Tapping the Power of Diversity to Raise Valuations
New research points to inefficiency in allocating capital among businesses as a major driver of diversified companies’ chronic undervaluation—the so-called conglomerate discount. Diversified companies can shrink the discount, or even turn it into a premium, through a role-based approach to managing businesses and the capital flows among them.
Leaders at today’s top-performing organizations see opportunities everywhere, pursue them relentlessly, and never think that their job is done. For these leaders, there is always more commercial space to be conquered.