Harvard Business Review

AUGUST 20, 2018

companies for an eight-year period (2005–2013). This is ironic, of course, because studies show the majority of acquisitions don’t earn the cost of capital for the buyer. Total shareholder return is what the activist hedge funds claim to enhance. But for the universe of U.S. while for the S&P500 it was 13.5%

Hedge 8

Hedge TSR Company Sample 8

Harvard Business Review

SEPTEMBER 4, 2017

.” There is a virtuous cycle between productivity and people: Higher levels of productivity allow society to reinvest in human capital (most obviously, though not exclusively, via higher wages), and smart investments result in higher labor productivity. Unfortunately, this virtuous cycle appears to be broken. And wages are stagnant.

Human Capital 14

Human Capital Kaizen Agility Energy 14

Harvard Business Review

AUGUST 27, 2015

Companies in the top one-fifth of profitability earn, in aggregate, about 70 times more economic profit (accounting profit less cost of capital) than those in the middle three-fifths combined, according to McKinsey’s database of 3,000 large, publicly listed, nonfinancial U.S. Consider what’s happening among corporations.

ROIC 8

ROIC McKinsey GDP Company 8

Terry Starbucker

AUGUST 29, 2010

And change it did, because the new CEO had a vision that went beyond product, and costs, and overhead, and costs of capital. It was about passion. And about people who have it. Thirteen years later, the stock price is now above $240, and it has a market cap bigger than Microsoft. That company is Apple.

Technology 282

Technology Price Video Cost of Capital 282

Harvard Business Review

OCTOBER 21, 2016

In 2005, they launched a U.S. Wal-Mart, for example, aimed to double fleet efficiency between 2005 and 2015 through better routing, truck loading, driver training, and advanced technologies. By the end of 2014, they had improved fuel efficiency approximately 87% compared to the 2005 baseline.

Supply Chain 8

Supply Chain Price Loyalty Efficiency 8

Harvard Business Review

MARCH 28, 2016

A study of leading public company CFOs published in the Journal of Accounting and Economics (2005), found that 78% of these CFOs would be willing to make decisions that destroy value in order to achieve their quarterly earnings targets. 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

DECEMBER 13, 2017

Investors punish companies with a short-term orientation by applying higher discount rates to them, which increases the cost of capital for those companies. In contrast, companies with a long-term orientation are rewarded with a lower cost of capital, which allows them to afford more innovation—a virtuous cycle.

Short-term 8

Short-term Decentralization Company Trends 8