RETURN ON INVESTMENT

We asked client CEOs to estimate the ROI to their companies at various implementation stages. During the first year, results show an average return of 29%. But the group reported a 114% average return in year two and a 150% average return in longer-term. A typical company surveyed had about 30 enrollees and paid roughly $75,000 during the first year. So while the program is not a 'quick fix', it pays for itself in year two. It also proves to be a strong investment in the long-term.

ROI_YR2_LT

MORE ALIGNMENT AND CONFIDENCE

Versus expectations of alignment and performance, the group indicated strong results in all surveyed areas (below). The strongest areas were Strategy, Planning, and Communication. The more experienced clients rated Predictability and Growth highly, as those are lagging success indicators of the program.

align_perf_chart

When asked to step back from the detail, the group showed a dramatic, unanimous increase in executive confidence after implementing the program. They rated the likelihood of success in reaching their 10-year vision 250% higher!

LikelyToVision

MORE PREDICTABLE PERFORMANCE

As referenced in Six Disciplines' Execution Revolution, external validation exists that supports investment in strategy execution. Whether the business valuation is a current priority or not, most owners and CEOs come around to looking at things from an investor's perspective -where predictable performance is king.

Companies A and B (example below) are used because they both achieved approximately the same compounded annual growth rate (CAGR) over twenty years'.  However, the up-and-down histories between them are clearly different. The 'how' they got there speaks volumes to investors beyond CAGR. Company A had Six Disciplines.

volatility

Of the top four factors that influence what investors are willing to pay for a business (below), the biggest factor by far is volatility of cash flow. For every 10% reduction in cash flow volatility a business achieves, the valuation increases by 40%! The investment world views all volatility as an indicator of “risk”. And aside from quantifiable risk, the qualitative value of predictable strategy execution is what we call the “sleep at night” factor. Clearly, investors agree with our clients in that strategy execution pays!

valuation

MORE EXECUTION CAPABILITY

Even the best teams struggle to consistently realize their full potential to execute strategy (a product of team alignment and individual performance). Ironically, success leads to increasing challenges - not necessarily more success.  As your teams grow, re-alignment and performance feedback are key to sustaining success. There is no better business investment than in execution capability. 

ex_cap

  pdf Policies and Trademarks pdf Terms of Use