Wealth Creation: A Systems Mindset for Building and Investing in Businesses for the Long Term

Praise for Wealth Creation
"Bart effectively illustrates that neither unprincipled opportunism nor endless regulation can lead to business success and societal well–being. Instead, such universal benefits can only derive from a relentless focus on creating real, long–term value."
—Charles G. Koch, Chairman of the Board and CEO, Koch Industries, Inc.
"This book is for investors, but public policymakers take note. Its message for both is that wealth is created from within, not top down or outside in. For investors there are practical guidelines to identify firms early in their life cycle that demonstrate a high capacity for innovation and integrity, and that listen to and serve their customers. Policymakers must nurture this business environment for all to prosper."
—Vernon L. Smith, Economic Science Institute, Chapman University, Nobel Laureate in Economics, 2002
"We use the life–cycle framework explained in Bart Madden′s book as the linchpin for analyzing companies and diversifying clients′ portfolios. Before voting for leaders in Washington, we should quiz them on how well they understand the principles laid out in Wealth Creation."
—Christopher C. Faber, founder, IronBridge Capital Management, LP
"An imaginative [book] that integrates a dynamic approach to business systems with the fundamentals of wealth creation."
—Douglass C. North, Nobel Laureate in Economics, 1993
"This enlightening book helps the reader understand what is needed to get a free market economy to function ideally, and identifies significant shortcomings in current arrangements. Particularly illuminating is the emphasis on an absence of incentives for management to focus on long–term performance of the firm, and the failure of directors to provide effective oversight."
—William J. Baumol, author of The Free–Market Innovation Machine: Analyzing the Growth Mir acle of Capitalism
"Madden′s competitive life–cycle framework will provide insights that help forecast life–cycle patterns of economic returns that the firm will generate for its investors. I recommend this book to every long–term value investor."
—Ravi Jagannathan, Chicago Mercantile Exchange/John F. Sander Professor of Finance, Kellogg School of Management, Northwestern University

Spis treści:
Preface.
Acknowledgments.
Chapter 1 A Systems Mindset.
How We Know What We Think We Know.
The PAK (Perceiving–Acting–Knowing) Loop.
Purposes.
Perceptions.
Cause and Effect.
Actions and Consequences.
Feedback.
Knowledge Base.
Examples of Systems Thinking and Problem Solving.
High–Reliability Organizations.
Eli Goldratt, Business Theorist.
Colonel John Boyd, Military Theorist.
Correlation, Causality, and Control Systems.
Summary of Key Ideas.
Chapter 2 The Wealth–Creation System.
The Perception of Free–Market Capitalism.
The Housing and Credit Crisis of 2008–2009.
Government Regulation and Unknown Risks.
The Standard of Living.
Summary of Key Ideas.
Chapter 3 The Ideal Free–Market System.
Components of a Free–Market System.
Consumer Wealth, Producer Wealth, and Competition.
Efficiently Providing What Consumers Want.
Summary of Key Ideas.
Chapter 4 The Competitive Life–Cycle View of the Firm.
Competitive Life–Cycle Framework.
Firms’ Competitive Life Cycles and Dynamism.
Company Examples.
Eastman Kodak.
IBM.
Digital Equipment.
Apple.
Bethlehem Steel.
Nucor.
Kmart.
Medtronic.
Walgreen Company.
Donaldson Company.
Life–Cycle Observations.
Summary of Key Ideas.
Chapter 5 The Life–Cycle Valuation Model as a Total System.
Efficient Markets versus Behavioral F inance.
Valuation Model Principles.
Measurement Units.
Forward–Looking, Market–Derived Discount Rates.
Problems with CAPM Cost of Capital.
Improving the Valuation Process.
Investor Expectations: The Wal–Mart Example.
Critical Accounting Issues.
Reply to Critics.
Summary of Key Ideas.
Chapter 6 Business Firms as Lean, Value–Added Systems.
Lean Thinking and PAK Loop Components.
Knowledge Base.
Purposes.
Perceptions.
Cause and Effect.
Actions and Consequences.
Feedback.
A Lean Transformation Example: Danaher.
Summary of Key Ideas.
Chapter 7 Corporate Governance.
A Systems View for Corporate Governance.
Corporate Governance Needs Repair.
A Standard of Performance for Boards.
A Successful Cultural Transformation Example: Eisai Co., Ltd.
Shareholder Value Review.
Valuation Model Selection.
Value–Relevant Track Records.
Business Unit Analyses.
Reply to SVR Objections.
SVR as an Evolutionary Process.
Summary of Key Ideas.
Chapter 8 Concluding Thoughts.
Benefits for Public Policy Makers.
Benefits for Business Managers.
Benefits for Investors.
Notes.
References.
About the Author.
Index.

Nota biograficzna:
Bartley J. Madden is an independent researcher whose current focus is on market–based solutions to public policy issues, including FDA reform and corporate governance. In 1969, Madden cofounded Callard, Madden & Associates, where his research was instrumental in developing the CFROI (cash–flow–return–on–investment) valuation model that has become an integral part of the investment process for many large money management firms. He later managed portfolios for Harbor Capital Advisors. In the early 1990s, Madden joined HOLT Value Associates, a firm created to commercialize the CFROI valuation model worldwide. Madden retired in 2003 as a managing director of Credit Suisse, which acquired HOLT. He is the author of CFROI Valuation: A Total System Approach to Valuing the Firm.

Okładka tylna:
Praise for Wealth Creation
"Bart effectively illustrates that neither unprincipled opportunism nor endless regulation can lead to business success and societal well–being. Instead, such universal benefits can only derive from a relentless focus on creating real, long–term value."
—Charles G. Koch, Chairman of the Board and CEO, Koch Industries, Inc.
"This book is for investors, but public policymakers take note. Its message for both is that wealth is created from within, not top down or outside in. For investors there are practical guidelines to identify firms early in their life cycle that demonstrate a high capacity for innovation and integrity, and that listen to and serve their customers. Policymakers must nurture this business environment for all to prosper."
—Vernon L. Smith, Economic Science Institute, Chapman University, Nobel Laureate in Economics, 2002
"We use the life–cycle framework explained in Bart Madden′s book as the linchpin for analyzing companies and diversifying clients′ portfolios. Before voting for leaders in Washington, we should quiz them on how well they understand the principles laid out in Wealth Creation."
—Christopher C. Faber, founder, IronBridge Capital Management, LP
"An imaginative [book] that integrates a dynamic approach to business systems with the fundamentals of wealth creation."
—Douglass C. North, Nobel Laureate in Economics, 1993
"This enlightening book helps the reader understand what is needed to get a free market economy to function ideally, and identifies significant shortcomings in current arrangements. Particularly illuminating is the emphasis on an absence of incentives for management to focus on long–ter m performance of the firm, and the failure of directors to provide effective oversight."
—William J. Baumol, author of The Free–Market Innovation Machine: Analyzing the Growth Miracle of Capitalism
"Madden′s competitive life–cycle framework will provide insights that help forecast life–cycle patterns of economic returns that the firm will generate for its investors. I recommend this book to every long–term value investor."
—Ravi Jagannathan, Chicago Mercantile Exchange/John F. Sander Professor of Finance, Kellogg School of Management, Northwestern University