What is Unrealised Value (UV), and How Can It Guide Strategic Investment Choices?

Unrealised Value (UV) represents the untapped potential in a product or service, indicating the value an organisation could capture by fully meeting the needs of all potential customers or users.

In essence, UV measures the gap between what beneficiaries ideally desire and the satisfaction currently provided by the existing solution.

Think of it as the difference between where your customers are today and the future satisfaction they aspire to achieve.

Why does measuring UV matter so much?

Because it offers crucial insights into your investment strategy, helping you decide where to allocate resources for maximum return.

When a product or service shows low Current Value (CV) but high UV, it's a clear signal that significant market potential is waiting to be tapped.

These are the opportunities worth exploring and investing in—areas ripe for innovation, expansion, or improvement.

Take, for example, an innovative technology solution that's not yet widely adopted.

Its present value might appear modest, but its high UV indicates substantial room to grow and satisfy customer demands.

Recognising and responding to this UV can position an organisation strategically ahead of its competitors.

Conversely, consider a product categorised as a “cash cow”—one demonstrating very high CV but limited UV.

Such products reliably generate revenue due to their established position and high satisfaction among current customers.

Yet, their limited growth potential means they usually don't require significant new investment.

Instead, they provide steady funding for exploring new opportunities elsewhere.

Understanding the balance between CV and UV is thus essential for prioritising investments and maximising organisational growth.

Organisations adept at recognising high-UV opportunities can strategically allocate resources, innovate effectively, and stay competitive.

This dynamic approach to investment aligns closely with the explore-exploit dynamics—exploiting established products (high CV, low UV) while exploring innovations and emerging opportunities (low CV, high UV).

In short, mastering UV measurement enables organisations to identify opportunities accurately, ensuring that resource allocation leads to meaningful value creation.

By continuously gauging and responding to UV, companies sustain relevance, innovate effectively, and stay resilient amidst evolving customer expectations and market dynamics.

Ultimately, understanding and leveraging Unrealised Value becomes a cornerstone of strategic foresight and long-term competitive advantage.