Managing for Value

How to organize a company for maximizing value creation. Emphasizing Culture Change. Explanation of Managing for Value.

What is Managing for Value? Description

Managing for Value (MfV) is used as a synonym of (one of the three components of) Value Based Management.

It is also the subtitle of a groundbreaking book on Value Based Management "The Value Imperative" by James M. McTaggart ('94):

The Value Imperative

While moving beyond the strategies that managers have employed to create shareholder value - now the standard for business performance - management experts James McTaggart, Peter Kontes, and Michael Mankins revealed their powerful new framework for the systematic, day-to-day management of shareholder value. The authors attack head-on the fundamental weaknesses in current management practices, namely, the foothold that budgeting has over strategic planning and the lack of imagination in management plans that prevents real changes and consequences. They provide a systematic approach to "Value Based Management" that eliminates these weaknesses. They offer proven strategies for managing large, complex companies to consistently produce superior results for stockholders.

Starting with the principle that "cash flows drive value," McTaggart, Kontes, and Mankins show how to create a single governing objective that will enable managers to make decisions most likely to increase the company's competitive, organizational, and financial strength. Building on the objective of maximizing shareholder value, they outline the value based management framework that directly links a company's strategies and organization to its value in capital markets. Using real examples, they describe how to develop business and corporate strategies that substantially improve competitive position and increase market value, often within only two to five years. And as most large companies lack the internal processes that are necessary to manage for value on a sustained basis, the authors show managers how to build the five key processes that are institutional value drivers: governance, strategic planning, resource allocation, performance management, and top management compensation. Mastering these capabilities is fundamental to the ongoing, consistent creation of shareholder value over time.

Culture Change

Besides this, the term Managing for Value (MfV) is also used to describe a new perspective on Value Based Management, emphasizing company culture change aspects and focusing on translating efforts for sustained profitability and positive share price movement.

Book: James Mc Taggart e.o. - The Value Imperative - Managing for Superior Shareholder Returns -