Driving Your Company’s Value: Strategic Benchmarking for Value (John Wiley & Sons, December 2004; ISBN 0-471-64855-8) is a must read for every business owner-manager. In a clear, easy-to-read manner, the authors Mard, Dunne, Osborne and Rigby have created a mini-MBA course applicable to every type and size of business organization. They bring into focus all the critical aspects of managing a business, including strategy, department-level daily operations, budgeting, and performance management at the entity level; and the necessary steps to grow the business in a “sustainable” fashion.

In a world where “growth in market share” has become the game at all costs, the authors warn of the consequences if failing to ensure that such growth is sustainable and manageable. In short, value creation is really the name of the game. They identify the core element of “true value” as: Maximization of all stakeholders’ value by maximizing free cash flow.

The authors have identified the key components of building value – often a nebulous concept – for businesses ranging from the Fortune 500 companies to sole proprietorships. By clarifying the “cause and effect” relationship between the various actions and results used in advanced-level qualitative and quantitative analysis techniques, they have effectively removed the mystery from the management concepts taught in MBA-level programs. The result: A business process framework under which any size operation can grow in a sustainable manner.

The authors describe the need for and the resultant value of developing a management process built on the principle of creating value for the stakeholders. They suggest setting strategic goals; identifying associated critical success factors to meeting the goals; and assigning related key performance measures/indicators at every level of the organization’s operations that can be effectively impacted by those responsible for them. Every step along the way takes into account both the qualitative and quantitative factors required to accomplish the goal of maximizing value, i.e., free cash flow.

The authors address all the critical decision making activities of business management in the process: strategic planning, budgeting, and operations review and analysis. The tools for these various functional activities are defined in detail along with a comprehensive approach for their implementation, right down to selecting the appropriate processes and measures. This creates a management framework that enables the effective and efficient identification and communication of strategic goals.

They suggest that, at this point, resources can be aligned to create value at every level of the organization’s operations in a coordinated manner; to equate all efforts with the stated strategy(ies). This results in a “company culture” that promotes sustained growth and value building for the long term.

Whether for their own company or their clients' companies, CPAs responsible for designing and implementing performance management systems now have a useful and concise supporting guide. The Strategic Benchmarking for Value framework helps tie performance measurements together by employing an effective visual methodology. The process culminates with a flowchart that shows performance improvements against relevant benchmarks across the entire organization with a common focus on maximizing the value of the company by increasing free cash flow.

In Driving Your Company’s Value: Strategic Benchmarking for Value, the authors have captured the essence of the key business management theories that have influenced business leaders over the last forty years and boiled them down to a straight forward, applicable business process that is relevant to companies of all sizes in today’s market.

About the Reviewer
William Braun, CPA, MBA, MIM, is a partner at Decision Point Solutions, LLC, in Los Angeles, California, where he specializes in providing performance management, Sarbanes-Oxley compliance and strategy implementation solutions. Bill can be reached at wbraun@decisionpoint.la.