VALUE CREATION THINKING

 

     

ENDORSEMENTS

“In a world where short-term thinking has taken hold for too many managers and investors, Value Creation Thinking provides a much needed perspective on the key drivers of long-term value.  Madden unites the fundamentals of financial valuation with a unique emphasis on corporate purpose, culture, and knowledge.  Based on decades of research and practice, Value Creation Thinking sheds light on enduring sources of competitive advantage and exposes how traditional business thinking and accounting practices often distract managers and investors from sustained performance.  By speaking the language of both shareholders and stakeholders, Madden provides an important contribution to our understanding of capitalism at a critical moment and an illuminating roadmap for the future of business.”

Dominic Barton, Global Managing Director, McKinsey & Co.

 

“A free society is an engine of wealth creation because individuals are free to pursue low-cost means of satisfying wants, and to innovate new methods and new products.  Bart Madden’s Value Creation Thinking is driven by the philosophy that an understanding of that process defines a path to the long-term increase in investor returns.  Principles abound—life cycle modeling of firm dynamics, system thinking, and the management priorities of CEOs from Charles Koch to John Allison and John Mackey.  We learn why firms like Eastman Kodak failed and why major product innovations like Michelin’s run-flat tires failed.  A firm’s culture is shown to play an exceedingly important role in delivering value to customers and achieving long-run profitability.  Beware the crony capitalist firm seeking profits from favors; the money is in creating value for customers.”

Vernon L. Smith, Professor of Economics, Finance and Law
Chapman University
Noble Laureate in Economics, 2002

 

“Bart Madden has written a provocative book that seeks to gain legitimacy for capitalism as the best way to mobilize society’s scarce resources in order to advance human progress.  He understands that the opposite of innovation is stagnation, not stability.  The book provides clear guidance to embattled CEOs and Directors seeking to pilot their firm through the chaotic market conditions of today’s globally-connected business world.  Madden’s proposed Life-Cycle Reviews offer a means for CEOs and Directors to improve their capital expenditure decisions and counteract Wall Street’s excessive focus on quarterly earnings.

The book should be used in business schools to enable students to better understand the purpose of the firm and management’s related responsibilities.  Business students and many others will appreciate the insights from life-cycle thinking that connect long-term corporate performance to stock prices.

Madden notes that we should all want free-market capitalism to triumph over crony capitalism which uses the coercive power of government to stifle competition.  His approach is to deeply examine how firms can nurture a knowledge-building culture, innovate, and create long-term value.  In my work, I focus on how managements can communicate their firm’s and capitalism’s dynamic contributions to the broader society.  My work challenges CEOs and Directors to engage with the political world in defense of capitalism.  These two approaches are very different and, yet, complementary.”

Fred L. Smith, founder of the Competitive Enterprise Institute and
Director of CEI’s Center for Advancing Capitalism

     
 

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