Create More Value

Greg Milano discusses how annual incentives can drive better corporate behavior. He highlights common flaws in traditional incentive plans, such as incomplete metrics, the time-consuming and counterproductive negotiation and gaming of targets, and ineffective payout structures. Milano advocates for a value-management approach using a cash-based measure of economic profit that reliably reflects shareholder value creation. Milano’s preferred economic profit measure, Residual Cash Earnings (RCE), was developed to encourage profitable investment, reduce financial manipulation, and simplify incentive structures by measuring against the prior year rather than the plan. Complete measures like RCE not only restore sanity to planning and target-setting—they unite the team on a shared goal of value creation by helping management pinpoint its most promising strategy, capital allocation, and portfolio optimization opportunities, even across complex businesses. Indeed, research shows companies that use economic profit measures like RCE outperform the market by 7% annually, as they are able to target and sustain TSR improvement.  

Dave Peacock, CEO of Advantage Solutions, discusses the bold transformation he is leading to create more value at Advantage—turning a fragmented business into a focused provider of solutions that improve the velocity of commerce, helping brands get the right products on the right shelves and helping retailers more efficiently convert shoppers to buyers. Facing structural changes and secular challenges, we discuss lessons learned in his three decades of experience, including his tenure as President of Anheuser-Busch during its acquisition by InBev and working with 3G Capital to drive efficiency while preserving top-line results with brand investment and pricing power. He also shares how his early education in journalism and economics helped shape his perspective as a leader in evaluating and communicating the commercial opportunity ahead. 

Dr. Alise Cortez, organizational psychologist and founder of Gusto Now!, explores how companies can instill meaning and purpose in their cultures to drive engagement, innovation, and profitability. Dr. Cortez shares practical strategies for measuring purpose, fostering a “culture of gusto,” and transforming businesses into “destination workplaces” that attract and retain top talent. Alise and our host Greg Milano highlight research showing the returns on purpose along with case studies on companies successfully embedding purpose into their operations. They also consider how generational shifts are making workplace purpose increasingly essential.

Dennis Kubaile, co-founder of Granulytix, joins Greg to discuss how their groundbreaking platform enables granular economic profit analysis across complex portfolios on an ongoing basis. From segments to customers, geographies, channels and SKUs, Granulytix has proven to be immensely useful to understand where value is being created—and to pinpoint the best investment and improvement opportunities in real time, which enables an agile approach to strategy and resource allocation. Dennis shares real-world examples of businesses that drove profit growth by leveraging granular profit to uncover hidden inefficiencies, reallocate resources, and change the underlying business model. Greg and Dennis also explore the growing role of AI and Granulytix’s new agentic AI-powered solution for financial and strategic analysis, GranulytixIQ, and the impact this will have on both consultants and companies making data-driven investment decisions. Prior to founding Granulytix, Dennis spent over 20 years in strategy consulting developing value-based strategies for clients like Caterpillar, Abbott, and Boeing.

Caterpillar Inc., the world’s leading construction equipment manufacturer, delivered over 2.5x the cumulative total shareholder return of the S&P 500 over the last eight years. In this episode, Caterpillar CFO Andrew Bonfield discusses how value-based management enables their dominant financial performance. At the heart of Caterpillar’s strategy is a focus on “profitable growth,” guided by a measure they call operating profit after capital charge (OPACC). OPACC is an economic profit measure that allows Caterpillar to target operating improvements and strategically allocate resources across its complex portfolio, focusing on high-return opportunities while restructuring or exiting underperforming areas. For Caterpillar, growth and innovation are essential; a disciplined, fact-based approach helps them identify their very best investment and improvement prospects.

Our conversation with David Berkowitz, founder and CIO of Value Aligned Partners, covers investment strategies that focus on long-term value creators. Greg and David discuss the inefficiencies of the “earnings game,” aligning management incentives with shareholder interests, and how to identify high-quality companies with sustainable competitive advantages. Berkowitz outlines three investment strategies: ownership companies with strong incentive structures, “cannibal” companies with high share buybacks, and dominant monopolistic or oligopolistic firms. He also compares public and private equity investment approaches, emphasizing behavioral economics and value-focused operating systems. In addition to being an investor, David conducts corporate finance education and value-based management training for corporate professionals and board members.

Garrett Delph, founder and CEO of Clarity Ops LLC, shares his journey from leaving corporate America to scaling multiple companies to over $50M in revenue. He introduces his operational strategies, including the FAST solution system, the Quad Core Management Framework, and P3 (People, Process, and Performance). Garrett explains how these frameworks optimize business operations by addressing inefficiencies, emphasizing leadership load balancing, and improving processes to enhance organizational culture and performance. He also discusses the unique perspective an outside advisor can bring and the value of external insights in overcoming business challenges.

James Pappas discusses his journey from the family restaurant business to consumer and retail finance roles at Goldman Sachs and Bank of America to founding an activist investor firm. However, his firm, JCP Investment Management, differs from most activists in a few ways. He differentiates his approach as “growth activism,” which focuses on sustainable growth opportunities over more typical activist approaches like cost-cutting or corporate break-ups. Crucially, Pappas stresses the importance of customer-centric strategy, clarity on objectives, and optimizing capital structures. He embraces a collaborative approach aimed at long-term guidance and getting the right people in place to foster long-term success. James has sat on nine public company boards, including Jamba Juice, United Natural Foods, US Geothermal and The Pantry, by way of example. Pappas explains how his entrepreneurial background in finance and in the family restaurant business shaped his expertise in operations and capital management. 

Former Univar CFO and veteran of the chemical industry, Carl Lukach, discusses CFO strategy and financial leadership best practices. Carl emphasizes the importance of a “playbook to win”—a structured approach to strategy inspired by Roger Martin's Playing to Win. He also covers the CFO’s role in competitive strategy, highlights the importance of building a high-performance team, and advocates for collaboration and breaking down silos within finance functions. Carl is currently an advisory director at CVC Capital Partners, a senior advisor at TorQuest Partners, and a board member at Xypex Chemical Corporation. He was formerly CFO of Univar solutions and a 30-year veteran of Dupont in various finance and commercial leadership roles. In 2019 he was FEI Chicago’s public company CFO of the year.

Brian Tomlinson of EY argues that sustainability is a long-run driver of shareholder value. Brian and our host, Greg Milano, explore how boards and managements can measure, reward, and communicate their sustainable business practices. While noting that contemporary ESG metrics can pose certain challenges, the discussion underscores the growing importance of these financial disclosures in attracting committed long-term shareholders. Brian also covers global ESG reporting developments, including the EU’s Green Deal and strict regulatory standards—and contrasts this unified approach with the U.S.’s fragmented regulatory landscape. Brian is Managing Director of ESG at EY and was formerly Director of Research for Chief Executive for Corporate Purpose’s CEO Investor Forum.