You are previewing The Blue Line Imperative: What Managing for Value Really Means.
O'Reilly logo
The Blue Line Imperative: What Managing for Value Really Means

Book Description

A groundbreaking guide to making profitable business decisions

Do you wonder why your value initiatives aren't providing the payoff you'd hoped for? Could it be because you've been thinking about value all wrong? According to the authors of this groundbreaking guide, there's a very good chance that you have. Using examples from leading companies worldwide, they explain why every decision a company makes either creates value or detracts from it, and why, if they hope to survive and thrive in today's increasingly competitive global marketplace, company leaders must make value-creation the centrepiece of every business decision. Authors Kaiser and Young have dubbed this approach "Blue-Line Management," (BLM), and in this entertaining, highly accessible book, they delineate BLM principles and practices and show you how to implement them in your company.

  • Explains why the failure to properly define and assess value often makes it difficult for the people who manage businesses to effect long-term success

  • Offers guidelines for making the satisfaction of customer needs and wants—i.e. value creation—the driver of all business activities

  • The authors are respected academics at INSEAD, the world's largest and most respected graduate business school, with campuses in Europe, Asia and the Middle East

Table of Contents

  1. Cover
  2. Endorsements
  3. Title page
  4. Copyright page
  5. Dedication
  6. Preface
  7. Acknowledgments
  8. Chapter One: What Is Value?
    1. We Want Our Stuff
    2. Centuries of Subsistence
    3. A Matter of Power
    4. The Rise of the Consumer
  9. Chapter Two: The Global Capital Market
    1. How Capital Markets Help Us Get Our Stuff
    2. Making Balance of Lopsidedness
    3. But Who Decides Which Projects See the Light of Day?
    4. The Downside: Agency Costs
    5. In the Best Systems, No One is in Charge
    6. The Relationship Problem
    7. Bacteria, Crowds, and the Markets
  10. Chapter Three: The Opportunity Cost of Capital
    1. Fooling Nature
    2. So How Do We Make the Right Guesses in the World of Business?
    3. A Matter of Risk
    4. The Premium
    5. Summary
    6. The Mathematics of the Opportunity Cost of Capital
    7. How Do I Calculate the Opportunity Cost of Capital for the Investment My Company is Considering?
    8. So Why isn't the Opportunity Cost of Capital Zero?
  11. Chapter Four: The Expected Future Free Cash Flows
    1. It isn't Price
    2. Getting at an Idea of Value
    3. Free Cash Flow
    4. Net Present Value: Discounting the Expected Future Free Cash Flows at the Opportunity Cost of Capital
    5. Getting the Right Cash Flows: Modigliani and Miller
    6. What about Weighted-Average Cost of Capital?
  12. Chapter Five: Blue Line Management
    1. Value Creation and the Blue Line
    2. Seeing the Blue Line
    3. The Curse of the Red Line
    4. The Problem with Indicators
    5. A Blue Line Approach to Key Performance Indicators
    6. Getting Indicators and Value Drivers Straight
    7. When Red is Blue
  13. Chapter Six: Shifting to Blue
    1. The Indicator Illusion
    2. Goodhart's Law
  14. Chapter Seven: The Hazard of Growth
    1. Competitive Advantage
    2. Growth Versus Value
    3. Value-Destroying Growth: A Cautionary Tale
    4. If Growth is So Bad, Why are Companies Obsessed with It?
    5. The Problem with Executive Pay
  15. Chapter Eight: Creating a Blue Line Culture
    1. The Three Pillars
    2. Fair Process
    3. The Perils of Opinion
    4. Visions, Missions, and the Blue Line
  16. Chapter Nine: Trust and Hierarchy in Blue Line Management
    1. Why Trust Matters
    2. Fairness, Trust, and Information Flow
    3. Getting the Right Information to the Right People, Fast: The Case of Alcoa
    4. Hierarchies and Information Flows
    5. Trust Leads to Quicker Decision-Making and Happier Customers
    6. The Future of Hierarchy
  17. Chapter Ten: Value and Decision-Making
    1. Value and Physics
    2. Indicators, Data, and the Blue Line Firm
    3. Value-Based Decision-Making in Action
    4. A Brief Digression Regarding Management Consultants
  18. Chapter Eleven: Getting Net Present Value Right
    1. Mechanics and the Definition of Free Cash Flow
    2. The Mechanics of Estimating an Appropriate Discount Rate
  19. Chapter Twelve: Becoming a Blue Line Manager
    1. How can I Become More of a Blue Line Manager?
    2. Design Your Own Blue Line Questions
    3. A Final Word
  20. Appendix: Blue Line Questions
  21. Index