Maximizing Shareholder Value
The objective of management is to maximize shareholder value. To achieve that objective, most business leaders set strategies for and measure their results against areas like service quality, supplier satisfaction, current profitability, employee morale and overall operating costs. Managing these measures from a balanced perspective is critical to creating long-term shareholder value.
An important, yet often overlooked measure is business culture. Setting strategy and measuring performance in this area will further enhance long-term shareholder value.
Business culture is a living part of all businesses. It is your perception of what you are and your customer's perception of what you are. It is the values that businesses use to filter all their decision-making. The people in the business and the way they do things. Their attitudes, their beliefs and the way the communicate with one another.
Succesful businesses possess a strong culture. One that encourages growth, innovation and has an overall positive environment. Strong business cultures do not develop themselves. Therefore, business leaders must build culture development into the company's strategy.
Succesful businesses are a community asset. They provide a needed service to the community, employ its people, pay taxes, make capital investments and hopefully generate a reasonable and sustainable return on the shareholders investment. As part of their business culture, successful business leaders include community involvement in their company's strategy. They recognize that it is the community that is supporting their business. Business leaders that set a strategy for giving (time, talent, and treasure), help build a better community and therefore, a better business.