The years between 1989 and 1999 were arguably the best ten years in economic history. Productivity increased, market values rose and unemployment fell to record lows. On the surface, it looked like the increase in market values would continue forever and people began talking about the "death of strategy." All types of organizations with little strategy other than being the "Amazon of local diaper delivery" were winning venture capital and market capitalization in the millions.
When you look beneath the surface, however, the story is a little different. While more than two-thirds of the companies surveyed by Chris Zook in his book Profit From the Core had growth targets of more than nine percent; less than 10 percent actually achieved these growth targets. In fact, only 13 percent of the organizations surveyed by Zook achieved shareholder returns greater than the cost of capital.
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