Harvard Business Review

OCTOBER 15, 2013

At many companies the total cash investment in acquisitions, R&D, and fixed assets has not earned back its cost of capital after adjusting for the time lag in realizing incremental benefits. It reflected the reality that a lot of GE’s growth will be coming from the developing world, and the leaders have to be there.

P&L 8

P&L Fixed Assets Charan Delegation 8

Harvard Business Review

JULY 25, 2017

Some companies establish a threshold for MROI that takes into account its risk tolerance and cost of capital, below which they are hesitant to make investments. “In principle, managers should try to estimate the full cost of the marketing activity, including creative development, media spend, and customer-facing staff time.”

ROI 8

ROI Marketing Marketing Mix Cost of Capital 8

Harvard Business Review

OCTOBER 10, 2017

Don’t Get Trapped in Your P&L. For any business to succeed over the long term, it must earn a return that exceeds its cost of capital. Procter & Gamble’s Connect + Develop program and the Innocentive platform apply similar approaches. Here are four things leaders can do.

Innovation 8

Innovation P&L ROI Long-term 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. New product development is such a big piece of building new business, or so we are told. Net present value [NPV] is a case in point.

Innovation 50

Innovation NPV Business Model Constraint 50