Mercer Management JournalSetting the agenda
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Procter & Gamble
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$ b i l l i o n s
Note: Data is for April 1997 through April 2001. Source: Mercer Value Growth Database
By Ted Moser and Hanna Moukanas
Market value collapse
Finding the right drivers of value growth
With so many options,which initiatives really matter?
very firm needs an effective value growth agenda,but not all firms have one.How else toexplain the extraordinary number of great firms with strong brands,fine products,and greatpeople that have struggled in recent years: Compaq,British Telecom,Procter & Gamble,andXerox,to name just a few (Exhibit 1)?A high-impact value growth agenda is more than the “initiative
.”It’s a prioritized shortlist of actions designed to enable a firm to meet or exceed its own value growth targets andthe expectations of investors.It separates the essential “must dos”from the longer list of “should dos.”The agenda often combines a mix of significant operational improvements withfocused fundamental change.It should be tirelessly communicated to all members of a com-pany’s value growth coalition: customers,employees,suppliers,and investors.And since thecompany’s chosen profit zone is a moving target,the agenda needs to evolve over time.But a value growth agenda only succeeds when it focuses on the right growth levers,at theright time,and in the right sequence.And the company must execute it effectively.TakeCompaq,for example.At its inception in 1982,Compaq’s “IBM killer”value growth agenda wasperfect in focus,in sequence,on time,and flawlessly implemented.Compaq determined itcould produce the highest performing PCs with surprisingly low prices,thanks to strong engi-
Ted Moser and Hanna Moukanas are vice presidents of Mercer Management Consulting.Moser is based in San Francisco and Moukanas is based in Paris.