Robert X Cringely on the consequences of relentless focus on “shareholder value”.
The contemporary “business model” of most of today’s large enterprises, regardless domain, is based on relentless “focus on shareholder value” exlusively. And since the time horizon for that focus is extremely short term,essentially a quarter, all investments for the longer term future, including knowhow, quality, skills and employee loyalty, satisfaction and benefits, have been eliminated.
However, there is a growing insight with many younger corporate leaders – many of them inspired by Steve Denning’s Radical Management approach, that today’s “best business” practices are doomed, but it will likely be a very painful journey towards corporate starvation before large organizations are ready to change. Basically, the current generation of business executives must be culled, and replaced with new blood with different genes.
more on the same topic: http://www.forbes.com/sites/petercohan/2013/06/14/as-it-shrinks-in-a-growing-market-does-ibm-have-a-strategy/