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The CEO, Strategy, and Shareholder Value

The CEO, Strategy, and Shareholder Value Making the Choices That Maximize Company Performance

Author: Peter Kontes
Publisher: John Wiley & Sons
ISBN: 9780470596302
Published In: September 2010
Format: Hardback , 254 pages
Jurisdiction: International ? Disclaimer:
Countri(es) stated herein are used as reference only

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Praise for The CEO, strategy, and Shareholder Value

"Peter Kontes presents a clear-eyed framework for making the top management decisions that have a large and lasting impact on company performance. If your schedule only allows you time to read a few books a year, this should be one of them."—James E. (Jes) Staley, CEO, JP Morgan Investment Bank

"This is a first-class book that can make a difference in achieving results."—Jim Kilts, former chairman and CEO, The Gillette Company

"Peter Kontes has written a masterful and eminently readable book that makes clear the real work of the CEO. He debunks much of the voodoo that surrounds trendy management and performance concepts. It's a must-read for all who are charged with leadership in these turbulent times."—Arthur Martinez, former chairman and CEO, Sears, Roebuck and Company

"The marriage of theories on leadership, strategy, and finance is long overdue. In this book, Kontes brings these themes together around the principle that growing economic profit over time is, or should be, the common overriding objective of all three. He cogently argues and amply illustrates the pitfalls of conventional business practices across many areas, including target setting, competitive positioning, and capital management. Executives who take the time to read this book will come away with a wealth of ideas for changing these practices and significantly improving the performance of their companies."—Stan Garstka, Deputy Dean and Professor in the Practice of Management, Yale School of Management

Preface.

Acknowledgments.

Introduction.

Chapter 1 Foundations.

The Purpose of Strategy.

The Role of the CEO.

The Five Choices That Shape Strategy.

A Strategic Management Framework.

Chapter 2 The Economics of Strategic Management.

Economic Profit.

Economic Profit and Strategy Valuation.

The Financial Drivers of Economic Profit and Equity Value.

The Strategic Drivers of Economic Profit and Equity Value.

Dealing with Mythology.

Chapter Summary.

Chapter 3 Choosing the Right Performance Objectives.

Aspirations.

Business Unit Objectives.

Company Objectives.

The Tyranny of Top-Down Targets.

Chapter Summary.

Chapter 4 Making the Right Participation Choices.

General Considerations.

Assessing Participation Opportunities.

Offering Choices.

Geographic Market Choices.

Customer Segment Choices.

Corporate Center Participation Choices.

Chapter Summary.

Chapter 5 Making the Right Positioning Choices.

Positioning Choices and Competitive Advantage.

Business Models.

Execution Capabilities.

Corporate Positioning Choices.

Chapter Summary.

Chapter 6 Making the Right Organizational Choices.

The Institutional Imperative.

Governance Practices.

Executive Processes.

Executive Capabilities.

Chapter Summary.

Chapter 7 Making the Right Risk Management Choices.

Clarifying “Risk”.

Setting Risk Thresholds.

Portfolio Choices.

Balance Sheet Choices.

Ethical Choices.

Chapter Summary.

Chapter 8 Making It Work.

Conditions Conducive to Success.

Priorities for Change.

The Prize.

Chapter Summary.

Appendix I: Economic Profit Growth, Earnings Growth, and Total Shareholder Returns.

The Data.

The Analysis.

Discussion of the Results.

Appendix II: Economic Profit and Equity Value.

Valuation Models.

Maximizing Economic Profit Growth versus Maximizing Equity Value.

Valuation Issues.

Appendix III: Economic Profit and Equity Value: Illustration.

Appendix IV: Reorganizing the Corporate Center.

The Need for Change.

Creating a New Model of the Center.

Conclusion.

Appendix V: CEO Pay Practices: An Alternative.

Typical Package.

An Alternative Approach.

Illustrative Compensation Plan.

Alerting The Board Early and Often.

Notes.

Index.

PETER KONTES has a long and distinguished career advising chief executives on all aspects of strategic management. Peter was the cofounder and former chief executive of Marakon Associates, a firm cited by Fortunemagazine as "among the half dozen firms that form the elite of strategy consulting." He co-authored a previous book,The Value Imperative. He has been a guest speaker at conferences sponsored by the Economist, Fortune, the London School of Economics, and the World Economic Forum, and has had articles appear in a number of publications including the Financial Times and Directors & Boards. He is currently an Executive-in-Residence at the Yale University Graduate School of Management and continues consulting independently.