quirements, as well as contingency plans for dealing with those shis if and when they occur
TSR-based operational targets and metrics that the company can drive down into the organization and embed in its incentive and compensation system (in effect, every business unit should have its own version of the TSR sustainability matrix)
A robust framework for shiing planning, budgeting, and capital allocation away from an annual cycle based on incremental improvements to historical per- formance and toward a set of criteria based on contri- bution to long-term TSR
Analyzing a company’s performance in terms of its abil- ity to deliver sustainable value creation is what investors do every day. Armed with the right tools, there is no reason why executives can’t develop an even better- informed perspective, given their intimate knowledge of the company’s plans and of industry trends. When they do, they can stay one step ahead of investor expectations and consistently generate superior shareholder value for many years to come.