ZAG: The Number-One Strategy of High-Performance Brands

When Good Shareholders Go Bad

At the Hudson Highland Center for High Performance, Susan Annunzio defines a high-performance company as one that makes money by developing new products, services, and markets. “The biggest impediment to high performance,” she says, “is short-term focus.” Short-term focus is often a reaction to the demands of shareholders, who are quick to sell off non-performing stocks. But non-performing stocks and non-performing companies are two different things.

The HARVARD BUSINESS REVIEW studied 275 companies over 11 years, dividing the companies into those that customers felt had become more differentiated and those that had become less differentiated. The more-differentiated companies realized a stock gain of 4.8% on the ...