Harvard Business Review

JULY 25, 2017

Some companies establish a threshold for MROI that takes into account its risk tolerance and cost of capital, below which they are hesitant to make investments. And if you end up with a negative ROI, the project is harder to justify on financial terms. What Are the Challenges of Calculating MROI? .”

ROI 8

ROI Marketing Marketing Mix Cost of Capital 8

Harvard Business Review

FEBRUARY 7, 2017

Companies deliver superior results when executives manage for long-term value creation and resist pressure from analysts and investors to focus excessively on meeting Wall Street’s quarterly earnings expectations. This has long seemed intuitively true to us. and historic lows in new capital investment.

Long-term 8

Long-term EPS Short-term Management 8

Harvard Business Review

SEPTEMBER 8, 2011

Banks aren't looking for cheaper capital; they are looking for lower risk. Cost of capital is passed on to the businesses borrowing the money so it is not a huge factor for lenders.) Thus, the government must find a way to reduce the risk for the banks while reducing the cost of capital for the businesses.

GDP 12

GDP Planning Cost of Capital Banking 12

Harvard Business Review

OCTOBER 3, 2011

Critics imply that managing for shareholder value is all about maximizing the short-term stock price. While some executives allow that they should not manage to increase the short-term stock price, they remain reluctant to embrace the concept of managing for shareholder value. In the very long haul, earnings and cash flow converge.

Short-term 12

Short-term Long-term Price CEO 12

Harvard Business Review

JUNE 27, 2012

real revenue and profit growth and earning their cost of capital has steadily declined. Although some lost their way temporarily, all are characterized over the long term by their simple focus on their historic core, which allowed them to continuously grow their profit pools, and tap into new ones.

Creativity 14

Creativity Long-term Kotter Cost of Capital 14

Harvard Business Review

OCTOBER 10, 2017

Even if executives try to prioritize it, innovation often gets crowded out by more “urgent” short-term pressures. For any business to succeed over the long term, it must earn a return that exceeds its cost of capital. That’s why successful innovators prepare for irrelevance long in advance.

Innovation 8

Innovation P&L ROI Long-term 8

Harvard Business Review

MARCH 31, 2015

As every company is becoming a digital company, every leader (who is also becoming a digital leader) is realizing that breaches may negatively affect profitability and the company’s long-term ability to do business. By now, it has long surpassed its one-year maximum.

Price 8

Price Long-term Short-term Banking 8

Harvard Business Review

NOVEMBER 25, 2013

Just 36 percent of CMOs, for example, have quantitatively proven the short-term impact of marketing spend, according to the 2013 CMO Survey (and for demonstrating long-term impact, that figure drops to 32 percent). Help CFOs focus on the long term. Why is this so challenging?

CFO 8

CFO Short-term Long-term Benchmarking 8

Harvard Business Review

MARCH 28, 2016

This was the era of the company man, where employees exchanged long-term loyalty for a livable wage and a pension plan. And given the pace of growth, capital was always in demand. Outside funds bring with them a pressure to achieve short-term results that trade-off with value creation.

Long-term 8

Long-term Short-term Reputation Incentives 8

Harvard Business Review

MAY 14, 2013

Here''s a very strange thing: Europe''s decades-long effort to reduce carbon emissions has been thrown into a shambles because utilities and manufacturers are exceeding their carbon-reduction targets. Markets fundamentally don''t work when they are "long" — that is, flooded with things no one wants. That''s right. Exceeding them.

Price 8

Price Energy Politics Incentives 8

Harvard Business Review

APRIL 26, 2017

Banks’ cost of capital is typically 50 basis points or less. These low-cost and reliable sources of funds are from taxpayer-insured deposits and the Federal Reserve’s discount window. ” Can banks out-compete the disruptors?

Banking 12

Banking Credit Scoring Stage-Gate Competitive Advantage 12

Harvard Business Review

OCTOBER 21, 2016

Unlike traditional forms of business risk, social and environmental risks manifest themselves over a longer term, often affect the business on many dimensions, and are largely outside the organization’s control.

Supply Chain 8

Supply Chain Price Loyalty Efficiency 8

Harvard Business Review

DECEMBER 13, 2017

Some argue that profits are stagnant because of short-termism—that decades of focusing on current profits over long-run innovativeness has resulted, now, in companies that are hollowed out. What’s behind the disconnect? In contrast, current profits penalize R&D, because accounting rules require R&D to be expensed.

Short-term 8

Short-term Decentralization Company Trends 8

Harvard Business Review

APRIL 2, 2014

In the long-version explanation of the prizes published by the Nobel committee last fall, Campbell was cited more often than anybody else, apart from the three winners. 2 is this distinction between short-term vs. long-term predictability. That was another discovery of the 1980s that was inconsistent with the paradigm.

CAPM 8

CAPM Discount Price Finance 8

Strategy Driven

SEPTEMBER 9, 2011

The logic of NPV is to project cash flows into the future and then discount those flows back into today’s dollars at a given cost of capital. Companies have long struggled to generate sustained profitable growth – and few have succeeded. If it is positive, it’s thumbs up, if it’s negative, it’s thumbs down.

Innovation 50

Innovation NPV Business Model Constraint 50