Six Disciplines

MARCH 15, 2011

over the 10 years ending in 2008 and earn back their cost of capital. As reported in the Harvard Business Review's Daily Stat , the consulting group Bain's updated global database of Sustained Value Creators found only 12% of companies worldwide managed to grow profits and revenues more than 5.5%

Cost of Capital 101

Cost of Capital McKinsey Globalization Consultative 101

Harvard Business Review

APRIL 5, 2017

Repaying such profits to shareholders through share repurchases is better than misinvesting that cash to diversify into unrelated businesses in which management has no expertise or overinvesting in projects that may not return cost of capital. As I said earlier, measuring a company’s short-term orientation is incredibly tricky.

EPS 8

EPS Metrics Depreciation Short-term 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

MAY 14, 2013

In Europe, the emissions-reduction targets were set prior to the 2008 financial crisis, which as we all know presaged a deep recession and a eurozone debt crisis. Share prices for European utilities and industrial companies have fallen too, threatening a wave of credit downgrades and increasing companies'' cost of capital.

Price 8

Price Energy Politics Marketing 8

Harvard Business Review

OCTOBER 21, 2016

During the 2008 recession, companies committed to sustainability practices achieved “above average” performance in the financial markets during the 2008 recession, translating into an average of $650 million in incremental market capitalization per company.

Supply Chain 8

Supply Chain Price Loyalty Efficiency 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

Harvard Business Review

FEBRUARY 7, 2017

During the 2008–2009 global financial crisis, they not only saw smaller declines in revenue and earnings but also continued to increase investments in research and development while others cut back. Consider, for example, Company A, which earns $100 of after-tax operating profit, has an 8% cost of capital and $800 of invested capital.

Long-term 8

Long-term EPS Short-term Management 8