How Independent professionals maximize wealth… ethically. Return Driven Strategy

Tuesday: Write with the Pen of the Masters FROM THE DESK OF MILES EVERSON: Great businesses follow a framework to ensure high performance and superior returns. One of these frameworks that has been proven to be effective is Return Driven Strategy. Haven’t heard about it? See how to maximize your resources and generate higher returns for your enterprise. CEO, MBO Partners Chairman of the Advisory Board, The I Institute

How Independent professionals maximize wealth… ethically. Return Driven Strategy Return Driven Strategy Return Driven Strategy is a framework that helps leaders execute methods that have been shown to produce superior returns and wealth creation. It is discussed and elaborated further in the book, DRIVEN, which was authored by Professor Joel Litman, Valens Research’s President and CEO, and Mark L. Frigo, the Director of The Center for Strategy, Execution, and Valuation at DePaul University’s Kellstadt Graduate School of Business. The framework describes the pattern of strategic activities of high-performance companies. By “high-performance,” we mean companies that showed best-in-class performance for 10 consecutive years or more in these three areas: ROA (Return on Assets) Growth Total Shareholder Returns As mentioned in the book, around 100 publicly-traded companies met this criteria for its publishing. Return Driven Strategy consists of 11 tenets representing 11 activities that lead to wealth creation. These principles are positioned in the shape of a pyramid. Below the tenets are three aspects that serve as the foundation of the pyramid. These three apply to every tenet in the framework, helping leaders, management teams, and even independents achieve their objectives. In this article, we’ll focus on the top tenet of the Return Driven Strategy: Ethically maximize wealth. The first tenet is a commitment to wealth creation itself. In order to achieve this goal, you must be able to define wealth explicitly. As an independent professional, what first comes to your mind when you hear the word, “wealth”? Money? Good health? A strong workforce? It’s important that you have a clear concept of what your wealth is, so you have a concrete idea on what you’re going to maximize. Once you have a clear-cut definition, you have to align your activities toward that goal of wealth creation. Think about some of the successful companies you know. One of the reasons why these businesses reach greater heights is because their leaders and managers are very clear about what they are trying to achieve and how they intend to get there. This is critical to your work as an independent professional. However, in working to maximize your wealth, keep in mind that there’s another word attached to it: ETHICS. ―the moral principles that govern an individual’s behavior or a company’s operating activities. According to DRIVEN, there’s a lot of financial evidence that shows how “gross unethical conduct is a business risk that does not bear a justifying reward.” This means in order to create and maximize wealth, you have to make sure that your strategies, plans, and activities fall within the ethical parameters of the community where you operate. Doing so will yield positive and desirable outcomes that your clients, community, and business will all benefit from. On the other hand, failure to operate ethically will not just hinder you from accomplishing your goals, but will also risk everything you hope to achieve in the long run. So, what’s the bottomline of the first tenet? There’s nothing wrong with wanting to maximize your wealth. BUT! You just have to make sure your activities fall within the bounds of ethics or the policies of the community where you’re operating so you can enjoy the benefits of generating wealth. Hope you found this week’s insights interesting and helpful. Follow us on LinkedIn.