Cutting Through Complexity Unlocks Value Creation for Companies 

8W8 Global Business Builders developed in collaboration with more than 70 entrepreneurs, founders, executives, board members, investors, and academics the Compound Value Creator Quotient, aka CovQ or put simply: ‘the IQ of a company,’ and is now releasing the CovQ Insights 2021 findings.

CovQ is is the world’s first assessment that enables companies, their founders, executives, board members, and investors to discover a firm’s intelligence and quality with respect to creating value, compounding it, identifying the most necessary issues to be addressed, and opportunities to be developed and focused on. In comparison, more than 50 million people took the Myers Briggs personality test (MBTI Myers Briggs Type Indicator).

Across all participating growth companies encompassing the US, Canada, LATAM, EU, UK, Australia, and Asia the global CovQ score average is:

CovQ  63

The maximum a company can score is 100. Most companies scored between 45 and 75. As stated, the current average of all companies taking the assessment is 63.

As is often the case, when the 80/20 rule is applied, the majority of companies are doing ok, plus/minus, or in other words, are kind of average, however, companies that really want to thrive, outperform the competition, and deliver the full potential of their business should come in at a CovQ score between 80 and 100.

Only 6 % of all companies scored 80 or higher. Only 1 % of all companies scored 90 or higher. We discovered that many companies lack:

– empowered ownership to execute their strategic initiatives

– focus and alignment on what’s most important

– strategy infrastructure which limits delivering full growth potential

The CovQ score is broken down into five segments:

DEEP IMPACT CREATES VALUE BUILDING

The CovQ Insights 2021 results are broken down as follows:

DEEP – expressing qualities around substance, sustainability, long-term, broader steering

IMPACT – expressing qualities around the right set of tactical and operational activities making a positive and strategic impact

CREATES – rallying the required teams, using tools and systems to implement and control strategy execution and reporting

VALUE – communicating and sharing information proactively, constantly, consistently to all relevant stakeholders

BUILDING – leveraging specialists, experts, peers and self-development

The below charts are real-life examples of a heat map of how a company’s current qualities concerning compound value creation can look like:

A Worldclass Tech Company operating well – yet not perfect: CovQ 81

A Mid-Stage Growth Company scoring in line with the average: CovQ 65

An Early-Stage Growth Company in need to step up: CovQ 51

Key take-aways across the entire set of growth companies participating in the CovQ assessment:

• There is only limited awareness of the concept of compounding value by consistent and successful strategy execution
• 94 % of the participating companies came in with a CovQ score lower than 80
• The companies that scored > 80 are also extremely successful
• Companies have a lot of upside identifying and leveraging their blindspots
• Most companies have insufficient strategy tools, ownership and hence discipline and success of execution is hindered
• Integrated social/marketing/sales strategy is found to be challenging
• Innovation processes either do not exist or are difficult to manage and are ultimately not effective
• Scenario planning needs a wake-up call first
• Most companies’ management feel they are solid with information sharing
• Each company is totally unique
• Within a firm various individuals judge qualities differently, sometimes very differently, hence team-based CovQ assessments deliver the most effective outcomes

In any case, there are different ways of looking at the results and each company has to develop its own opinion, takeaways, and impactful action items to be created and managed, but there are some general questions to be asked:

• Should a company double down on its strengths aka very high CovQ scores?
• Should a company fix all weaknesses aka very low CovQ scores?
• Should it be a combination of both?
• Which and how many strategic initiatives are getting a company to the next level?
• How do the board and management set priorities?
• How is following through on strategies ensured?
• How to pull this all together and measure it?
• Can this all be done with the current set up?

All things considered, CovQ Insights 2021 reveals that management, boards, and investors alike have found taking the Compound Value Creator Quotient assessment a valuable and structured experience and use it as a window to identify value creation potentials as well as a framework to structure their strategic initiatives moving forward. Leveraging these essential sets of information allow leadership teams to develop a business further; at the same time increasing focus and reducing risk. In the VUCA times of volatility, uncertainty, complexity, and ambiguity companies need the intelligence and tools to deliver growth, momentum, transformation and outcomes, excite their stakeholders by successfully compounding value and hence making the respective eco-systems a more effective and better place.

Ralf Hirt, Founder & CEO of 8W8 Global Business Builders, was also recently interviewed by Forbes to share his views on scaling and compounding – the most powerful force of the universe.

For more information please visit 8w8.com and 8W8.com/covq.