“The market demands higher returns.”  

You’ve heard it. Maybe you’ve said it. My journey in the C-suite spanned 30 years, and not once did the market come knocking on my door.  

But you know who did? Private equity firms with term sheets. Activist investors with 2% stakes and PowerPoint decks. But never the stock exchange or even the bank managers.   Driven by this realization, I embarked on a journey of thinking, researching, and digging deeper.   It led me to a crucial question: where does this phrase actually come from? And who benefits when we believe it?  

What Happened to Me (the background part) 

I was leading an exceptionally healthy and profitable manufacturing company. It had taken us five years, but we had attained superstar status in the industry: amazing margins, a stable workforce, and bonuses for everyone. We had cash reserves for all kinds of rainy days and plans for new products that would pay off inside five years.   Then we were sold. In a leveraged buyout. (I was the lead on the acquired side.) The morning after the deal was sealed, I found myself unable to cover even the most basic expenses. Salaries. Rent. Supplier invoices. Customer returns.  

All our cash — present and future — went first to service someone else’s debt. The business needs came second. I was shocked to learn that the financing model was 95% debt.   

We cancelled everything. No more raises, no more bonuses. People were cut – including me. Not because the business was failing, but because the capital structure demanded it.   Ten years later, the company had ceased to exist.  

I was paid off handsomely – after spending another year implementing a flawed computer system for the new parent. And I kept in contact with a few of my favourite people. Morale crashed. Innovation died. The glue that kept it together came unstuck.  

Eventually, the barely functioning remains were gobbled up by another company. Only 10% of the people I had led remained.   And subconsciously, I vowed to eventually understand how that little tiny piece of my life fit into the big world of business.  

I’ve now done that 

My quest led me to spend three months researching, interviewing, and connecting the dots. The result? A three-part podcast series that delves into the complexities of market demands, a story too important for a single newsletter.   

I’ve titled the series ‘The Myths About the Market Demands.’
Episode 1 (aired last week): My full story. Where this really started (hint: not with Milton Friedman). What I wish I’d understood in that boardroom.
Episode 2 (airing this week): Who’s actually making demands and why. How this dynamic kills sustainability investments even when they’d be profitable.
Episode 3 (airing next week): My biggest regret as a CEO. How to recognize and resist this pressure. Fundamental strategies I’ve seen and used that have proven effective.   The episodes are all no longer than 15–25 minutes long. Whether you recall the 1980s or began your career in the 2000s, this will reframe how you perceive business pressure.  

How We Got Here 

If you started your career before 1985, you remember when 10% returns were considered excellent. Double your money in seven years—that was the standard.   Then corporate raiders figured out they could buy companies with borrowed money, make the company repay the debt, and pocket the difference.   To service that debt, companies had to generate cash immediately. Long-term investments? Gone. R&D? Cut. Workforce? Gutted.    In the 1990s, executive compensation shifted from primarily salary to primarily stock-based.   When 60% or more of your pay is equity, you stop thinking like a steward and start thinking like a day trader.   That’s the system we’ve inherited this decade.  

Who Actually Makes These Demands? 

When people say “the market demands higher returns,” I immediately ask which market?   Because — institutional investors — who own 60-80% of most public companies almost never make demands. They’re mostly passive.   The demands originate from activist investors holding stakes of 1-2%. Maybe three partners at a Private Equity firm with a 4-year fund lifecycle.   We mistake volume for consensus.  

What This Means for You 

If you’re still working: You know that feeling when you want to invest in something that’ll pay off in seven years, but you can’t articulate why it makes sense on a three-year timeline? It’s not because the investment is wrong. It’s because you’re trying to justify long-term thinking in a short-term language.   If you’re retired: You’ve seen this movie. You know what happens when companies optimize for the next quarter instead of the next generation. The businesses our grandchildren need—the ones that invest in people, innovation, and resilience—are being starved by this mythology.  

We CAN See This Differently

I can’t change what happened to my company. But I can help you see the pressure you’re under more clearly. Because once you know where it’s really coming from, you can make different choices.   The system is designed to achieve returns of 20%, 25%, and 30%. The only way to sustain those numbers is to strip assets and sacrifice long-term value.   You’ve probably felt this tension. Maybe you’ve had to make decisions you knew weren’t right for the long term.  

You weren’t wrong. The framework was. I’d love to hear if this resonates with your experience.