Driving Your Company's Value: Strategic Benchmarking for Value (SBV) was developed based on the authors' years of experience as company managers, military officer and trainer, consultants and valuation professionals.

Our accounting systems and their related analysis systems have been around for many years, so why do we continually move from one management fad to another? In contrast, SBV emphasizes traditional business management concepts and analysis many of which were developed in the early 1900s. These methods are still relevant today and when used appropriately will allow management to drive their company's value to higher levels.

Rick Norris JD, CPA wrote the following about Driving Your Company's Value: Strategic Benchmarking for Value:

Cash is king!" "Knowledge is power!" And your point? You have heard these phrases echoed through the halls of business institutions and board rooms. But so what? What effect does cash and knowledge have on the value of a company? How does cash affect strategy? And, how do you know what its effects are?

These are some of the questions answered by Driving Your Company's Value: Strategic Benchmarking for Value. The authors attack the difficult and ever-turbulent world of value and use the common method of benchmarking (knowledge) to arrive at a novel insight regarding business health.

Mard et al start with this premise: "To ensure that the strategy is executed effectively, the company needs a benchmarking system to monitor the effectiveness of the strategy and to identify necessary modifications to the strategy to enhance the value creation process." To this end, the book uses a very concise and structured framework consisting of five steps: The current state of a company; the future state of a company; strategic benchmarking keys; alignment execution; and monitoring.

In step one, Current State, the book breaks the (quantitative) norm by emphasizing the importance of the company's qualitative attributes. In assessing the current state of the company, qualitative attributes, which are usually overlooked, focus on strategically important aspects like the company's position in the marketplace. The point is to develop the company's critical success factors (CSF), or its performance measurements (PM), which are external factors in the lifeblood of a strategy. Likewise, the company's current internal state is also considered. Its business strategy, stage of development, differentiation from competitors, intangible assets and value chains all have substantial impact on the qualitative aspects of the CSFs and the quantitative aspects of the PMs. The juxtaposition of these views help establish an accurate assessment of the company's affairs.

The second step, Future State, in the Strategic Benchmarking for Value (SBV) process is documenting management's vision of the company's future. Each of the previously mentioned components, CSFs, PMs, and benchmarking are recomputed to document the company's future state. Mard et al cleverly weave these components together while setting the framework for developing the company's future core strategy.

The third step, Strategic Benchmarking Keys, in SBV solves the problem of strategic alignment. . We see how the SBV process effectively executes a company's strategy, leverages their support systems, and optimizes the peoples' competencies in order to sustain growth, productivity and build company value. The focus is on the return on equity and free cash flow. The book uses tools such as the Rose Strategy Map which illustrates the leadership's strategic intent to the lowest business unit in the company.

Step four, Alignment Execution, brings the whole process together. Mard, et. al. cleverly lead the reader through crescendos of "ah-ah!" by alignment of the strategy, systems and people that make the SBV process work. They stress that this step is the most important in strategy execution. They address and analyze the most common inhibitors of achieving alignment which are interdependence and synchronization.

Finally, step five, Monitoring, is the real epiphany. Mard, et. al. explain that now that you have implemented the SBV process, you need an SBV Scorecard to convert the strategy maps into reliable, timely, and workable format.

SBV is not just another management book. Unlike other fifty-dollar theories that may surface constantly from business journals, product seminars and symposiums, SBV demonstrates a methodology using real-life issues and historic business concepts. Business decision-makers from the small business owner to the corporate executive can relate to the examples and diagrams used in this book. Mard et al try to anticipate the questions a decision-maker may have when confronted with strategy issues. The simple explanation of business metrics along with their applications gives the reader a whole picture of the message Mard et al are trying to convey. In this light, the book can be used not only as a text book, but also as a reference book through the vicissitudes of the business world.

If the book were to have any shortcomings, it would be in the technological implementation of the theory. The five step process is an excellent process for guiding a company into benchmarking, however, how do you execute that technologically? Most companies use Microsoft Excel to plan their projects. Excel, however, has only a double dimension (rows and columns), and is stagnate in its analysis. The software can compare benchmarks and actual metrics if manually entered. However, this type of analysis will not suffice because it displays results at one moment of time, and under one condition. In addition, there will be no real-time analysis of the data by department, or location without linking spreadsheets which has shown to be a very daunting process. The Mobley Index, illustrated in the book, probably exhibits the extent to which Excel can help you.

In order to execute the SBV theory, the authors need to incorporate the power of an integrated process mapping-scorecard-Analysis Services combination of software. The book alludes to scorecarding without explaining how real scorecarding software functions. In this situation, unless it is tied into a process mapping system, the correlation of people and their performance will be lost.

Implement the SBV theory with the right tools, and the result will open even the most skeptical executive's eyes. SBV should be a prime reference material for every high level executive striving to breakdown the components of company value and strategy.

The book will take you though the value formula supporting your company's value and its two primary components: cash flows and company risk. SBV utilizes traditional management tools like:

• The DuPont Formula's three factor analysis from the early 1900s
• The Value Formula from the first half of the twentieth century
• The Mobley Matrix develop at IBM's Executive Training School in the 1950s and
• An enhanced Management Framework developed in the 1990s.

Want to get an idea of how it all works?  Check out the downloadable overview of the SBV Model.  The Overview is an excerpt from the book Driving Your Company's Value, which will give you an idea of the overall concepts behind the Strategic Benchmarking for Value Model.Click on the PDF file to download thecomplete SBV Model Overview.

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