10 Reasons Why Every Manager Should take a Finance Course

Great Leadership By Dan

Caution: when employees feel like owners, no more wasting money on expensive furniture, management boondoggles, or projects with a poor net present value. We just finished a “ Finance and Accounting for the Non-Financial Manager ” program this week for a large client. The audience was mostly engineers – program and project managers, the ones in charge of designing and making complex stuff. It was 3.5

Why You Should Crowd-Source Your Toughest Investment Decisions

Harvard Business Review

Most companies – including the movie studios in Hollywood – over-rely on basic tools like discounted cash flow and net present value. How P&G Presents Data to Decision Makers. Only three or four out of every ten movies made in America breaks even or earns a profit.

A Simple Ritual for Harried Managers (and Popes)

Harvard Business Review

The Jesuit Constitutions didn't equip me to do present value calculations. Call to mind some crucial personal objective, or your deepest sense of purpose, or the values you stand for. Pope Francis and I have something common. He was a Jesuit seminarian; so was I.

Forget About That Cash Bonus

Harvard Business Review

While many might see this sort of gift giving as a sign of the boss's kindness and generosity, economists mostly see inefficiency : why can't Columbia just pay me a cash bonus rather than offering presents that collect dust?

How Marketers Can Avoid Big Data Blind Spots

Harvard Business Review

That’s because marketing has a big opportunity to drive above-market growth and demonstrate its value to the C-suite and the boardroom. That kind of value can turn plenty of heads in the C-suite. Without ongoing investment in the brand, the value of this base erodes over time and creates a stiff head wind for future sales. These estimates can then help determine the Net Present Value (NPV) of the long term effect of marketing in terms of future sales.

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How CMOs Can Get CFOs on Their Side

Harvard Business Review

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). CFOs are more interested in capital investment estimates, net present values, and a clear outline of the trade-offs of any investment. As a long-term asset of significant value, the brand should be part of those calculations.

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An Unexpected Lesson from Mandela: Why Context Matters

Harvard Business Review

I made what I thought was a brilliant presentation to senior bureaucrats and technologists. These were engineers and network planners; surely, they understood economics and net present value analysis. Yes, I was there at a true inflection point, armed with the finest analysis possible, elaborate layers of spreadsheets, and well-crafted presentations.

The (Not Very Deep) Meanings of the Dow's New Record

Harvard Business Review

There are three main ways of explaining stock prices: The first is basic economics — a share of stock is worth the present value of the future cash flows associated with it. Put another way, a company's stock-market value is a function of how much money investors think it will make in the coming months and years. A second way to think of stock prices is as a reflection of dynamics only tangentially related to economic value.

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How to Quantify Sustainability’s Impact on Your Bottom Line

Harvard Business Review

We found that sustainable and deforestation-free practices created significant financial benefits for all players in the industry’s value chain. Specifically, our analysis found that the net benefits to ranchers ranged from $18 million to $34 million (12% to 23% of revenues) in net present value projected over 10 years. These values can be estimated credibly and cost-effectively, and we set about applying them to the Brazilian beef sector.

Why Those Guys Won the Economics Nobels

Harvard Business Review

Many lay readers are familiar with John Burr Williams and the dividend discount model , or the discounted value of future cash flows. You know, the future value of money, the present value of money — money today is worth more than in the future because you can invest it and get interest. Then at the end, when you’ve brought everything to the present, scenario by scenario, you average. And that’s what these guys [the 2013 Nobel winners] did.

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