Value Imperative: Managing for Superior Shareholder ReturnsMoving beyond the strategies that managers have employed to create shareholder value -- now the standard for business performance -- management experts James McTaggart, Peter Kontes, and Michael Mankins reveal their powerful new framework for the systematic, day-to-day management of shareholder value. The authors attack head-on the fundamental weaknesses in current management practices, namely, the stranglehold that budgeting has over strategic planning and the lack of imagination in management plans that prevents real changes and consequences. They provide a systematic approach to "value based management" that eliminates these weaknesses, offering proven strategies for managing large, complex companies to consistently produce superior results for stockholders. Building on more than 16 years of consulting experience with many of the largest and best-known companies in North America, Europe, and Australia, the authors delineate the fundamental principles of value creation, as well as the primary obstacles. Starting with the principle that "cash flows drive value," McTaggart, Kontes, and Mankins show how to create a single governing objective that will enable managers to make decisions most likely to increase the company's competitive, organizational, and financial strength. Building on the objective of maximizing shareholder value, they outline the value based management framework that directly links a company's strategies and organization to its value in capital markets. Using real-world examples, they describe how to develop business and corporate strategies that substantially improve competitive position and increase market value, often within only two to five years. And as most large companies lack the internal processes necessary to manage for value on a sustained basis, the authors show managers how to build the five key processes that are institutional value drivers: governance, strategic planning, resource allocation, performance management, and top management compensation. Mastering these capabilities is fundamental to the ongoing, consistent creation of shareholder value over time. All companies, the authors argue, inherently possess an enormous potential to create higher value for their shareholders. With hundreds of examples of companies that have successfully employed the beliefs, principles, and practices of value based management, this book shows general managers how to generate superior returns and realize their business's full value potential. |
Contents
The Value Imperative | 1 |
The Governing Objective | 11 |
The Potential for Value Creation | 25 |
Copyright | |
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Common terms and phrases
achieve agement alternatives average bad growth Bancorp Berkshire Hathaway budgeting business unit level capabilities capital markets Chapter chief executive Coca-Cola Company common stock company's compensation competitive advantage competitive position competitors corporate center cost of equity costs and assets create value decisions determine differentiation discounted cash flow earnings economic profit equity capital equity cash flow Equity Invested equity spread estimate evaluate example Exhibit formance governing objective impact implement important improve increase investors long-term management's market economics market share market value maximizing shareholder value measures ment million ness unit nomic operating Operating Cash Flow organizational pany PepsiCo percent portfolio potential premium product offering resource allocation return on equity segments shareholder returns shareholder value strategic characterization strategic position assessment strategic value drivers tegic tion tive top management unit strategies unit's unprofitable valuation value based management value centers value creation warranted equity value warranted value Warren Buffett