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Only the CEO Can Make the Big Bets

Harvard Business Review

Listen up, CEOs: Only you can make the big bets about where your industry's hockey puck is going. If CEOs rarely have the courage to use their educated gut, what impact does that have on the people below? And using net-present-value estimates for "beginning" ideas is nuts. So, we shelved the idea.

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Why Some Digital Companies Should Delay Profitability for as Long as They Can

Harvard Business Review

When Patrick Collison, CEO of electronic payments company Stripe, helped kick off our second-year strategy course at the Stanford Graduate School of Business this year, he observed that this has created one of the most profound differences in decision criteria between leaders in industrial-era and internet-era companies. So is Facebook.

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Match Your Innovation Process to the Results You Want

Harvard Business Review

When forced to present familiar metrics for truly out-of-the-box "beginning" ideas, work teams develop what our friend Jay Paap calls "Imaginary Numbers." As for decision-making there is one simple rule in pursuit of breakthroughs: "The higher the goal the higher the role." They can't wait until everything is "ready."

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Why We Need to Update Financial Reporting for the Digital Era

Harvard Business Review

Business students have traditionally considered net present value, payback period, and hurdle rates as necessary tools to determine which project to select. Some of these ideas contradict traditional financial thinking whereas others seem highly controversial or pessimistic.

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The Secrets to Building a Lucky Network

Harvard Business Review

I was just in Las Vegas spending time at the Downtown Project backed by Zappos CEO Tony Hsieh (who self-professes that Luck serves as a core factor in his success). But to convert a Lucky Attitude into success, you also need to build what we call a Lucky Network.

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Warren Buffett's 2010 Shareholder Letter: What to Expect

Harvard Business Review

But why compare apples (book value) to oranges (share price and dividends)? Buffett explains that book value is the best proxy for "intrinsic value," the net present value of all estimated future cash flows. Consider that since 1965, Berkshire's book value grew 434,057% and the S&P index grew only 5,430%.

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When It Pays to Think Like a Finance Manager

Harvard Business Review

Do you think they’re going to do a net present value (NPV) analysis that shows they don’t need that computer? The CEO negotiates with a company he or she wants to acquire. Not long after, the board fired the CEO. Joe Knight. Add to Cart. Of course not. billion with incentives several years ago.