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 only enduring basis that really counts, owners´ expectations (Ed.: Also Covered in the new leading book on shareholder value, VBM Consulting´s THE VALUE MANDATE: Maximizing Shareholder Value Across the Corporation, by VBM Consulting Partners Peter J. Clark Clark and Stephen Neill, amazon.com and amazon.co.uk).

If WE don´t have a clue what 100% value represents, how in the world could we say we were achieving “maximum”? Exactly—we were just making it up as we go along. And how could you, dear reader, be vacant enough to believe our lies?

You see, our financial PR guys tell us to state “maximizing shareholder value” at least twice in every press statement, and we hope the gullible are awed and the rest can be bullied by hard stares through frameless glasses (Funny, though, when its just words and nothing else, the Street´s and the City´s knowledgeable tend to grade us down a notch each time we say “MSV” and don´t know how to achieve it—oh well).

And here´s the really good part: if we underperform in terms of executing our value plan (or worse, if we don´t have a credible maximum value plan at all) we then just BLAME THE SHAREHOLDERS. I know, I know, its like blaming a mirror for the image that you don´t want to see. But it USED to work, sort of.

Oh, we´ve gone through the faux-value motions and losers. First we shelled out seven figures for a statistical valuation formula that is 90 percent is extracted from the Capital Asset Pricing Model of the 60s, but hey, if Beancounter Valuation Statistics want to re-sell air that everyone else can breathe for free, then more power to them. And then we (once) brought in Darkstare, a junior consultant-staff intensive data-crunch sweat shop that transforms the simplest projects into massive (and largely superfluous) analyses because that maximizes THEIR value, albeit diminishing our own value.

Hey, know what? NOW I think I´m finally understanding what maximizing shareholder value means! It never had anything at all to do with OUR value!

On to expenses. Even though the world is slipping into turgid sideways markets that look like a recession (whether or not they are), we are going to emphasize ‘growth´ at all costs in our non-value plan. I mean literally, at any cost.

You see, it doesn´t matter that there are no enduring profits today or tomorrow in some of the click-n-eyeball pheeenoms—growth strategies permit some of our more influential executives with clout to pad their department staffs even more, based on the curious logic fat upon fat is required to meet support requirement (Ed: Chapter 8 in THE VALUE MANDATE is entitled, suitably, “Unwinding the Crony Bureaucracy”).

Shareholder value? It´s a PR fad only—at least that´s how we treat it. Either that, or a full-employment paralysis-by-analysis joke: study it for two years first before acting, assuming that the company is still around. The so-called ‘value´ staff certainly won´t be.

In its most malignant form, ‘shareholder value´ is contorted by those who should know better into efforts that actually DESTROY value by opening up the corporation´s door to worthless staff-intensive data fishing expeditions.

Why not just get it right the first time? Because today, CEOs like me only last in office for three years or so, sometimes less, and we just don´t want to be bothered. We rely on the PR ferrets to keep the Board from learning that we are actually destroying massive value while saying we are creating it. Some trick, huh? For if the Board learned the truth, we´d be thrown out on our expense accounts in less than two years (oops, that´s already happening). Either that, or acquirers would be drooling over the prospect of picking up the value we´ve missed, (oops, that´s already happening, also).
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