Management Actions and Long Term Actions

Few years back, I had a chance to interact with the management of three major telecom companies who have consistently delivered superior shareholder (stakeholder) return over the last two decade. I took time-out to look for an answer to question “How they kept creating value over the years?”
Here is the list of management actions / decisions (in random order) noticed by me as part of creating superior value to their stakeholders over the last two decade or so. I hope it is not too long…
- Build good domestic base (go for acquisitions if required).
- Leverage on sectoral development. Build on goodwill network as well as government connections (Go for advanced technologies being promoted by government and use them to capitalize on business opportunities)
- Incrementally build regional base and then international.
- Target high growth markets (Look for markets getting deregulated as a good opportunity for sales and business).
- Joint venture to get technology and enter / understand new markets.
- Scale (organic and acquisitions) post experience.
- Start with exports then focused pursuit of international opportunities (marketing effort tied to growth)
- Technological development - Bet on key new technologies. Invest in R&D (value add , no need if available cheaply from third party supplier)
- Enhanced customer recognition of the brand name (associate it what consumer desire)
- Try to gain leadership in the targeted market segment. Build on reputation.
- Regular business rationalization (divest if required, consolidate and eliminate excess capacity, streamline product line)
- Include new products with future significant growth in the business portfolio (management will always have an explanation)
- Clear segregation of business units. List spun off business to realize latent value
- Use flexibility in raising capital (holding company and operating company level). Bring down cost of capital as low as possible
- Prudent cost management
- Create a strong team work among top management. Keep alive the entrepreneurial spirit
- Top guy to hold and control the top 25 managers and let similar scheme go down the ladder incrementally
- Good MIS is necessary for operational and financial control. Put process in place as early as possible
- Corporate communications is critical for keeping the investor / public interest
- Buy / opt out the competition if threat. Play on core strength and differentiate.