The Shift Index |
Published
This page provides an overview of and links to the Deloitte Center for the Edge Shift Index reports, which measure long-term changes affecting U.S. business in the digital era.
Currently, two Shift Index reports—released in June and November of 2009, respectively—offer established and original analytical approaches to four decades of data, some of it pre-existing and some created for the first time.
The initial Shift Index leverages more than a dozen data sources, four surveys, five proprietary methodologies and 26 metrics to provide a macroeconomic view of deep, long-term disruptions in the business landscape.
The second Shift Index: Industry Metrics and Perspectives, applies 13 of those metrics to nine industry sectors: automotive, consumer products, financial services (banking), health care (health plans and providers), insurance, media, retail, technology and telecommunications.
Paradox
Both Shift Index reports reveal a dramatic increase in performance pressure on American companies. Return on assets (ROA) for U.S. firms has steadily fallen over more than four decades to almost one quarter of where it was in 1965, even as labor productivity has continued to rise. Even the highest performing companies are struggling on average to maintain their ROA levels, while losing their leadership positions at an ever-faster rate. By contrast, the companies in the bottom quartile of ROA performance saw their returns decline by 35-fold over the same period.
This apparent paradox—falling ROA and growing productivity—is explained at least in part by the rising total compensation of knowledge workers and other talented employees, and in the growing power of consumers relative to vendors.
To help managers in this decidedly challenging time, the Shift Index present a framework and logic outlining three waves of transformation, each reflected by separate sub-indices in the Index: foundations, which set the stage for major change; flows, which allow firms to enhance productivity; and impacts, which help gauge progress at an economy-wide level and for specific industries.
The key message is that performance pressures will continue to increase well beyond the current downturn. As a result, leaders must be ruthless about deciding which assets, metrics, operations, and practices have the greatest potential to generate long-term profitable growth and shed those that do not. They must continually return to the most basic question of all: “What business are we really in?”
Shift Index Report Library
The Shift Index: Industry Metrics and Perspectives (November 2009)
This industry-specific version of the Shift Index applies performance-challenge metrics to nine key sectors in the U.S.
The Shift Index: June 2009 Macroeconomic Report
The initial release of the Shift Index quantifies long-term rate change and its impact on U.S. economic performance.
About the Shift Index
Executive Summary
The summary highlights core performance challenges that have been playing out for decades, and provides an overview of deep and overlapping change - a Big Shift - operating beneath the visible surfaces of today’s events.
Methodology
The methodology reviews the team’s rigorous data collection process and illustrates how metrics of different magnitudes, trends and volatility were combined in a meaningful way to create the Shift Index reports.
Structure
The Shift Index offers a framework for understanding three waves of transformation in the competitive landscape: foundations for major change; flows of resources, such as knowledge, that allow firms to enhance productivity; and the impacts of the foundations and flows on companies and the economy.
Implications for Executives
The findings of the Shift Index highlight the stark performance challenges for companies. Unless firms take radical action, the gap between their potential and realized opportunities is likely to grow wider.
Cross-Sector Overview
Among the 25 metrics that make up the Shift Index, authors focused on 13 metrics to analyze trends at the industry sector level, including automotive, consumer products, retail, financial services (banking), insurance, health care (health plans and providers), technology, media and telecommunications.
In the News
The media’s struggle is a boon to consumers
Financial Times (Gapper Blog) | November 10, 2009
John Gapper discusses The Shift Index in his of Financial Times blog.
Why You’d Better Beware of the ‘Big Shift’
BusinessWeek | November 11, 2009
The Shift Index finds that despite major improvement in labor productivity over the past four decades, many U.S. industries have experienced "alarming" declines in return on assets (ROA), a key metric of corporate performance.
Apple's network helps prevent a fall
Financial Times Article | June 24, 2009
The Financial Times uses the Shift Index to illustrate that few companies have adjusted as adeptly as Apple to how technology has altered the terms of competition.
Don't Blame the Recession: Despite Productivity Gains, U.S. Businesses Return-on-Assets have Plummeted 75 percent since 1965
Press Release | June 23, 2009
The macroeonomic Shift Index measures impact of digital infrastructure on economic performance.
The Big Shift
HBR Article | June 19, 2009
Deloitte's Center for the Edge leaders discuss metrics executives can use to gauge the long-term forces shaping the business environment and improve their firms’ overall performance.
The Shift Index
CNBC Video | June 19, 2009
The real problem facing business executives is the use of "old" ideas when it comes to adopting new technology.
Contact Us
To speak with our team, please e-mail us.
For media inquiries, please contact:
Jonathan Gandal
Deloitte LLP
+1 203 708 4115
jgandal@deloitte.com
Connect with the Center
We invite you to sign up to receive publications from the Center for the Edge which are generally available every one to two months. The Center issues working papers, reports and articles on a wide range of topics, from market strategy to cloud computing.
E-mail subscription
As used in this document, ‘Deloitte’ means Deloitte LLP (and its subsidiaries). Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.
Last updated