8. If what you are suggesting is so intuitive, why aren’t business leaders already doing all this?
It turns out that there are powerful forces causing business leaders not to deploy much resource into what’s needed to boost value. First and foremost is the mind-set shift we discussed earlier; on entering the C-suite, and the CEO’s office in particular, business leaders face a completely new environment and set of success factors. Unfortunately, it takes time to relinquish what has made functional leaders successful, and adopt a focus on shareholder value – and all that comes with it; a long-range view, an orientation around cash flow, and a more outward-facing perspective. Since it is so new, there is also little experience of what must be prioritized to achieve value growth – something this book addresses directly.
Moreover, the siloing of skills within the organization exacerbates the problem. Not only are business leaders the only ones in the organization accountable for such market moves, but they are unlikely to find appropriately skilled support on staff to carry out the work needed. Indeed, support staff typically operate from within the silos, and more often than not, they are drawing attention away from long-range market strategy issues in order to get some very visible near-term challenges resolved.
Finally, the reliance on financial accounting information to measure the business and its parts substantially misleads investment prioritizations, and the temptation to look at something less than a fifteen year horizon is overpowering when that timeframe exceeds the business leader’s tenure and near-term distractions are screaming for attention; in these situations, planning long-range market moves appear esoteric.