Reframing the Rules of Value Creation
It’s the clarion call of all investors…value creation! And it’s wrong. What investors want is wealth creation – the result of value creation. Isn’t it time we got these two ideas straight? Facebook’s ability to justify the wealth it will inevitably reap from its IPO later in 2012 is strictly a function of the value it creates; not for investors, but for you and me; it’s users. (Complex equation: lots of value = lots of wealth.)
For all the time and attention paid to sophisticated economic analysis, market trends, competition and technology, creating successful business strategy designed to drive long term value is never a sure thing. Where value creation is the goal, however, managers must begin with a clear understanding of the source of that value — the identities of their organizations — or risk putting their companies on a path to inevitable decline. (Hint: Wealth never precedes value.)
Please download this valuable resource to distinguish value creation from wealth creation and how to re-frame it successfully.