Further to Analysts Getting it Wrong, a set of McKQ articles explain that just meeting investor expectations does nothing to the share price or, therefore, to total shareholder returns. Executives get on a relentless treadmill with every surprise performance requiring still another to boost TSR. It is troubling, then to see one quoted company Strategic Plan start with ‘Our aim is constantly to exceed shareholder expectations‘, which of course is impossible.
Continue Reading → ShareClimate change and strategy
Posted by: Kim Warren
Whether a skeptic or not, any CEO should check their strategy is OK if global warming does turn out to be real. Who, doing business in Pakistan, assessed the business risk from once-a-century flooding? ? Who, serving the Russian agriculture sector, checked the consequences from unprecedented temperatures and wild-fires? Who, planning utilities’ strategies in Europe, was ready for recent wild swings in temperature and rainfall? Unfortunately, the response of many businesses to endless ill-informed cost-pressure has left them more ...
Continue Reading → ShareWhere’s the Board?
Posted by: Kim Warren
We’ve seen a few gung-ho CEOs mess up, especially but not exclusively in banking, but ‘Boards of Prevention‘ in strategy+business asks what the heck the supervisory Board is doing to let such nonsense happen. If they are not warning about risk, they are just overhead. Though the article largely focuses on risk in banking, some simple principles seem more generally useful [let's call them 'threats' to generalise beyond banking]:
- Give the Board an explicit threat manifesto – how to assess and respond to threats to the business ...
Evidence-based decision-making
Posted by: Kim Warren
We all know this ideal is far from reality, but in Is Decision-Based Evidence Making Necessarily Bad?, Sloan Mgmt Review offers 3 levels to define the role of evidence:
- to make a decision – when data really does lead to a decision
- to inform a decision – when other factors such as judgment and bargaining play a role too
- to support a decision – when data is looked for that confirms the decision, and crucially, when disconfirming evidence is avoided or rejected.
They ...
Continue Reading → ShareIntelligent Enterprise, not amateurism
Posted by: Kim Warren
I’ve noted before the dangers of amateur, gut-feel strategy, so a new MIT Sloan Mgmt Review newsletter on the ‘Intelligent Enterprise‘ aims to explain analytical ways to exploit the ‘data deluge’, rather than get drowned in it. I’ll sign up and alert you to any especially helpful item.
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