What’s in a name? In the vernacular of equity markets, the words “growth” and “value” convey the specific characteristics of stock categories that are deeply embedded in the investment strategies of investors and fund managers. Leading US market indexes, such as the S&P 500, the Russell 1000, and the the Dow Jones Wilshire 2500, all divide themselves into growth- and value-style indexes. Academics also use these categories as shorthand, arguing at length over which investment approach creates more value—a value strategy or a growth strategy. These names explicitly convey the expectation that growth stocks will have higher revenue growth prospects than value stocks.¹ And investors, even large institutional ones, often make investment decisions based largely on those expectations.²

It’s not illogical that executives would often draw from this reality an assumption that having the label growth or value attached to a company’s shares can actually drive prices up or push them lower. In our experience, many executives have expended considerable effort plotting to attract more growth investors, believing that an influx of growth investors leads to higher valuations of a stock. Some executives even turn this assumption into a rationale for using a high share price to defend...