The Essentials of Key Value Drivers

Posted on: March 13th, 2017 by bobmorris

In Beyond Performance Management, Jeremy Hope and Steve Player recommend key practices to achieve superior performance.

For example, how to use key value drivers as the processes and practices by which to have the greatest impact on shareholder value. “Valuation theory tells us that the market value of a a given firm is the sum total of of the present value of its future free cash flows. But what drives these cash flows?”

Benjamin Graham has much of value to say about all this in his classic work, The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition).

Actions to Take

o Teach managers the importance of free cash flow.
o Make strategic decisions that maximize expected value, even at the expense of lowering near-term earnings.
o Educate managers in value driven analysis.
o Identify and eliminate key drivers that destroy value.

Hope and Player explain all this in Chapter 12.

* * *

The late Jeremy Hope was a much-loved and highly-admired thought leader. To learn more about him and his work, please click here.

Steve Player founded The Player Group to help clients improve cost and productivity management. Additionally, The Player Group manages leading edge best practices research in to advanced ABM implementations and beyond budgeting applications. Steve is based in Dallas. To learn more about him and his work, please click here.

Beyond Performance Management was published by Harvard Business Review Press.

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