In today’s business landscape, organic growth can feel increasingly out of reach. But what if the next horizon of growth was hiding in plain sight, at the edges of your existing business and in the latent assets you already possess?
Enter the concepts of the Adjacent Edge and Orphaned Opportunity.
The Adjacent Edge refers to the market opportunities that sit just outside a company’s core business, enabled by its existing capabilities, customers, and credibility. It’s the force that makes an M&A deal more than the sum of its parts – the source of long-term value that often goes unstated in the deal rationale.
Orphaned Opportunity, on the other hand, describes the revenue streams a company already has the capability to capture, but that lack an internal champion to drive them forward. These are the process innovations, internal tools, and unique assets that could be standalone offerings, if only their potential was recognized.
Recent research underscores just how pervasive these hidden growth drivers are. An analysis of 600 large-cap M&A deals found that 62% of acquirers cite multiple rationales for their deals.(1) The primary stated reason often resonates best with shareholders – but the real long-term value frequently lies in the Adjacent Edge opportunity the deal unlocks.
The problem? Even when an Adjacent Edge is captured through M&A, the second and third-order adjacent opportunities are often left unexplored. And Orphaned Opportunities, by their very nature, remain latent without a deliberate effort to look for them.
The imperative for growth-minded executives is clear: to unlock the growth hiding in plain sight, the pursuit of Adjacent Edges and Orphaned Opportunities must become a systematic, continuous process – not a one-time event or an accidental byproduct.
This means developing the growth-seeking mindset and organizational muscle to scan for adjacent potential as a matter of routine. It means building the capability to recognize and champion Orphaned Opportunities as they emerge.
In a business environment where organic growth is increasingly elusive, the Adjacent Edge and Orphaned Opportunity represent a potent untapped reservoir. They’re not just concepts – they’re calls to action.
The next horizon of growth is hiding in plain sight. It’s time to develop the eyes to see it and the discipline to pursue it. Your Adjacent Edge and Orphaned Opportunity are waiting.
References:
- PwC. (2022). Deals with multiple strategic rationales generate higher returns. PwC. https://www.pwc.com/us/en/services/deals/library/multiple-strategic-rationales.html