At a time when companies are poised to seize the growth opportunities of a rebounding economy, many of them, whether they know it or not, face a growth crisis. Even during the boom years of the past decade, only a small fraction of companies enjoyed consistent double-digit revenue growth. And those that did often achieved it through short-term measures--such as mergers and inflated price increases--that don't provide the foundation for growth over the long term. But there is a way out of this predicament. The authors claim that companies can achieve sustained growth by leveraging their "hidden assets," a wide array of underused, intangible capabilities and advantages that most established companies already hold. To date, much of the research on intangible assets has centered on intellectual property and brand recognition. But in this article, the authors uncover a host of other assets that can help spark growth. They identify four major categories of hidden assets: customer relationships, strategic real estate, networks, and information. And they illustrate each with an example of a company that has creatively used its hidden assets to produce new sources of revenue. Executives have spent years learning to create growth using products, facilities, and working capital. But they should really focus on mobilizing their hidden assets to serve their customers' higher order needs--in other words, create offerings that make customers' lives easier, better, or less expensive. Making that shift in mindset isn't easy, admit the authors, but companies that do it may not only create meaningful new value for their customers but also produce double-digit revenue and earnings growth for investors.

Using the Internet to facilitate business-to-business commerce promises many benefits, such as dramatic cost reductions and greater access to buyers and sellers. Yet little is known about how B2B e-commerce will evolve. The authors argue that changes in the financial services industry over the past two decades provide important clues. Exchanges, they say, are not the primary source of value in information-intensive markets; value tends to accumulate among a diverse group of specialists that focus on such tasks as packaging, standard setting, arbitrage, and information management. Because scale and liquidity are vitally important to efficient trading, today's exchanges will consolidate into a relatively small set of mega-exchanges. For many companies, traditional skills in such areas as product development, manufacturing, and marketing may become relatively less important, while the ability to understand and capitalize on market dynamics may become considerably more important.

The 1990s have been a great time to be in business--unless, that is, you happen to be a manufacturer. As business value has flowed steadily downstream, from producing goods to servicing them, most manufacturers have struggled, unable to boost their profits or stock prices. A few manufacturers, though, are thriving. They've gone beyond the factory gates and have begun competing in downstream markets--where the money is. The authors describe four business models for successful downstream moves. The embedded-services model involves using new technologies to build services into products; Honeywell, for instance, offers a product that ties airplane subsystems together through the use of microprocessors. The comprehensive-services model involves providing a set of services that spans the entire product life cycle, as GE is doing for railroads. The integrated-solutions model is a matter of combining products and services into a single offering, as Nokia has done by helping its cellular-carrier customers deploy their networks. The fourth model, distribution control, involves taking control of lucrative distribution activities; Coke's control of 70% of its U.S. bottling and distribution is a prime example. Moving downstream requires manufacturers to shift their strategic focus from achieving operational excellence to gaining customer allegiance. It also calls for new skills and performance measures. But the rewards can be substantial. Downstream markets often generate 10 to 30 times more revenues than the underlying product sales--and they tend to have higher margins and require fewer assets as well.