Creating value in an enterprise is complementary to corporate strategy considerations.  They are not separate functions and should be considered together in the same meetings, ideally by the same people.  In this article, we succinctly lay out what we believe are the key drivers to creating value for shareholders, whether the holdings are public or private.  Our team has extensive experience in these areas and believes that the strategy for creating value is not “floating in the mist”, but rather definable to a large degree, and should be accessible to all c-level business builders.  Hence, we present the Investonym team’s treatise on how to create value.

You may wish to review our article on Corporate Strategy in the Advisory and Strategy area of Investonym as well.  In this article we suggest that an effective corporate strategy identifies and finds ways to best utilize a firm’s competitive advantage in the marketplace.  By doing so, a firm is by definition creating value for its owners / investors.  The relationship between creating value and corporate strategy is circular though.  By creating value, you are crafting the future strategy of the company as you continually develop the future competitive advantages of the firm.

When a firm’s leaders create value effectively, they cause a chain reaction of great things to occur throughout the firm.  Their actions create cheaper debt financing for the firm (through lower interest rates) and a stronger currency to make Acquisitions (by increasing the firm’s Stock price).  This makes the firm stronger, which attracts better employees that will buy into the firm’s philosophy.  Further aligning employees through incentives is often a very good tool to further enhance value.  These actions free up more capital to focus on the intangibles such as improving customer relations, support and quality.  These initiatives in turn strengthen the brand in the marketplace.  Ultimately a virtuous circle is established and the firm becomes truly top tier.