10X Value: The Engine Powering Long-term Shareholder Returns

What does it take to grow shareholder value at world-class rates? For many years companies have successfully focused their efforts on cost reduction through increased labor and asset productivity and have achieved short-term increases in shareholder value as a reward. Today, with their businesses re-engineered and running efficiently, these companies have refocused their energies into developing long-term growth strategies. Aggressive revenue-oriented strategies are the most common approach to creating long-term value for shareholders. These strategies typically include acquisitions, new products that extend the line and marketing programs to improve customer loyalty and retention. Unfortunately, our research indicates that these strategies can cause more harm than good because superior long-term value for shareholders results only from a specific type of revenue growth: growth that results when a company delivers an order-of- magnitude increase in value to its customers (what we call “10X value”).

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