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THE HIGH VALUE PRICE OF SHELL-GAME COST CUTS |
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7-2-2005
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As times get tougher and profits more dear, unnecessary staff expenditures stand out like a sore thumb. Growth is slowed and bloated inventories absorb whatever sales are left. Understandably, management´s attention switches to the expense and efficiency (E2) side. Understandable: that´s all that´s left.
Only this time around, only true and enduring cost reforms count. The Street and The... |
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MAX VALUE BY SELLING OUT: TIMING IS KEY |
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8-1-2005
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Selling Out is an stark, unambiguous admission of management value-creation failure, which helps to explain legal extraordinary measures taken by drowning management to at least delay the inevitable.
And yet, sometimes Selling Out is the only available fallback strategy for pedestrian management in over their depth.
But one has to get the timing right-- otherwise even Selling Out can... |
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FORM OVER FUNCTION VALUE DESTRUCTION |
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7-1-2005
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To maximize value on a consistent basis, the division of effort to be split between solid value content (including follow-through) and presentation window-dressing is about the same as the Corporate Key Contributor´s relative impact compared to journeyman lackeys in the company, as revealed in Clark & Neill´s The Value Mandate: about 95 to 5.
Don´t get us wrong. No one is arguing for... |
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PENALTY FOR VALUE UNDERPERFORMANCE |
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2-1-2005
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Vapidprose PR aimed at assuring all that ´management is achieving maximum shareholder value´ evaporates when value-destroying actions point in the exact opposite direction. Dutch carrier VPN possessed no strategy, so as a default, management followed 2000´s oh-so-stylish but disastrous strategy of chasing overly expensive 3G licenses despite no assurance of future profitability. The companies possessing... |
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BEHIND THE MERGER VALUE ERROR |
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2-10-2004
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Fact that more than two-thirds of corporate mergers fail based on the criteria of achieving initial financial returns expectations has been widespread knowledge for at least twelve years. VBM Consulting´s Beyond the Deal (P Clark, Harper Collins, 1991) provided one of the earlier warnings.
And Beyond the Deal warned that mergers between non-related companies face even higher failure prospects.... |
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TAKING VALUE PERSONALLY |
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3-8-2004
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Peattie & Taylor´s Alex© comic was featured in VBM Consulting´s 2001 best-seller, Net Value: Valuing Dot-Com Companies Uncovering the Realities Behind the Hype (Clark & Neill, New York, Amacom).
In Chapter 1, we parodied the quasi-criminal practice of pretending that worthless e-businesses had any worth at all. The strip´s main character, Alex Masterly, instructs his junior lackies to... |
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THE CHIEF EXECUTIVE´S M&A VALUE MINDSET |
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23-6-2004
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When it comes to acquiring other companies, the value-maximizing mindset of the chief executive (and thus, the value-maximizing mindset of the corporation) begins and ends with acceptance of the FACT that the majority of acquisitions destroy value, based on the leading accepted criteria.
Certainly, there are a few bolt-on, closely related deals made during the early stages of the economic... |
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CONTINUOUS CORPORATE VALUE IMPROVEMENT (CVI) |
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15-6-2004
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At best, the optimal value approach is a temporary solution. The best value approach available at that particular moment in pursuit of greatest shareholder value.
Today. Tomorrow. Possibly, for several tomorrows. But almost never beyond an 18-24 month time horizon. The smug corporate bluffer who boasts that he has secured maximum value approach for all time fools no one, except perhaps himself.... |
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THE ETHICS OF MAXIMUM VALUE |
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1-5-2004
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VBM Consulting´s Value and Ethics Series, No. 2
Note: This is the second in VBM Consulting´s series on the interrelationship between business ethics and pursuit of maximum shareholder value. The initial column and article, “Setting the Record Straight” (© VBMCL 2003-4, all rights reserved) first appeared in September 2002 and can be viewed on the VBM Resource Ctr. Article Archives.
The... |
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CEO LETTERS WE´D LOVE TO SEE |
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12-4-2004
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We had a lukewarm quarter but we´re of course going to put the best face on all things, as that´s the macho thing to do.
Those statements about “maximizing shareholder value--” you fell for them, huh?
Hollow words, nothing more. We have never even conducted an RTSR (Relative Total Shareholder Value) which means that we have no idea about what “maximum value” represents at all on the... |
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