Most managers and executives are looking for ways to constantly develop a business strategy that works for their business. In 2012, a business is considered successful if it is return-driven. Return-driven businesses are those that plan and implement business activities consistently with the tenets and foundations and exhibit extraordinary financial results.
Studies have shown that these types of businesses follow the Return Driven Strategy (RDS). RDS provides an understanding of what specific types of business activities drive the highest levels of wealth-creation. With its foundations in one of the most advanced financial modeling frameworks, it provides a business strategy for forecasting the potential for a particular initiative to create wealth or destroy it.
Concepts of RDS
There are often misunderstandings about business strategy that have led many companies to destroy value, or have severely limited the wealth that could have been created. But there are specific concepts supported by the framework that have led to business success, such as:
– Businesses with great products are often not great businesses
– When to shrink and grow rich – or grow and be poor
– Why “first mover advantage” is often anything but
– The undeniable financial impact of business ethics on performance
– “Being different” is a by-product of great strategy, not a focus
– How a monopoly, generally so desired, will cause valuations to stagnate
– The difference between a great company and a great stock
– The real customer needs are seldom the obvious ones
– How treating employees as customers generates higher returns to all constituents
– Which is more important, strategy or execution? Both.
The highest benefit that RDS gives to management is better resource allocation: the prioritization of time and efforts in planning, analysis, and implementation, which are critical in adding value to a business.
As projects compete for capital, time, and resources, Return Driven Strategy can assist management in choosing and timing the actions that are best poised for achieving the organization’s goals.
About the Strategic Management Framework
The RDS framework appears in pyramid form, in order of importance in long-term performance and valuation impact.
The framework is in use in strategic planning and management consulting at firms with revenues ranging from a few million dollars to billions annually. Some of these organizations have been large, publicly traded companies. Others have been privately-held or family-owned businesses.
Business strategy executives from a number of the world’s largest and most successful companies – and from some of the most troubled – have attended Return Driven Strategy seminars, and spoken in panel discussions and speeches about the future of their firms.