Our latest perspective - What's behind under-performing listed companies?
Outperforming through the downturn
Breaking Covid-19 / Corona-virus pandemic news, how to lead
Decreased uncertainty, improved decisions
Global Advisors is a leader in defining quantified strategies, decreasing uncertainty, improving decisions and achieving measureable results.
We specialise in providing highly-analytical data-driven recommendations in the face of significant uncertainty.
We utilise advanced predictive analytics to build robust strategies and enable our clients to make calculated decisions.
We support implementation of adaptive capability and capacity.
By Marc Wilson
Marc is a partner at Global Advisors and based in Johannesburg, South Africa
Download this article at https://globaladvisors.biz/blog/2018/06/26/leading-a-deliberate-life/.
Picket fences. Family of four. Management position.
Mid-life crisis. Meaning. Purpose.
Someone once said that, “At 18, I had all the answers. At 35, I realised I didn’t know the question.”
Serendipity has a lot going for it. Many people might sail through life taking what comes and enjoying the moment. Others might be open to chance and have nothing go right for them.
Some people might strive to achieve, realise rare successes and be bitterly unhappy. Others might be driven and enjoy incredible success and fulfilment.
Perhaps the majority of us become beholden to the momentum of our lives.
We might study, start a career, marry, buy a dream house, have children, send them to a top school. Those steps make up components of many of our dreams. They are steps that may define each subsequent choice. As I discussed this with a friend recently, he remarked that few of these steps had been subject of deliberations in his life – increasingly these steps were the outcome of momentum. Each will shape every step he takes for the rest of his life. He would not have things any other way, but if he knew what he knows now, he might have been more deliberate about choice and consequence…..
By Stuart Graham and Marc Wilson
Stuart is a manager and Marc is a partner at Global Advisors.
Both are based in Johannesburg, South Africa.
Growth, profit or returns? It’s all three, however we find that the relationship between these and shareholder value creation is poorly understood – if at all.
All three measures become critical to the way forward as companies navigate the Covid-19 crisis.
After ensuring business survival, navigating through the Covid-19 crisis requires returns on invested capital AND growth to deliver shareholder returns. S&P 500 companies averaged 13% RONA and 5% revenue growth (CAGR) through the financial crisis (2008-2012) .
Monolithic survival approaches may starve compensating growth opportunities – a portfolio approach is required.
Returns are not enough – companies must also grow to create value.
Profits and cash flows cannot increase indefinitely through cost-reduction, efficiency, business mix, etc – top-line growth is critical.
Returns must be above costs of capital to be value accretive.
S&P 500 companies averaged 13% ROIC and 5% revenue growth (CAGR) through the financial crisis (2008-2012).
Margins and revenue growth, or even profit growth in themselves don’t answer that question of whether shareholder value was created or destroyed. There are many examples of where growth and high margins actually destroy value.
Company valuations reflect an aggregate of their business portfolio – rebalancing segments based on their growth and return profiles can lift company value.
Growth requires investment – at the very least in the working capital required to support revenue growth.
Measuring RONA or ROIC and Revenue growth shows whether business activity is value accretive or destructive.
You can use the Global Advisors Market Cap (valuation) framework to map your business – and agree action to deliver improved shareholder returns.
Aatish Bhatia – in collaboration with Minute Physics – did an amazing job of visualizing the Covid 19 data. His logarithmaic juxtaposition of total versus new cases shows when the virus growth begins to slow.
- Logarithmic plotting of new vs total cases shows when infection rates (as measured) slow
- When plotted in this way, exponential growth is represented as a straight line that slopes upwards
- The x-axis of this graph is not time, but is instead the total number of cases or deaths
- Notice that almost all countries follow a very similar path of exponential growth
You can choose the numbers to plot at Covid trends
No Results Found
The page you requested could not be found. Try refining your search, or use the navigation above to locate the post.
Global Advisors is different
We help clients to measurably improve strategic decision-making and the results they achieve through defining clearly prioritised choices, reducing uncertainty, winning hearts and minds and partnering to deliver.
Our difference is embodied in our team. Our values define us.
Corporate portfolio strategy
Define optimal business portfolios aligned with investor expectations
BUSINESS UNIT STRATEGY
Define how to win against competitors
Reach full potential
Understand your business’ core, reach full potential and grow into optimal adjacencies
M&A, due diligence, deal structuring, balance sheet optimisation
Global Advisors Digital Data Analytics
14 years of quantitative and data science experience
An enabler to delivering quantified strategy and accelerated implementation
Digital enablement, acceleration and data science
Leading-edge data science and digital skills
Experts in large data processing, analytics and data visualisation
Developers of digital proof-of-concepts
An accelerator for Global Advisors and our clients
Join Global Advisors
We hire and grow amazing people
Consultants join our firm based on a fit with our values, culture and vision. They believe in and are excited by our differentiated approach. They realise that working on our clients’ most important projects is a privilege. While the problems we solve are strategic to clients, consultants recognise that solutions primarily require hard work – rigorous and thorough analysis, partnering with client team members to overcome political and emotional obstacles, and a large investment in knowledge development and self-growth.
Get In Touch
16th Floor, The Forum, 2 Maude Street, Sandton, Johannesburg, South Africa