RECENTLY I had the opportunity to listen directly to the key thoughts of a value-creating chief executive officer, one of the clear leaders in the Australian business community and one whose appointment and subsequent
RECENTLY I had the opportunity to listen directly to the key thoughts of a value-creating chief executive officer, one of the clear leaders in the Australian business community and one whose appointment and subsequent strategies have quite rightly led to an immediate up-tick in the firm’s capital market rating.
Reflecting on the presentation, I considered the approach of the business leader, committed in these uncertain times, to delivering growth in share-holder value. And while it was tempting to launch into a 16-part thesis on organisational leadership, I opted instead to briefly mention three key themes.
The first theme is that today’s business leader has developed a very clear strategy and an ability to articulate that strategy, internally and externally, with compelling commercial logic.
It would seem that gone are the days when a leader would deliver an arduous dissertation on where he/she wanted the firm to be. Today the concentration is on how the team is going to get to the destination, and, where possible, results that support the strategy.
There is an old saying in value-based thinking that goes something like: “an ordinary strategy, well executed, will always create more value that a stunning strategy, poorly executed”. There is plenty of evidence to suggest that capital markets fully appreciate this axiom.
The second theme is that today’s business leader is neither afraid to be different, nor afraid of their vision, and will stay with a business model he or she feels is optimal for the organisation. This often results in all manner of capital market intermediaries lining up to criticise performance, on any given single period reporting cycle.
A preparedness to understand key value drivers and stay disciplined with a focus on these drivers can result in the firm becoming quite unfashionable. Saying no to numerous acquisitions, buying back shares, shedding business units with long operating histories and re-engineering the corporate centre can make the organisational environment uncomfortable.
The key of course is to point to the scoreboard – value creation over time. The business leader of today will commit to that peak performance benchmark and stick to his or her strategy.
The unfashionable business of today can be the darling of the markets tomorrow, and the business leader of today will be responsive to, but not at the whim of, market analysts.
The final theme is that today’s business leader can integrate the needs of key stakeholder groups. It is simply not good enough to be committed to shareholder value and to do so at the expense of key stakeholder interests.
Value creation is a financial imperative that permeates the management ethos of leading organisations.
However, corporate citizenship, employee satisfaction, safety and environmental management, and social responsibility are not alternatives to creating value, they are additional corporate imperatives to be managed.
The business leader of today will find a way through this often apparently conflicting set of priorities.
These three themes suggest that today’s value creating business leader must be a committed visionary, a superior strategist, and a multi-talented practitioner. In those organisations fortunate enough to be led by such an individual, it’s exciting to watch them at work.
The writer can be contacted at anthony.wooles@trudo.com.au or through the office at Business News.
Reflecting on the presentation, I considered the approach of the business leader, committed in these uncertain times, to delivering growth in share-holder value. And while it was tempting to launch into a 16-part thesis on organisational leadership, I opted instead to briefly mention three key themes.
The first theme is that today’s business leader has developed a very clear strategy and an ability to articulate that strategy, internally and externally, with compelling commercial logic.
It would seem that gone are the days when a leader would deliver an arduous dissertation on where he/she wanted the firm to be. Today the concentration is on how the team is going to get to the destination, and, where possible, results that support the strategy.
There is an old saying in value-based thinking that goes something like: “an ordinary strategy, well executed, will always create more value that a stunning strategy, poorly executed”. There is plenty of evidence to suggest that capital markets fully appreciate this axiom.
The second theme is that today’s business leader is neither afraid to be different, nor afraid of their vision, and will stay with a business model he or she feels is optimal for the organisation. This often results in all manner of capital market intermediaries lining up to criticise performance, on any given single period reporting cycle.
A preparedness to understand key value drivers and stay disciplined with a focus on these drivers can result in the firm becoming quite unfashionable. Saying no to numerous acquisitions, buying back shares, shedding business units with long operating histories and re-engineering the corporate centre can make the organisational environment uncomfortable.
The key of course is to point to the scoreboard – value creation over time. The business leader of today will commit to that peak performance benchmark and stick to his or her strategy.
The unfashionable business of today can be the darling of the markets tomorrow, and the business leader of today will be responsive to, but not at the whim of, market analysts.
The final theme is that today’s business leader can integrate the needs of key stakeholder groups. It is simply not good enough to be committed to shareholder value and to do so at the expense of key stakeholder interests.
Value creation is a financial imperative that permeates the management ethos of leading organisations.
However, corporate citizenship, employee satisfaction, safety and environmental management, and social responsibility are not alternatives to creating value, they are additional corporate imperatives to be managed.
The business leader of today will find a way through this often apparently conflicting set of priorities.
These three themes suggest that today’s value creating business leader must be a committed visionary, a superior strategist, and a multi-talented practitioner. In those organisations fortunate enough to be led by such an individual, it’s exciting to watch them at work.
The writer can be contacted at anthony.wooles@trudo.com.au or through the office at Business News.
