article thumbnail

How to Choose the Ideas Your Company Should Invest In

Harvard Business Review

Can we get to the market without any technological miracles? Note what isn't part of the decision: an idea's net present value or return on investment. Consider some combination of the following criteria: Does what we hope to do fit our strategy? (If If you don't have an innovation strategy , go and create one.).

Company 14
article thumbnail

A Blueprint for Digital Companies’ Financial Reporting

Harvard Business Review

In a recent HBR article , we claimed that modern digital companies such as Uber, Facebook, and Alphabet play an increasingly important role in the economy, but their financial statements fail to capture company’s main value drivers. The analyst can then top that valuation with the option values of moonshot projects.

Report 8
article thumbnail

Don’t Let Your Company Get Trapped by Success

Harvard Business Review

This can be quantified by analyzing the extent to which the share prices of S&P 500 firms are driven by a firm’s present value of future growth options (PVGO) rather than cash flow from current operations. Our research shows that U.S. Cultivate ambidexterity.