Trust your gut instincts—but only when four tests have been met.

We estimate from our research that, far from being worth more than the sum of their parts, well over half the world's multibusiness companies are actually worth less than this. They are value destroyers. The lack of clear corporate-level strategies shows up in the portfolios of unhappy bedfellows, well-intentioned but damaging corporate initiatives, and strings of acquisitions that create more wealth for bankers, lawyers and advisers than for closer stakeholders in the company. The cost of this gap in corporate strategy is the suppression of billions of dollars of value, which is sporadically released by MBOs, unusually powerful shareholders, or the threat of enforced break-up. In contrast, some multibusiness companies create significant value from sound corporate-level strategies.

Our approach to corporate-level strategy, based on 10 years of research with multibusiness companies in Europe, North America, and Asia, adopts a bottom-up view of the corporation, emphasizes the danger of value destruction and the necessity of "fit" between businesses and their parent company, and places at center stage the concept of "parenting advantage."

Editor's Note: offers a nice illustration of the Ashridge "Fit" Matrix

Acquisitions are all the rage, but when it comes to creating value, big is not always better. What matters is how a company's pieces work together.

Editor's Note: this article offers one of the most controversial and counter-intuitive prescriptions I have ever read (up there with the "IT adds no value" argument). Specifically, it says that corporate centers typically subtract value in multi-business entities rather than adding value. Read this article...