The New CEO Corporate Leadership Manual. Strategic and Analytical Tools for Growth

  • ID: 1935832
  • Book
  • 344 Pages
  • John Wiley and Sons Ltd
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You finally have the keys to the boardroom Now, here is your key to success

Welcome to the corner office. From now on, every decision you make will either contribute to the success or failure of the company that cherry–picked you for its most coveted position. The stakes have never been higher. The New CEO Corporate Leadership Manual presents all the strategies, budgets, risk management techniques, financial analysis tools, and everything else you need to effectively and successfully operate a publicly held company.

Bestselling author and financial expert Steven Bragg provides you with the necessary strategies and tools to ensure that you flourish in your new executive role. Beginning with your first day, The New CEO Corporate Leadership Manual confronts your most pressing priorities, including how to develop risk, corporate, and IT strategies. You′ll also find proven tips on how to gain and maintain the competitive edge, formulate and implement effective strategies over the long term, build solid defenses against your competitors, and weigh the pros and cons of going public . . . or private again.

Loaded with rich case studies throughout, The New CEO Corporate Leadership Manual answers all of your chief executive questions, including:

  • How do I measure the business?

  • When should I use outsourcing?

  • How can a budget be used as a control mechanism?

  • What risk management policies and procedures should I have?

  • How do I evaluate the competitive environment?

  • What types of foreign exchange hedging strategies are available?

  • Which operating performance metrics are the most useful?

  • How do I evaluate acquisition targets?

  • Which reports should I use for cost reduction analysis?

  • What are the requirements for trading on a stock exchange?

Your vision, skill, and talent got you here. Secure your foothold on the top rung by making sure you have all the information you need to achieve even greater accomplishments with the proven methods found in The New CEO Corporate Leadership Manual.

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Preface xi

CHAPTER 1 New CEO Activities 1

Immediate Priorities 1

Measure the Business 3

Get to Know the Company 5

Develop a Strategy 7

Create a Budget and Related Systems 9

Review the Management Team 10

Review Risks 11

Review Costs 13

Summary 15

PART I STRATEGY DEVELOPMENT 17

CHAPTER 2 General Corporate Strategy 19

Overview of General Corporate Strategy 19

Building a Strategy: General Concepts 23

Building a Strategy: Product Differentiation 26

Building a Strategy: Low Cost 29

Building a Strategy: Focus on a Niche 32

Building a Strategy: Impact of the Internet 34

Building a Strategy: Additional Comments 34

Strategy Testing 37

Summary 38

CHAPTER 3 Financial Strategy 39

Cash 39

Investments 41

Working Capital 42

Inventory Reduction Decision 45

Fixed Asset Lease versus Buy Decisions 46

Payables 47

Debt 49

Equity 52

Product Elimination Decisions 56

Step Cost Reductions 59

Temporary Labor Decisions 60

Divestiture Decisions 61

Summary 62

CHAPTER 4 Tax Strategy 65

Accumulated Earnings Tax 66

Cash Method of Accounting 67

Inventory Valuation 68

Mergers and Acquisitions 68

Net Operating Loss Carry forwards 69

Nexus 69

S Corporation 70

Sales and Use Taxes 71

Transfer Pricing 72

Unemployment Taxes 75

Summary 76

CHAPTER 5 Information Technology Strategy 77

Reasons for Devising an Information Technology Strategy 77

Developing the Information Technology Strategy 78

Technical Strategies 81

Specific Applications 82

Summary 85

CHAPTER 6 Outsourcing Strategy 87

Overview of Outsourcing 87

Outsourcing Risks 92

Initiating Outsourcing 94

Companies that Take Over Outsourced Functions 94

Summary 97

PART II THE BUDGET 99

CHAPTER 7 Budgeting Process 101

System of Interlocking Budgets 101

Sample Budget 109

Flex Budget 127

Budgetary Control Systems 127

Summary 129

CHAPTER 8 Capital Budgeting 131

Hurdle Rate 131

Payback Period 132

Net Present Value 134

Internal Rate of Return 136

Throughput–Based Capital Budgeting 137

Problems with the Capital Budget Approval Process 140

Cash Flow Modeling Issues 141

Funding Decisions for Research and Development Projects 142

Postcompletion Project Analysis 143

Summary 145

PART III RISK MANAGEMENT 147

CHAPTER 9 Risk Management: General Concepts 149

Risk Management Policies 149

Risk Management Planning 150

Manager of Risk Management 152

Risk Management Procedures 153

Types of Business Insurance 155

Types of Insurance Companies 157

Evaluating the Health of an Insurance Carrier 158

Annual Risk Management Report 159

Summary 160

CHAPTER 10 Risk Management: Foreign Exchange 163

Foreign Exchange Quote Terminology 163

Nature of Foreign Exchange Risk 164

Data Collection for Foreign Exchange Risk Management 165

Foreign Exchange Hedging Strategies 165

Summary 176

PART IV FINANCIAL ANALYSIS 179

CHAPTER 11 Performance Measurements 181

Asset Utilization Measurements 181

Operating Performance Measurements 186

Cash Flow Measurements 190

Liquidity Measurements 193

Solvency Measurements 197

Return on Investment Measurements 199

Market Performance Measurements 204

Summary 206

CHAPTER 12 Cost Reduction Analysis 207

Types of Reports Used for Cost Reduction Analysis 207

Spend Analysis Overview 211

Spend Database 211

Supplier Consolidation Analysis 212

Parts Consolidation Analysis 213

Maintenance, Repair, and Operations Item Analysis 213

Spend Compliance 213

Spend Analysis Reports 214

Workforce Reduction Analysis 217

Workforce Reduction Issues 217

Workforce Reduction Alternatives 221

5S Analysis 223

Error Quantification 223

Fixed Cost Analysis 224

Ishikawa Diagrams 224

Value Stream Mapping 225

Waste Analysis 226

Summary 227

CHAPTER 13 Mergers and Acquisitions 229

Evaluating Acquisition Targets 229

Complexity Analysis 245

Valuing an Acquisition Target 246

Types of Acquisitions 260

Summary 266

PART V THE PUBLIC COMPANY 269

CHAPTER 14 Initial Public Offering 271

Reasons to Go Public 271

Reasons Not to Go Public 272

Cost of an IPO 274

Preparing for the IPO 274

Finding an Underwriter 277

Registering for and Completing the IPO 280

Alternatives for Selling Securities 282

Trading on an Exchange 284

American Stock Exchange 285

Overview of the Nasdaq 287

New York Stock Exchange 289

Comparing the Stock Exchanges 291

Over–the–Counter Stocks 292

Summary 293

CHAPTER 15 Investment Community 295

Analyst s Perspective 295

Finding the Right Analyst 297

Sell Side: Analysts 297

Negative Analyst Report 299

Sell Side: Brokers 300

Sell Side: Investment Bankers 301

Sell Side: Investor Relations Specialists 302

Buy Side: Types of Investors 302

Buy Side: Institutional Investors 303

Buy Side: Individual Investors 304

Buy Side: Presentations to Investors 306

Summary 307

CHAPTER 16 Public Company Activities 309

Investor Conference Call 309

Road Show 311

Concept of Guidance 315

Form of Guidance Issued 316

Frequency and Timing of Guidance 318

Aggressiveness of Guidance 319

How Short Sellers Operate 320

How to Handle Short Sellers 321

Measuring Short–Seller Activity 322

Summary 323

CHAPTER 17 Taking a Company Private 325

Going–Private Transaction 325

Rule 13e–3 325

300–Shareholder Limit 326

Form 15 327

Summary 327

Appendix New CEO Checklist 329

About the Author 337

Index 339

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Editorial Reviews

From the Inside Flap
Congratulations! You've just accepted the pinnacle position of Chief Executive Officer. Now comes the hard part—becoming a successful CEO. There's no room for error and no time for on-the-job training. The New CEO Corporate Leadership Manual provides the recently appointed CEO with the tools, strategies, and techniques needed to make the right decisions every time, from day one and well into the future.

Compiled by Steven Bragg—prolific author and esteemed financial guru—this "bible" for the newly minted CEO provides a bonanza of vital information about the financial systems essential to operate a modern corporation, with particular emphasis on funds management, and dealing with investors. Bragg helps you hit the ground running during your first few months on the job by helping you tackle your immediate priorities, including developing measurement systems and reviewing the team, as well as putting out potentially catastrophic fires, such as finding out whether your company is in any financial or legal difficulty.

The New CEO Corporate Leadership Manual also addresses areas vital to the CEO, including risk assessment, developing high-level finance, taxation, IT, and outsourcing strategies, capital budgets, risk management, performance metrics, and going public.

From the Back Cover
You finally have the keys to the boardroom—Now, here is your key to success
Welcome to the corner office. From now on, every decision you make will either contribute to the success—or failure—of the company that cherry-picked you for its most coveted position. The stakes have never been higher. The New CEO Corporate Leadership Manual presents all the strategies, budgets, risk management techniques, financial analysis tools, and everything else you need to effectively and successfully operate a publicly held company.

Bestselling author and financial expert Steven Bragg provides you with the necessary strategies and tools to ensure that you flourish in your new executive role. Beginning with your first day, The New CEO Corporate Leadership Manual confronts your most pressing priorities, including how to develop risk, corporate, and IT strategies. You'll also find proven tips on how to gain and maintain the competitive edge, formulate and implement effective strategies over the long term, build solid defenses against your competitors, and weigh the pros and cons of going public . . . or private again.
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STEVEN M. BRAGG, CPA, has been the chief financial officer or controller of four companies, as well as a consulting manager at Ernst & Young and auditor at Deloitte. He is the author of over thirty books primarily targeted toward corporate financial leaders (controllers, treasurers, and CFOs) and their needs. Bragg received a master′s degree in finance from Bentley College, an MBA from Babson College, and a bachelor′s degree in economics from the University of Maine.
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