Use EVA and the EVA Margin and EVA Momentum ratio statistics to assess profitability, profitable growth and wealth-creation. Pay managers bonuses at all levels for increasing EVA and give them the tools and training to do so.
Avoid overpaying for acquisitions or buying back stock at its peaks. Manage your portfolio of businesses from a wealth-creation perspective. This includes sensing opportunity—entering lucrative or fastgrowing businesses as well as divesting businesses making sub-par contributions or shuttering them.
Ensure that the company’s capital structure is right. Equity is more expensive than debt, increasing the cost of capital, but too much debt can kill a company.
Find the best ways to boost operating results. Those might include compelling value propositions (e.g., Amazon’s product reviews, broad selection, customer experience, pricing and Prime membership); powerful marketing message (e.g., Memorial Sloan Kettering Cancer Center’s slogan, “The best cancer care, anywhere”); and strengthening the emotional connection with
customers (e.g., Apple, American Girl).
Finally, don’t take risks that could seriously wound your company’s value (e.g., cheating at Volkswagen and Wells Fargo; slipshod quality at Johnson & Johnson). In other words, are you managing your company’s risk, or managing to risk your company?
On this week’s Corporate Competitor Podcast, David Yaeger shows leaders how to turn comparison into…
CEO Cabe shares how the company well-known for tires is putting more than a century…
On the surface, everything looks and feels aligned. Underneath, dissent goes unspoken, accountability erodes and…
Time management asks a tactical question: How do I fit everything in? Time ownership asks…
Rituals surface founding values in visible and repeatable ways, transforming abstract principles into lived experiences,…
CEO Jeff Mason explains how proprietary commerce data, disciplined measurement and a culture built for…