Creating Value by Thinking Like an Investor

On McKinsey's "Inside the Strategy Room" podcast, senior partner Ryan Davis and associate partner Jacob Marcus raise a pressing issue: creating long-term value is the foundation of strong companies and a healthy economy, yet many executives struggle to get investors to recognize a well-thought-out, well-executed strategy. In other words, building a good strategy isn't enough — selling it to the market matters just as much.

As a first step toward solving this, the two suggest anticipating how investors will react to a company's decisions. Before making any strategic move — an investment, a restructuring, or an expansion into a new market — leaders should picture how that step will look through investors' eyes. This approach lets a company act ahead of the market's reaction instead of scrambling to respond to it afterward.

The second approach is identifying opportunities to beat the market's expectations. Investors typically form their own forecasts of a company's future performance, and when a company outperforms those forecasts, it builds trust significantly. That means executives need not only a well-crafted strategy, but also a clear sense of where they can deliver more than what's expected.

The third and final principle is embedding an investor's perspective deeply into how the company makes its core business decisions. This isn't just about polishing financial reports — it means turning that perspective into a standing part of the organization's strategic thinking. According to the authors, this approach helps a company earn not just short-term confidence but long-term stability and resilience.

In the end, the podcast offers executives a practical roadmap for aligning strategy with what investors expect. It's the art of not just building a strong strategy, but communicating it to the market in a way that is clear and credible.