Outperform with Expectations-Based Management: A State of the Art Approach to Creating and Enhancing Shareholder Value [Hardcover]

It′s easy to say that if a CEO can get performance measurement right, then performance improvement will follow. But what is the "right" measure of performance, and how do you use it to improve performance? Authors Tom Copeland and Aaron Dolgoff answer these questions and many more, as they show you how to find the measure of performance that has the strongest link to the creation of wealth for the owners of both public and private companies. They answer the puzzle of why growth in earnings is not correlated with shareholder returns and explain the under– and over–investment traps. And they explain how clear communications to investors and managers alike improve value.

The bottom line is that share prices go up when companies exceed expectations –– short–term and long–term –– of income statement and balance sheet performance and daily operating value drivers. Gain a complete understanding of EBM and discover how to do this, and much more, while staying competitive in an unforgiving business environment.

Financial professionals Tom Copeland and Aaron Dolgoff have long realized this relationship. That′s why they′ve created Expectations–Based Management (EBM)—a management tool that links performance measurement of businesses, and therefore management decisions and incentive design, directly to the total return to shareholders (TRS).

Now, in Outperform with Expectations–Based Management , Copeland and Dolgoff show executives and managers how to use this proven approach to create and enhance shareholder value. But, this book is not just for professionals that play a fundamental role in setting expectations. It′s also for investors who believe in using fundamental information to set their expectations for company performance, as well as analysts who forecast financial results and make investment recommendations.

Divided into three comprehensive sections, this guide skillfully illustrates how EBM can help you find profitable answers to numerous performance–related questions, such as: What drives my stock price? How do I measure business unit performance? And How do I design incentives for my managers?

Section one sets the stage for the entire book by highlighting the major flaws in traditional measures of performance and providing hard, irrefutable empirical evidence that proves EBM is highly correlated with market–adjusted TRS.

Through section two, Copeland and Dolgoff reveal the specific implications of EBM for:

• Managing and evaluating the performance of existing businesses
• Making wise capital expenditure decisions
• Creating value via capital efficiency
• Communicating with investors
• Understanding the market′s expectations for your company by reverse engineering your stock price
• Designing incentives that motivate value–focused decisions

In the final section, you′ll see EBM from entirely different perspectives—the investor′s point of view—as well as the public policy implications of this system. Section three also provides you with a frank comparison of the most popular value–based management systems with EBM.

To stay competitive in today′s business world, you can′t just meet expectations, you have to beat them. Outperform with Expectations–Based Management will show you how to do just this—and much more.