products. In practice, this helps scale their entire business, build better preconditions for long-term suc- cess and improve the company’s results – which has been well proven by, for example, the exponential growth, growing cultural signi cance, and commercial success of Airbnb, the gurehead of the sharing economy.
In 2014, the strategic research and design agency Wevolve published a report on the new wave of value creation (Arvonluonnin uusi aalto) with Tekes, the Finn- ish Funding Agency for Innovation. The report describes the principles and methods of new wave business activity for building the most valuable companies of this century. It is based on over twenty interviews with front-line experts in Europe and the United States, as well as case studies on companies capable of new wave innovation and value creation, including Warby Parker, Airbnb (the gurehead of sharing economy), Patagonia (the responsible sports- wear and equipment company), Intel and IBM.
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