Harvard Business Review

APRIL 26, 2017

The marketing, underwriting, and servicing of SME loans have largely taken a backseat. New digital entrants have spotted the market opportunity created by these dynamics, and the result is an explosion in online lending to SMEs from fintech startups. Banks’ cost of capital is typically 50 basis points or less.

Banking 11

Banking Stage-Gate Credit Scoring Competitive Advantage 11

Harvard Business Review

NOVEMBER 20, 2013

The rest of the companies, more than 2,400, simply do not have a strategy that effectively outperforms the market. To stimulate strategic thinking, answer this question honestly: When you look objectively at your assets, capability and market position is there any reason to believe you can create disproportionate value?

Strategy 8

Strategy McKinsey Strategic Planning Cost of Capital 8

Harvard Business Review

FEBRUARY 2, 2012

Today, only 9% of businesses in the world have achieved even a modest level of sustained, profitable growth over the past decade on average (5.5%, earning cost of capital) and that is declining — even though virtually all the businesses aspire to something like this or more.

Competitive Advantage 14

Competitive Advantage Porter Goleman Emotional Intelligence 14

Harvard Business Review

MARCH 28, 2016

Without external markets to please, they can take a long-term perspective and make decisions on the basis of sustainable economic value. As a result, family equity can come at a very low cost of capital, where businesses can meet the annual needs of their shareholders without having to worry about paying back the principal.

Long-term 8

Long-term Short-term Reputation Incentives 8

Harvard Business Review

JUNE 18, 2015

We also know that private equity funds have outperformed public equity markets over the last three decades , even after the fees they charge are accounted for. Rather, they rely on internal rates of return and multiples of invested capital. Our results on capital structure are more consistent with academic theory and teaching.

CAPM 8

CAPM Discounted Cash Flow Company Rate of Return 8

Harvard Business Review

OCTOBER 11, 2013

I refuse to dignify this attack with a response,” said Henry Guillart, the CEO, just hours after Hughes had given his initial negative presentation at an investor conference in New York. Competitive products came on the market, but none were as popular as the Express. Terranola’s market cap skyrocketed to $8.1 Doom and Gloom.

Case Study 8

Case Study CFO Hedge PR 8

Harvard Business Review

DECEMBER 13, 2017

This has been a remarkable year for the markets. Investors punish companies with a short-term orientation by applying higher discount rates to them, which increases the cost of capital for those companies. While well-intentioned, these efforts fail to recognize that CEO behavior is largely circumscribed by firm structure.

Short-term 8

Short-term Decentralization Company Trends 8

Harvard Business Review

MAY 24, 2017

In part, it’s because we value and reward good management of financial capital. Great CEOs are held in high regard for their clever management and allocation of financial capital. But today’s great CEOs need to be equally great at managing human capital. How can we manage human capital better?

Human Capital 15

Human Capital Management Company ROCE 15

Harvard Business Review

SEPTEMBER 8, 2014

The goal of strategy is profitable growth, meaning economic value above the firm’s cost of capital. In my experience, most CEOs, CFOs, and other C-suite executives involved in strategy formulation know these finance basics. It may seem that sales has little impact on the fourth value-creation lever, the firm’s cost of capital.

Debt to Equity Ratio 10

Debt to Equity Ratio Cost of Capital Strategy Incentives 10

Harvard Business Review

FEBRUARY 7, 2017

Among the firms we identified as focused on the long term, average revenue and earnings growth were 47% and 36% higher, respectively, by 2014, and market capitalization grew faster as well. public market capitalization over this period. In this case its capital charge is $800 times 8%, or $64.

Long-term 8

Long-term EPS Short-term Management 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. With Discovery-Driven Growth , Rita and Ian offer managers everywhere a time-tested blueprint for planning and executing a strategic growth agenda with confidence – in any market.

Innovation 50

Innovation NPV Business Model Constraint 50