The perfect prey: the fall of ABN AMRO, or what went wrong in the banking industry

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Notes

1. ‘Our early work helped business leaders identify where value was being created and destroyed within their business portfolios. We pioneered performance measures such as economic profit and warranted equity value, which incorporate a charge for the capital employed in the business. We called this new approach “Value-Based Portfolio Management.” It was a big idea and a great platform for developing our US business through the early 1980s. However, while value-based measures help business leaders unlock value, we were already starting to help managers gain greater insight into forward-looking investments. So we broadened our practice by linking value-based measures to strategic planning at the business unit as well as corporate level. Reflecting the expanded focus of our practice, we renamed our approach “Value-Based Management.” By the mid-1990s, as we were increasingly serving businesses in Europe as well as the US, we realized that the managerial challenge of creating value year after year required organizational changes; not just new information and management processes, but also innovative ways of structuring and leading the practice. So we developed new approaches that made strategy development a continuous process supported by insightful market and competitor information. We developed new ways of thinking about resource allocation, performance management and executive compensation, all of which helped managers instill in their companies the clarity and accountability that capital markets demand from the outside. We renamed our approach “Managing for Value” (MfV) to reflect the breadth of our practice and the depth of our understanding of the art and science of management. Today, as part of Charles River Associates, we continue to use the principles and tools of MfV to bring together external, customer and internal perspectives on our clients to identify and deliver step change improvements in value’ ( http://www.marakon.com/our history).