The EVA Challenge: Implementing Value–Added Change in an Organization

Praise for The EVA Challenge

"The EVA Challenge provides helpful insights for both the beginner and the advanced EVA practitioner. Its real–life examples illustrate how the practical application of shareholder value orientation can align the goals of all organizational levels, motivate management by linking compensation to EVA performance, and bring additional value to shareholders."–Dr. Karl–Hermann Baumann, Chairman of the Supervisory Board

Siemens, A.G.

"A very valuable book for practicing managers who must solve problems. The authors provide a wealth of information and examples not only on implementing EVA, but on performance measurement and compensation in general. Their analysis is first rate. They draw from their extensive experience and from real companies, problems and solutions. I especially like the chapter on EVA failures."–Michael C. Jensen, Managing Director, Organizational Strategy Practice, The Monitor Group, Jessi Isidor Strauss Professor Emeritus, Harvard Business School

"Joel Stern knows this subject matter better than anyone. He adapted EVA so that we could use it to incent management at the United States Postal Service to greatly improve performance. We stopped losing billions and started turning profits."–Marvin Runyon, 70th Postmaster General

"The EVA Challenge is mandatory reading for any management in any business enterprise. Stern shows the way theory becomes practice and benefits not only management, but the shareholders and stakeholders alike. A must–read for management and shareholders."–Alfred G. Jackson, Global Head of Equity Research, Credit Suisse First Boston

"Joel Stern knows more about creating shareholder value than anyone in America. In The EVA Challenge you′ll learn how the master dumps rusty old accounting rules and hands managers a remarkable new yardstick for measuring success. Want to know the concept that made Roberto Goizueta great? Follow the Adam of EVA."–Shawn Tully, Senior Writer, Fortune

1. The Problem.

2. The Solution.

3. The Need for a Winning Strategy and Organization.

4. The Road Map to Value Creation.

5. The Changes Wrought by EVA.

6. Extendinge EVA to the Shop Floor.

7. Getting the Message Out: Training and Communications.

8. EVA and Acquisitions.

9. EVA Incentives.

10. How EVA Can Fail.

11. New Frontiers: Real Options and Forward–Looking EVA.

12. 25 Questions.

13. Recipe for Success.

Epilogue: EVA and the "New Economy," by Gregory V. Milano.

Acknowledgments.

Index.

JOEL M. STERN has been Managing Partner of Stern Stewart & Co. since its founding in 1982. He currently serves on the faculties of five graduate business schools all over the world. A widely published writer, he has been a financial policy columnist for the Sunday Times of London. A recognized authority on financial economics, corporate performance measurement, corporate valuation, and incentive compensation, Mr. Stern is a leading advocate of the concept of shareholder value.
JOHN S. SHIELY is President of Briggs & Stratton, one of the most successful implementers of EVA. He began his career as a tax accountant at Arthur Andersen & Co., then served as a lawyer, first with the Hughes Hubbard & Reed law firm, later at Allen–Bradley/Rockwell Automation, and finally joining Briggs & Stratton in 1986 as general counsel. He has received a bachelor of business administration in accounting from the University of Notre Dame, a JD from Marquette University Law School, and a Master of Management degree from Northwestern University.
IRWIN ROSS was retained by Joel Stern to assist in the writing of The EVA Challenge. He has written a number of books, including The Loneliest Campaign, The Image Merchants, and Shady Business. He is a former roving editor of Reader′s Digest and over the years has written for a variety of other magazines, including Fortune and Harper′s. Mr. Ross has also been a regular contributor to Stern Stewart′s EVAngelist.

"Buy it, read it on the plane and then start asking your top team some hard questions–before your shareholders do."( Financial Times)

"The authors develop a number of powerful ideas in the book. The core of The EVA Challenge is a clear, accessible and often quite readable account of what exactly EVA is; how to calculate it; what information it can give shareholders; and how to devise ways of linking remuneration to EVA. ...It is an excellent, practical guide for busy chief executives. Buy it, read it on the plane and then start asking your top team some hard questions – before your shareholders do." (Financial Times, 26th February 2001)