ABSTRACT
In order to improve business performance, we have to understand the purpose of a business to have a common perspective. While there are several explanations for the purpose of a business or corporation, we take a fairly simple approach in this book. We do not cover certain important factors, such as people development, contribution to the society, or environmental impact. These topics are beyond the scope of this book. As mentioned in Chapter 1, the purpose of this book is to develop a comprehensive and well-aligned business transformation plan. For our illustration, based on the expectations from the shareholders, the purpose of a business is to achieve profitable growth with the highest return on capital. There are several books and thought leaders who have discussed the importance of revenue growth and return on invested capital; this book focuses on explaining the “how” rather than the “why” of improving earnings growth and return on invested capital. These two metrics make the biggest impact on a company’s value over the long term. Business leaders need to ensure that every action is driving improvement in these two metrics to provide the best results for the shareholders.
