Henceforth, however, the burden of reporting will fall on our portfolio companies. There is a wealth of new legislation soon to enter into force, requiring substantially more reporting efforts. While some companies may experience this as an added layer of red tape, I’m inclined to state that it is red tape with a mission. A couple of quotes attributed to the late management guru Peter Drucker sums it up nicely:
“You can’t improve what you don’t measure.” And: “What gets measured gets managed:”
The idea is that the very job of producing and disclosing these numbers will spur companies to improve their performance along the reported dimensions. The insight embedded in these quotes has been confirmed time and again – and will be this time, too, I suspect.
