Let’s take a different look at the same two companies from the previous post.  This chart illustrates the quarterly growth rate in sales over a five-year period for Company A and B.

Even though over a twenty year period they both achieved the same compound earnings growth, which business would you prefer to manage? How would you sleep at night? While I know nothing personally about these two companies, it appears there is something cyclical going on in Company B, but it isn’t in the same quarters each year.

The people in Company B may have total confidence in what’s going on, but as an investor or outsider, Company B looks to be pretty nerve-wracking.

My point? An organization that learns how to execute its strategy and deal with day-to-day surprises operates in a less stressful environment and, as you will see, increases its value. How you get there, indeed matters - BIG time!