Revenue growth and shareholder value do not always go hand in hand. Here are the four keys to delivering both




As companies plot their strategies for post-recession expansion, it is worth revisiting a basic principle of shareholder value creation that fell by the wayside during the last recovery: revenue growth and shareholder value growth do not always go hand in hand. Rather, as investors in companies such as Vivendi and Tyco learned recently, revenue growth that does not deliver growth in economic profit (earnings less a charge for the cost of capital) produces mediocre and even disastrous results. In our work with many of the top value creators in North America and Europe over the last 20 years, we have observed that four core management disciplines are required to deliver both revenue and profit.