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Process Not Personality Builds Durable Stock Value (Part 2)

18 February 2008 - Features - Editor

Process Not Personality Builds Durable Stock Value (Part 1)

Reading Between Stock News Lines

Stock information is a minefield! Executives provide news of significant external developments, but how can the stock market know about what happens in the engine rooms of corporations? We have compiled the following list of signs that a company is process driven. You are welcome to challenge our notions, and add concepts of organization from your own business experiences.

1. The Chief Executive Officer is not the Chair Person of the Board. There is a clear distinction between operations and setting strategic direction.
2. All key personnel have specific terms, and extensions in office are rare, if they take place at all. Transition is smooth, on time, and rehearsed in phases.
3. The public face of the company is not dominated by an individual. It is apparent that a team is in place, and that everyone functions within systems of checks and balances.
4. The company has strong traditions of Quality Assurance, preferably with International Standards Organization (ISO) certification by reputed auditors.
5. The company has a demonstrated track record of rapid and transparent responses to adverse events and emergencies, such as product recalls, serious litigation, and to natural calamities as well.
6. The company is committed to diversity and equality values, and has fair and universal employee access to redress of grievances, allegations of discrimination, and abuse.
7. The company invests adequately in recruitment, training, and other human resource development activities.
8. Deviations from earnings guidance are explained in manners that are broadly perceived as being honest and adequate.

Our list is intentionally not comprehensive. We trust that you will join in the effort to help stock investors everywhere ferret out stocks that are protected by processes, from others that are overly dependant on individuals. We have decided to take a close look at Singapore Airlines to try and understand how this airline has managed to stand apart from its peers in terms of superlative cabin service. Please bookmark this web site to take part in our forthcoming discussion entitled “What the Making of a Singapore Girl Can Tell the Stock Market”. We expect to publish this shortly on these web pages. You can also join our forum and ask for an alert when our article is ready. We look forward to a continuing dialog with you on how the Process element of a Marketing Mix can guide us to top stock picks. Welcome on board!

 


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