Book review: "The Value Imperative"

Taggart, Kontes & Mankins published The Value Imperative in 1994. Why am I recommending that you read a 19 year old book? Well, age should not be a major consideration in the first place, but here are my reasons.



It is valuable to understand the modern history of the strategic management advice dished out by the management consulting industry. When the book was published the management consulting industry had just experienced 20 years of uninterrupted growth. Models and frameworks had been tried, improved, and tested many times over. This book very much describes the result of these decades of achievement. It is written by consultants at a then medium-sized consulting company called Marakon. The book takes a shareholder value approach and describes how the large corporation needs to think about strategy. The specifics might vary, but I believe the book describes the type of work that most management consulting companies did at the time. The approach is decidedly analytic and practical. The focus is on the product market strategy as well as corporate strategy. Typical for the time, there is no focus on strategy implementation, but the authors have begun to think about structural mechanisms (e.g. resource allocation system, top management compensation system) as means to implement strategy. There is still a belief that generalist consultants will be most suited to add value to clients and there is still a focus on the large companies that can afford to pay management consulting fees in cash. Cutting edge infographics at the time consisted of Manhattan, marimekko, waterfall and bubble charts (the latter two the only ones implemented in Excel).

Some material in the book is currently out of fashion, but still very much needed. During the last 20 years the management consulting industry has not been the powerhouse it once was. It is still attracting good people, but a brain drain to the financial industry (e.g. private equity, investment banking, hedge funds) has occurred. During the same time, many companies became disillusioned by the very analytic nature of strategy. CEOs wanted help to implement changes in their organisation, not help to set the strategy of their organisations. The management consulting industry responded by adding industry specific knowledge and get more involved in implementation issues. In the process the management consultants often lost touch with strategy related issues. Sometimes it can be useful to go back to basics. Many multi-business firms currently engage in a lot of activities that destroy value (e.g. Dell, HP, Sony). These firms would profit immensely by a very basic value creation analysis. Another promising line of inquiry is how to use structural mechanisms to change behaviour. This approach is only embryonic in the book, but could serve as a stepping stone for more advanced frameworks.

This is a four star book (very good) if you are interested in a historical perspective. It is only relevant for those interesting in management consulting or strategic management in a staff role. I do not think the book is valuable for general managers. I do not think the book is of general interest to students.