Value Creation: the new “Grow or Die”…?

When it comes to soundbites in business “Grow or Die” is probably about as useful as “Cake or Death?”* in 2024.

Fortunately, as we step blinking into the latest world new order of uncertainty and fewer easy wins, “Value Creation” has emerged as the weapon of choice to grow a successful organisation.  A framework that extends beyond Private Equity.

While top line growth still fits well with a Gordon Gekko-esque quote… we can now place Revenue Growth initiatives alongside Strategic Acquisition and put them in context with Margin Expansion, Debt Reduction and Multiple Expansion. Five Value Creation Drivers that look splendidly like standing Board agenda items.

Five Value Creation Drivers represent the top layer of a full Value Creation framework.  Add 27 Value Creation Levers and the strategic questions begin to drop.  Which levers are we backing to grow the organisation? Is it all out top line revenue? Is it the industrialisation of M&A activity? Are we all in on ESG or is that smoke, mirrors and pixie dust?

Every leadership team has a limited set of resources, a limited investment pot and a limited amount of management time to dedicate to each Value Creation Lever. Placing each possible lever in front of that team therefore forces decision making. They are literally the ones behind the wheel.

Tackling the gnarly decisions first means that a Value Creation Strategy can be drawn up.  The biggest bet levers need to be identified and be backed; focus is paramount. Alignment with strategic and exit objectives needs to be clear. The impactthat each lever can have to meet strategic objectives needs to be understood.

Once focus, alignment and impact have been addressed, with or without a dartboard, then the Value Creation Plan can be drawn up. Then initiatives can be defined, owned and resourced. Then the planning and execution of that VCP can be undertaken. Cue the VCP / Transformation crossover, cue the metric and business cases.

For more on Value Creation Strategy, Planning and Execution – do get in touch.

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