Details

Preface xi <p>Acknowledgments xv</p> <p>Introduction xvii</p> <p><b>Chapter 1: Foundations 1</b></p> <p>The Purpose of Strategy 2</p> <p>The Role of the CEO 4</p> <p>Five Choices That Shape Strategy 6</p> <p>A Strategic Management Framework 9</p> <p><b>Chapter 2: The Economics of Strategic Management 11</b></p> <p>Economic Profit 11</p> <p>Economic Profit and Strategy Valuation 13</p> <p>The Financial Drivers of Economic Profit and Equity Value 15</p> <p>The Strategic Drivers of Economic Profit and Equity Value 17</p> <p>Dealing with Mythology 23</p> <p>Chapter Summary 29</p> <p><b>Chapter 3: Choosing the Right Performance Objectives 31</b></p> <p>Aspirations 32</p> <p>Business Unit Objectives 34</p> <p>Company Objectives 39</p> <p>The Tyranny of Top-Down Targets 39</p> <p>Chapter Summary 46</p> <p><b>Chapter 4: Making the Right Participation Choices 49</b></p> <p>General Considerations 50</p> <p>Assessing Participation Opportunities 51</p> <p>Offering Choices 63</p> <p>Geographic Market Choices 67</p> <p>Customer Segment Choices 72</p> <p>Corporate Participation Choices 75</p> <p>Chapter Summary 82</p> <p><b>Chapter 5: Making the Right Positioning Choices 85</b></p> <p>Positioning Choices and Competitive Advantage 86</p> <p>Business Models 88</p> <p>Execution Capabilities 107</p> <p>Corporate Positioning Choices 111</p> <p>Chapter Summary 122</p> <p><b>Chapter 6: Making the Right Organizational Choices 125</b></p> <p>The Institutional Imperative 126</p> <p>Governance Practices 128</p> <p>Executive Processes 134</p> <p>Executive Capabilities 151</p> <p>Chapter Summary 155</p> <p><b>Chapter 7: Making the Right Risk Management Choices 157</b></p> <p>Clarifying "Risk" 158</p> <p>Setting Risk Thresholds 160</p> <p>Portfolio Choices 162</p> <p>Balance Sheet Choices 166</p> <p>Ethical Choices 174</p> <p>Chapter Summary 181</p> <p><b>Chapter 8: Making It Work 183</b></p> <p>Conditions Conducive to Success 183</p> <p>Priorities for Change 189</p> <p>The Prize 195</p> <p>Chapter Summary 198</p> <p><b>Appendix I: Economic Profit Growth, Earnings Growth, and Total Shareholder Returns 201</b></p> <p>The Data 201</p> <p>The Analysis 202</p> <p>Discussion of the Results 204</p> <p><b>Appendix II: Economic Profit and Equity Value 207</b></p> <p>Valuation Models 207</p> <p>Maximizing Economic Profit Growth versus Maximizing Equity Value 209</p> <p>Valuation Issues 210</p> <p><b>Appendix III: Economic Profit and Equity Value: Illustration 213</b></p> <p><b>Appendix IV: Reconsidering the Corporate Center 215</b></p> <p>The Need for Change 215</p> <p>Creating a New Model of the Center 217</p> <p>Conclusion 221</p> <p><b>Appendix V: CEO Pay Practices: An Alternative 223</b></p> <p>Typical Package 224</p> <p>An Alternative Approach 224</p> <p>Illustrative Compensation Plan 226</p> <p>Alerting The Board Early and Often 229</p> <p>Notes 231</p> <p>Index 239</p>

<b>PETER KONTES</b> 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 <i>Fortune</i> magazine as "among the half dozen firms that form the elite of strategy consulting." He coauthored a previous book, <i>The Value Imperative</i>. 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 <i>Financial Times</i> and <i>Directors & Boards</i>. He is currently an Executive-in-Residence at the Yale School of Management and continues consulting independently. He can be contacted at pkontes@greenwichadvisorygroup.com.

<b>Praise for <i>The CEO, Strategy, and Shareholder Value</i></b> <p>"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."<br /> —<b>James E. (Jes) Staley</b>, CEO, J.P. Morgan Investment Bank</p> <p>"This is a first-class book that can make a difference in achieving results."<br /> —<b>Jim Kilts</b>, former chairman and CEO, The Gillette Company</p> <p>"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."<br /> —<b>Arthur Martinez</b>, former chairman and CEO, Sears, Roebuck and Company</p> <p>"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."<br /> —<b>Stan Garstka</b>, Deputy Dean and Professor in the Practice of Management, Yale School of Management</p>

US