What is hidden value?
City Analysts persuasively write about finding hidden value in listed companies based on an out-dated definition: ‘existing, under-valued assets not reflected in company balance sheets nor share prices.’
The Hidden Value Partners’ description of hidden value has a fuller and more comprehensive meaning:
‘unshared thoughts, ideas, insights, and opportunities not yet integrated with
business purposes, goals, competitive advantages, strategies, plans, and results.’
Hidden value is potential value hidden from view, unseen, out of mind, out of sight – it derives from people’s undisclosed or ‘hidden intelligence’ – that capable of being converted to value.
Paradoxically hidden intelligence is also in plain sight, waiting to appear or be asked for, understood and recognised as opportunities for change.
By contrast ‘intrinsic value’ is an inherent, natural part of every business – it exists, it is tangible – the subject of the dated Analysts’ view. It is a matter of fact, already known about, and is only waiting to be seized upon by accident or daily business activities. It is often under-utilised, forgotten about or not thought of as relevant at the time it was considered last.
Hidden value exceeds the intrinsic value for its potential to transform businesses as it is current, fresh, contextually new.
When the hidden value is combined with intrinsic value through our inquiry methodology, robust business transformation strategies and initiatives are possible.