When Vanguard founder John Bogle died last week, industry commentators were quick to point to the profound influence he had on the mutual fund industry. Realizing that most fund managers cannot outperform broad market trends over time, Bogle popularized index funds, which essentially track the market’s ups and downs. That observation led to a catalytic change in the industry. But it may not have been his most inspired insight. As the New York Times points out, “Vanguard’s advantage came from the unusual corporate structure that Mr. Bogle adopted.”
Is Your Company’s Strategy Aligned with Your Ownership Model?
When the two work in concert, they can create a powerful advantage.
January 25, 2019
Summary.
How companies are owned is an often-overlooked factor in their success (or failure). A firm’s ownership model significantly influences what it’s good at, where it struggles, which opportunities it can pursue, and what it is vulnerable to. In this article, the authors explain the differences between the public, private, and hybrid models of ownership, along with the strengths and weaknesses of each. For business leaders, they say, it is imperative to align the company’s strategy with its ownership model. Doing so can be a valuable source of competitive advantage.