The Value Mindset: Returning to the First Principles of Capitalist Enterprise

by Erik Stern; Mike Hutchinson

• ISBN13: 9780471650294
• ISBN10: 0471650293
• Format: Hardcover
• Copyright: 2004-03-01
• Publisher: WILEY

Summary

A groundbreaking book on building long-term wealth for stakeholders As creator of the Wealth Added Index (WAI), Stern Stewart's Erik Stern has become a beacon for creating shareholder value within the current storm of corporate malfeasance and poor performance. The Value Mindset shows readers how to develop this way of thinking by blending individual manager incentives with the proper corporate structure and the willingness to pursue value discipline over the long term. Filled with practical concepts that have proved themselves in the real world, this book shows readers how they can transform a company into an organization that can deliver value and returns to its shareholders. The Value Mindset helps readers develop this mindset-as well as implement it-by detailing the metrics that are necessary for any manager to measure and monitor value creation within the firm. Erik Stern (London, UK) is a Senior Vice President at Stern Stewart & Co., based in London. He has designed and implemented programs for companies in several industries in the United States and Europe. Mike Hutchinson (London, UK) is a Vice President at Stern Stewart & Co., based in London. He worked previously for the BBC and the Consumers' Association.

Author Biography

<b>ERIK STERN</b> is managing director of European operations and a senior vice president at Stern Stewart &amp; Co., based in London. He has designed and implemented EVA&#174; programs for companies in industries throughout the United States and Europe. Erik coauthored the EVAluation report on cascading EVA to shop-floor employees, The Capitalist Manifesto, and has written for a range of publications, including the Financial Times and Sunday Times in the UK, Berlingske Tidende in Denmark, El Mundo in Spain, and The Marker in Israel. Erik has appeared on TV, including Sky Business News and Bloomberg. He has an MBA from the University of Chicago and a BA from Brown University. <p> <b>MIKE HUTCHINSON</b> is a professional writer who worked previously as vice president, marketing, for Stern Stewart &amp; Co. in Europe, as well as for the BBC and Consumers&#8217; Association. He has written for a range of publications throughout Europe and the UK, including the Financial Times, Sunday Times, and the Mirror, and has appeared on TV. He has an MA from Trinity College, Cambridge.

Table of Contents

Preface	vii
Acknowledgments	ix
Introduction	1	(10)
PART ONE VALUE MINDSET
1 A Revolution in Value	11	(10)
2 The Efficiency of the Market	21	(6)
3 Other People's Money	27	(8)
4 Corporate Governance in Crisis	35	(8)
5 Back to Basics	43	(10)
6 Introduction to Incentives	53	(6)
7 Growing Value	59	(6)
8 Focus on Value	65	(10)
9 The Mindset of Success	75
PART TWO STRATEGIC RECONFIGURATION-UNLEASHING HIDDEN VALUE
10 Configuring Companies	83	(12)
11 Changing Organizational Architecture	95	(10)
12 Strategic Reconfiguration in Theory	105	(10)
13 Strategic Reconfiguration in Practice	115	(42)
14 The Growth of Content	157	(6)
15 The Benefits of Strategic Reconfiguration	163	(8)
PART THREE FINANCIAL ARCHITECTURE-CHALLENGING EXISTING THINKING
16 Paying for Size	171	(6)
17 Acquisitions	177	(6)
18 Outcomes as Real Options	183	(12)
19 Divestments	195	(6)
20 Initial Public Offerings	201	(4)
21 Financing Issues	205	(12)
PART FOUR MOTIVATING MANAGERS AND EMPLOYEES TO DELIVER VALUE
22 Awarding Decision Rights	217	(8)
23 Fixed Pay and Incentives	225	(8)
24 Balancing Incentives	233	(6)
25 Do Options Encourage Value Creation?	239	(4)
26 The Value of Variable Pay	243	(10)
27 Franchising as a Value Mindset	253	(12)
28 Share Options	265	(4)
29 Motivating All Employees to Create Value	269	(6)
30 The Benefits of Variable Pay	275	(12)
PART FIVE TAKING STRATEGIC RECONFIGURATION FURTHER-THE PUBLIC SECTOR
31 The State We're In	287	(14)
32 How Did the State Grow So Large?	301	(14)
33 Let Us Build Up a Decent World	315	(18)
34 Reconfiguring Global Relations I	333	(12)
35 Reconfiguring the State	345	(30)
36 Reconfiguring Global Relations II	375	(28)
PART SIX CONCLUSION
37 Opportunity for All	403	(4)
38 A Final Word	407	(2)
Appendix Miscellaneous Industries	409	(26)
Index	435