The research of potential energy explained different phenomena that deal with “applied” energy and energy transformation. It includes the understanding of potential energy in nature and in artificial adaptive constructions. The equity value of companies is the measure of their potential energy.
The discovery of the existence of potential energy in social environments, made at The Unicist Research Institute, allowed understanding and building social influence. E.g. The cultural archetypes of countries are the core potential energy that influences social behavior.
Its application to businesses, managed as adaptive systems, allows increasing their influence to foster growth and simplifying their processes to reduce costs. The technologies included in the 4th industrial revolution simplified the management of the potential energy of businesses and drove them towards a superior level of adaptiveness, productivity and customer orientation.
The Potential Energy of Businesses
The Potential Energy (PE) of a business is the energy stored by an organization compared with its competitors and with the needs of the customers.
It is defined by the competitive advantage of the different business functions, business objects and roles that define the shareholder value, the customer value, and the stakeholder value.
The potential energy of a business is measured in terms of value generation. Increasing the potential energy requires installing a superior level of functionality in a business. The superiority is measured by comparison with substitutes and succedanea.
The Source of Potential Energy
The potential energy of businesses is based on their capacity to deliver empathic unique and functional responses to the urgent needs of the environment. The technologies of the 4th industrial revolution, the concept of Industry 4.0 and the unicist evolutionary approach significantly increased the capacity of building adaptive systems with potential energy in companies.
The main sources of potential energy in business are:
- The adaptive systems of businesses (business objects) that generate value
- The conceptual technologies that increase the functionality of business processes
- The financial leverage
- The influential power of brands
- The unique functional attributes of products and services
- The use of conceptual segmentation of markets
- The competitive advantages
- The complementation of value propositions
- The functional knowledge management systems of businesses
- The management of risk
- The maximal and minimum strategies that ensure growth and survival
- The binary actions that implement maximal and minimum strategies
The potential energy of a business is the latent energy included in its functions and objects. It is transformed into kinetic energy, to generate results, by the use of unicist strategy and binary actions.
The use of potential energy in business is focused on increasing the value generated by the business functions, making businesses more attractive in their environments, and simplifying their business processes. This allows increasing notoriously the speed of market growth and reducing costs.
The potential energy of businesses is homologous to gravitational, magnetic and chemical potential energies.
Increasing the Potential Energy
The unicist evolutionary approach (UEA) to businesses allows increasing their potential energy by producing more with less. It is a logical approach that makes them reasonable, understandable, and predictable.
The potential energy is stored in the business objects of an organization. It is a conservative force that works as a gravitational force and as a catalyst of the processes of a business. It simplifies these processes by establishing the concepts of their functionality, which accelerates them while increasing their productivity and quality.
From a functional point of view, the potential energy is stored in:
- The knowledge objects, which provide the functional knowledge that includes the know how and know why of processes.
- The systemic objects, that transform the energy in business processes, for example transforming ideas into actions.
- The functional objects, which are the systems that integrate objects and processes.
From an organizational point of view, PE is installed in all type of business objects, marketing objects, catalyzing objects and programming objects to simplify the processes. The potential energy achieves its optimal level when a business works as an adaptive system and has a notorious competitive advantage seen from the three points of views:
- The shareholders’
- The customers’
- The stakeholders’
The Concept of the Potential Energy
The potential energy of a business is defined by its shareholder value, its customer value and its stakeholder value.
- Shareholder value: it is defined by the view of a company seen from the point of view of an investor.
- Customer value: it is defined by the view of a company seen from the point of view of its customers and clients.
- Stakeholder value: it is defined by the view of a company seen as a system from the point of view of its members.
The gravitational force that sustains the potential energy of a business is the information of the opportunities and threats that are forecasted in the future scenario.
The catalysts are defined by the competitive advantages of the company seen from the point of view of the market, the shareholder, and the stakeholder.
Empowering the PE of a company requires beginning by enhancing the competitive advantages that allow assuming a leading position in some segments. The empowerment of the PE needs to be segmented to be feasible.
The Conceptual Structure of the Potential Energy
A business begins to exist by being positioned in a future scenario imagined by its creator and then shared by those who participate in the business as shareholders and/or stakeholders.
For a business to have real potential energy, it is necessary to define a feasible and attractive dividend policy that allows sharing the profits with the investors.
The investor might be the creator her/himself alone. But what needs to be established is that the business is a separate entity that has its own energy and does not depend on the energy of the creator. The roles of the business and the owners need to be separated.
Assuming that there are structural investors, not only speculative investors, it is necessary that the future evolution be sustained by innovations that allow building the competitive advantage and also the reputation that sustains the business.
Maximal Strategy: Building Customer Value
When the basics for a shareholder value are given, it is necessary to begin by building the customer value, which implies defining the market and ensuring its growth by developing the necessary marketing actions to foster the speed of such growth.
Building customer value requires a focus on the products that have a competitive advantage in the target segments and ensuring that such products are also needed in the potential market that has been forecasted.
The customer value is established as a PE when there is a functional leadership in some segments that establishes a competitive handicap compared with other competitors. The potential market fully depends on the capacity for developing the products that satisfy the urgent, structural, and latent needs of specific segments.
Product development and the use of marketing models are the functions that need to include objects to establish the framework for building competitive advantage and thus storing potential energy that accelerates market growth.
Minimum Strategy: Building Stakeholder Value
The business model, the industrial system and the brand power are the three functions that define the stakeholder value. The industrial system needs to be adaptive to respond to the needs of the segments.
This became possible in the 4IR since it was notoriously expensive before. This adaptiveness aims at achieving an industrial competitive advantage that includes quality, productivity, and cost leadership.
In this context, it is necessary that this differentiation be included in the brand attributes to work in the market to generate a competitive advantage.
The brand power needs to have both constructive and dissuasive attributes: this means having the necessary constructive attributes to generate a space in the mind of prospective buyers, but also dissuasive attributes that demonstrate the negotiation power of the company.
The brand power is the influential object that sustains the business model. The business model has to respond to the characteristics of the business, of the products and of the markets.
The potential energy of a business is complete when it covers the three aspects that are needed: customers/clients, stakeholders, and shareholders.
If one of these elements does not achieve the necessary threshold, it becomes “nil”, so the company has no potential energy and fully depends on the energy and cost of its work processes.
Segments of Potential Energy Management
We have found four different levels of segments of potential energy management in companies:
- Products Driven
- Reputation Driven
- Business Driven
- Market Driven
These are companies whose power totally relies on the characteristics of their products, which store the PE. It is the natural way of small entrepreneurs.
These are organizations that manage the PE of their products but also include the management of brand attributes that sustain their reputation. It is the case of companies that position as differentiated secondary leaders in their segments.
These are organization that manage the PE based on products and reputation but also include the power of their systemic organization that ensures the functionality of the processes. This is the case of conservative leaders in their segments.
These are organizations that include all the preceding aspects but also include the use of catalyzing objects to influence the market. This is the case of the innovative leaders and innovators, who need the power of catalysts to ensure their expansion.
Social PE can be positive, neutral, or negative
The social potential energy is positive when it provides energy to the environment, neutral when there is no added value and negative when the entities need to appropriate value from the environment.
The perception of social potential energy is exceedingly difficult, because when it is inexistent or negative, the context generates he necessary fallacious myths to avoid noticing this characteristic.
Personal Potential Energy
The positive, negative, or neutral potential energy is perceivable at a personal level because it is noticeable in the actions of an individual and defines her/his image as an influencer or leader.
The PE is defined by the ethical intelligence a person uses in a specific field, which defines her/his true intentions. The ethical intelligence is the deepest intelligence of a person and is part of the ontointelligence that allows adapting to the environment by understanding the nature of things.
This intelligence evolves with the maturity of individuals. This evolution is driven by the social responsibility an individual assumes and the will s/he has to focus on superior goals going beyond her/his comfort zone.
The ethical intelligence defines the level of ethical intelligence that can be influenced. The basic survival ethics has a negative potential energy because the “survivor” feels he has a real need and the right to appropriate value from the environment.
The ethical intelligence of the leader of small unstructured organizations defines the potential energy of the business.
The potential energy of businesses is homologous to gravitational, magnetic, and chemical potential energies.
The potential energy of businesses is based on their capacity to deliver empathic unique and functional responses to the urgent needs of the environment.
The technologies of the 4th industrial revolution, and the concept of Industry 4.0 significantly increased the capacity of building systems with potential energy in companies.