There are new types of value companies can create in the digital era. In a recent study, we conducted interviews with executives and identified three types of value for companies from digital business—value from operations, value from customers, and value from ecosystems. All three types impact company performance: using data from a global MIT CISR survey of executives, we conducted an exploratory statistical analysis and found that the three types of value collectively explained 39 percent of companies’ revenue growth and 24 percent of their net profit margins.[foot]In 2020, MIT CISR conducted interviews with 23 executives who are responsible for strategic digital initiatives in their companies; from these we identified three types of value from digital initiatives for the company. To get an early sense of their importance for the company, we conducted linear regressions using data from the global MIT CISR 2019 TMT and Transformation Survey (N=1,311). The three types of value collectively explained 39 percent of the variance in revenue growth, relative to industry, and 24 percent of the variance in companies’ net profit margins, relative to industry, based on the Adjusted R Squared of the model. We identified statistically significant unique and common value drivers using linear regressions. [/foot] All three types of value were significant predictors of company performance, although their relative impacts varied.
In this briefing, we describe in detail the three types of value and how that value is captured in the financial performance of the company. And we illustrate how two companies, Kaiser Permanente and Maersk, designed digital initiatives specifically to create value from ecosystems—a new value for many large, traditional companies.