The BizBasics courses emphasize the importance of discounted cash flow analysis to increase the share price of a publicly traded company. Of almost equal importance is the effect of intangibles on the share price. Many studies have been done in recent years on that impact.
One study — from Low and Seisfield’s Measures That Matter— lists ten such intangibles the market values. In reverse order, they are:
10. Quality of major business processes
9. Research leadership
8. Alignment of compensation with shareholder’s interests
7. Management expertise
6. Market share
5. Ability to attract and retain talented people
3. Quality of corporate strategy
2. Management credibility
1. Execution of corporate strategy
It is important to note that the market values the ability to execute a strategic plan (#1) more than having a quality strategic plan (#3).
Did you hear that?
The market values the ability to execute a strategic plan more than having a quality strategic plan.
As taught by a mentor, execution (or implementation as the Biz Bucks Guy calls it) is 95% of the effort in strategic planning. Company leaders often miss that point.
Getting a completed strategy for a specific planning horizon is important. But execution is not only more difficult but more crucial to success.
Key steps of implementation include 1) getting buy-in from key people, 2) communicating strategic direction — using aggressive communication tools (simulations, search conferences, work-out sessions), in addition to passive tools (wall posters, newsletters, etc.), 3) identifying gaps between the desired future and the current performance, 4) developing initiatives to close those gaps, and 5) the project management of those initiatives.
Do your people have these skills and tools? Do you?