Insights on Value Creation

Practical thinking, perspective, and guidance to support value creation across GTM, RTM, Marketing, Sales, and the wider business.

The Transparency Gap Holding Value Creation Back

Value creation is rarely absent because people do not care. Rather, it is absent because the people making daily business management decisions do not have enough context to understand the consequences of those decisions.

By value creation, I mean improving profit quality, cash generation, and capital efficiency in ways that increase what the business is ultimately worth.

I have seen this play out repeatedly across businesses of different sizes and stages; budget holders are given responsibility, targets agreed, funds allocated and teams expected to execute.

Most budget holders take that responsibility seriously. They are trusted with funds, measured on delivery, and expected to use what has been allocated to achieve the objectives set for them.

What tends to be missing is a shared understanding of how those decisions affect the business beyond the function making them.

The problem is not misuse of budget. If accountability stops at delivery and spend, people will optimise for delivery and spend. That is rational behaviour.

What rarely accompanies that responsibility is visibility into how spending decisions affect cash flow, working capital, or the wider financial position of the business. Those considerations often sit firmly with finance teams and the CEO and are treated as someone else’s domain.

As a result, budget utilisation becomes a given. The question becomes how well the budget was spent, not whether it should have been spent in the first place given the broader financial picture.

Marketing as a case in point

Marketing is one of the largest discretionary areas of spend in a scaling business. Across industries and growth stages, marketing investment can range from low single digits to well over 30 percent of revenue.

What separates performance from waste is not the percentage itself, but how effectively that spend strengthens profit, accelerates cash generation, and contributes to enterprise value.

When spend cannot be reasonably connected to these outcomes over an appropriate time horizon, it begins to behave like overhead rather than investment. That is when familiar problems start to appear:

• Spend increases while new business stalls

• Revenue grows but profit deteriorates

• Teams remain busy but pull in different directions

• Metrics multiply while meaning disappears

• Boards hear the numbers but begin to question the growth story

  
  

I recall one organisation where marketing spend was trending towards 32 percent of revenue, and at the same time, the business was loss-making for the first eight months into the financial year. For the Marketing team, there was an unhealthy focus on ROAS as the primary measure of Marketing success and its impact on top line growth, while profitability and cash generation did not feature anywhere. ROAS tells you whether advertising generated revenue. It says very little about whether that revenue was profitable, cash generative, or value creating. In practice, the most useful shift I’ve seen is moving conversations toward contribution after marketing and how quickly that contribution turns into cash.

Most of the budget was being spent on digital paid media campaigns, which was a red flag. Given the law of diminishing returns, alongside prior experience in similar environments, it was clear that waste would be occurring - regardless of how quickly new datasets were assembled to explain collective or individual channel performance.

Without delay. the decision to reset marketing spend to a more sensible level, around 15 percent in that context, removed losses within three months. Revenue held firm. The work did not stop there. Cost of acquisition and conversion efficiency became more important markers of success. 

Even if revenue had dipped, improving earnings quality and reducing the cost to convert would have mattered more for the long-term health of the business. This was not a universal prescription, but a correction grounded in unit economics, marginal returns, and the company’s cash position at that point in time.

Where value creation quietly breaks down

In theory, leadership understands the value creation agenda. Boards talk about margin, cash generation, capital efficiency, and resilience. In practice, those concepts often remain concentrated at the top.

Marketing teams focus on demand generation and acquisition.

Sales teams focus on revenue and pipeline.

Product teams focus on roadmap delivery and growth contribution.

These are all valid priorities. What is missing is a consistent line of sight between those activities and their financial ‘value creation’ impact on the business.

I have rarely heard a marketing or sales discussion pause to consider whether a decision will improve cash flow. Not because people are careless, but because they are rarely given the information or expectation to think that way.

Cash flow sits too far away from day-to-day decisions

Cash flow is often treated as the responsibility of the CFO and finance controllers. It is monitored, forecast, managed, and reported centrally.

What it is not, in many businesses, is something that features in daily decision making outside finance.

That separation creates a gap. Decisions that make sense locally can create pressure elsewhere. Growth initiatives can consume cash faster than anticipated. Payment terms, discounting behaviour, channel mix, and timing decisions quietly affect liquidity.

None of this is visible to teams unless leaders choose to make it visible. Ask a budget owning marketer how their spend choices influence free cash flow and you’re likely to draw a blank stare. 

Once teams understand why this matters, budget and spending decisions tend to become more supportive of the business.

I have seen businesses where top-line growth accelerated at the same time as pressure on available cash intensified. In one instance, yoy revenue was up but target quotas were not being hit. Beneath the surface, the cash profile was deteriorating. Marketing spend was top heavy and working capital requirements expanded faster than expected.

To manage the shortfall, accounts payable were stretched as far as possible. Suppliers absorbed the pressure, payment days lengthened, and short-term liquidity became a constant concern.

None of the individual decisions to manage the position were irrational. Each made sense in isolation. The issue was that the cumulative impact on cash was not visible to the teams driving growth. The underlying issue wasn’t poor judgement, but that the teams had never been given visibility into how those choices affected cash and earnings quality.

Why operationalising value creation requires openness

If value creation is expected to show up consistently, it needs to be understood consistently.

That requires a degree of openness many leaders are uneasy with.

“Open-book” management does not mean exposing every financial detail or turning everyone into a finance expert. It means sharing enough information for people to understand how their decisions connect to the financial outcomes the business cares about. “The Great Game of Business” by Jack Stack is a fantastic reference to appreciate how this approach can work.

When teams can see how spend affects cash, understand how growth draws on working capital, and see how margin improvement creates reinvestment capacity, decision quality improves.

What changes when context is shared

In businesses where financial context is made more visible, behaviour shifts quickly.

Initiatives are sequenced with more intent. Budgeting conversations move from “can we do this?” to “should we do this now or wait?” Value creation stops being an abstract objective and starts to influence daily judgement.

This does not require complex models. It requires leaders to trust their teams with information and to expect a higher standard of decision making in return.

The leadership choice at the heart of value creation

Operationalising value creation is less about frameworks - which help build habit - and more about mindset.

Leaders must decide whether value creation is something they manage centrally, or something they enable across the organisation. It doesn’t mean you have to share the cash flow statement, the balance sheet and income statement with the entire business in one go. Rather, it should be about educating teams on the relationships between them and how their decisions influence the outcomes of each (as applicable). That mindset shift ultimately comes down to one question: how much financial context are leaders willing to share?

If value creation and related financial levers remain centralised, decisions will continue to be made in silos, with finance correcting course after the fact. If it is enabled throughout the business, transparency becomes a tool rather than a risk, and value creation becomes part of how the business runs.

A closing observation

Most people want to do the right thing for the business. They simply need the context to understand what “right” looks like.

Until budget holders understand how their decisions affect cash flow and financial resilience, value creation will remain something discussed in boardrooms and reviewed in hindsight.

As capital becomes scarcer and scrutiny increases, value can no longer be manufactured through structure alone. It must be created through how a business sells, prices, delivers, and converts cash.

Therefore, surely value creation should not be just deployed at an acquisition event. It should be the operating system of a successful business - and make you more attractive to investors should you come to sell.