Locating Trapped Value
Geoffrey Moore
Author, speaker, advisor, best known for Crossing the Chasm, Zone to Win and The Infinite Staircase. Board Member of nLight, WorkFusion, and Phaidra. Chairman Emeritus Chasm Group & Chasm Institute.
Where is the Bottleneck in Your Enterprise?
In prior posts, I have argued that ROI from IT investments comes from releasing trapped value. That is, while your current systems enable your current level of performance, they also impose constraints that prevent you from taking it to the next level. Such constraints, I argue, are inevitable. No system can be 100% efficient—there is always trapped value somewhere. The goal of trapped value analysis is to locate and prioritize the current set of bottlenecks and determine whether a next-generation technology might break through them.
With that goal in mind, it is good to start with a map of the terrain. The one below is based on a hierarchy of value creation:
The value your enterprise creates is embedded in your business model—how you engage with the world. This is what people pay you for. That model, in turn, is delivered via your operating model—how you engage with the world on a day-to-day basis. This is your Performance Zone. And that model in turn is enabled by your infrastructure model—how your systems support your day-to-day operations, the work of the Productivity Zone.
The hierarchy is based on how impactful each model is with respect to value creation. In that context, business models are all about doing the right things—that is what releases the most trapped value. Operating models focus on doing things right, and that comes second. Infrastructure models focus on doing things well, and that comes third. In our digitally transformed world, the first tends to be the domain of strategy consultants, the second, software applications, and the third, cyber systems.
With respect to releasing trapped value, the order of convenience is in the opposite direction. That is, the most accessible opportunities will be at the infrastructure layer, since they call for little reengineering outside the IT space. It is a great place to experiment with new technologies like AI, with the understanding that the gains will be in efficiency more than in effectiveness. That said, the trapped value opportunities at the operating model usually provide the best risk-adjusted returns. They can have considerable impact on the current business’s effectiveness without having to work through the change management implicit in business model reengineering. The latter is the change that has the most impact, for sure, but because it does require realigning a slew of relationships both with partners and customers, it can be a real challenge, especially for established enterprises given their legacy commitments. This is why start-ups can outperform incumbents at the outset of any category disruption. That said, catching up to a next-generation disruptive business model once it is getting widespread adoption is the playbook for staying relevant, hence all the emphasis it gets in Zone to Win.
From a practical point of view, then, given limited time and resources, it is usually best to focus trapped value analysis on your operating model first. Where in your current way of doing business do things bog down? What is holding you back from taking things to a whole new level of performance? In this context, you do want to think outside the box, but you don’t want to leave the box completely behind. That is, you are sticking with your current business model—same customers, same value propositions—but you are looking to deliver it in a whole new way. That is what the Uber operating model is doing for personal transportation, and it is what the autonomous vehicle operating model aspires to do next. In both cases, transportation companies are still just giving rides and charging for them, but in each case, in a dramatically transformed way.
What would it take to Uber your business?
That’s what I think. What do you think?
Owner, New Information Paradigms Ltd.
2wGeoffrey Moore Really appreciate the clear actionable framing of "trapped value". How about thinking of trapped value as essentially "waste in the making"? Since value is ultimately defined by the customer, trapped value remains valuable only as long as customer needs stay consistent (and it’s ‘safe’ to treat value as a noun, rather than a verb). Once perceptions shift and the trapped value no longer aligns with what they care about, it effectively turns into waste. I really like the distinction between infrastructure, operating, and business models — it clearly shows where and how waste risks accumulate if we don’t continually work to release trapped value. If customer value were continuously encoded, evaluated, and acted upon, trapped value would have nowhere to hide! Curious how you think about the tipping point: when does ‘trapped value’ shift from a recoverable opportunity to an irreversible liability? PS when we saw you at Lotusphere ’93, we knew you’d be a marketing star 😉
Product Leader | Mobile & IoT | Customer-Centered Innovation
2wBrilliant articulation, Geoffrey. In a market obsessed with capturing new value, too few organizations pause to ask: what latent value are we already sitting on? Locating trapped value—and systematically liberating it—isn't merely an efficiency play; it's a catalyst for genuine innovation. Organizations mastering this approach will outpace competitors not by racing harder, but by racing smarter. I'm curious: How do you envision AI accelerating the identification and release of trapped value across different industries?
Technologist | Advisor | Investor
2wYour models are always highly effective at making the complex simple. The insight on why startups can more easily tackle the high value business model opportunities is spot on.
Reasoning as a Service, AI Researcher & Former PLM Expert | Exploring the Future
2wGeoffrey Moore most of the trapped value comes from poor feedback loops, static data views and lack of reasoning support. If you are curious, maybe look at my newsletter True Intelligence for the scoop.
Strategic Finance Leader | Expert in Financial Turnaround | FP&A | Driving Fiscal Discipline & Shareholder Value in EPC & Manufacturing | Project Finance | Energy & Infrastructure Enthusiast |
2wGeoffrey Moore's insights into trapped value present a compelling framework for optimizing enterprise performance. The hierarchical approach—spanning business models, operating models, and infrastructure—reflects the layered complexity of strategic transformation. While infrastructure enhancements offer immediate efficiency gains, the operating model holds the greatest potential for sustainable impact without the disruptive overhaul of a full business model pivot. This notion echoes historical patterns where incremental innovations have often outweighed radical disruptions in risk-adjusted returns. As AI and automation evolve, enterprises must navigate the balance between efficiency and effectiveness, ensuring that technological advancements serve broader strategic imperatives. The challenge, then, is not just in identifying trapped value but in aligning its release with enduring competitive advantage. Thought-provoking analysis—applicable across industries.