Translating Strategy into Shareholder Value: A Company-Wide Approach to Value Creation

Translating Strategy into Shareholder Value: A Company-Wide Approach to Value Creation

Translating Strategy into Shareholder Value: A Company-Wide Approach to Value Creation

Translating Strategy into Shareholder Value: A Company-Wide Approach to Value Creation

Synopsis

"Too often there are serious missed signals between a company's stated goals and the methods employed to try to reach them. Translating Strategy into Shareholder Value is a unique look at how the planning process relates to the achievement of shareholder value, and ways to ensure that the two directly complement each other. Using tools and a special case study to analyze past, present, and future performance, the book takes readers through a host of steps, including:

• Comparing existing strategy to the competition and the economy as a whole

• Analyzing productive capabilities and costs

• Bringing nonfinancial metrics to test how future strategy creates value

• Selecting the right analytical tool and looking at strategic solutions

If corporations are to truly maximize their success, managers need to understand how to translate corporate strategy to the bottom line -- and that means seeing the big picture."

Excerpt

STRATEGY deals with creating a sustainable competitive advantage for a business. The focus of business strategy is traditionally long-term in nature and is primarily concerned with the longevity of the business. Finance, on the other hand, is concerned with making management decisions in order to achieve its objective of increasing wealth for its owners. Finance looks at ways to obtain, manage, and utilize funds for wealth maximization. The two disciplines are many times perceived as working against each other. Yet, business leaders know that firms that have a sustainable competitive advantage become more valuable than their competition.

I have focused on the problem of aligning strategy with value creation for many years—as a management consultant serving global clients. The conceptual inspiration for this work can be traced to 1997, when I met Jim Hudick, who was the Global Practice Leader in Finance for the American Management Association (a worldwide management training organization). Jim contributed his thoughts around the conceptual framework and the notion of an eco-

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