Harvard Business Review

APRIL 5, 2017

However, firms can efficiently increase margin growth without much revenue growth by managing to squeeze out their fixed costs to service the same level of output. Many compensation plans reward managers for higher earnings and higher stock prices, as opposed to rewarding them for adding long-term value to the firm.

EPS 8

EPS Metrics Depreciation Short-term 8

Harvard Business Review

OCTOBER 15, 2013

The best executives understand which ones they need to focus on and which ones they can delegate. While the obvious decisions that CEOs need to get right involve strategy and competitive advantage, too many executives delegate away three critical decisions that they need to own: decisions about goals, resource allocation, and people.

P&L 8

P&L Fixed Assets Charan Delegation 8

Harvard Business Review

OCTOBER 25, 2018

To analyze the superstar dynamics of firms, our metric was economic profit, a measure of a firm’s profit above and beyond opportunity cost. (To To do this, we take the firm’s returns, deduct the cost of capital, and multiply by the firm’s total invested capital.)

Industry 12

Industry Company GDP Bottom-up 12

Harvard Business Review

OCTOBER 10, 2017

A recent McKinsey report found that while 84% of corporate executives think innovation is key to achieving growth objectives, only 6% are satisfied with the innovation performance of their firm. Even if executives try to prioritize it, innovation often gets crowded out by more “urgent” short-term pressures.

Innovation 8

Innovation P&L ROI Long-term 8

Harvard Business Review

SEPTEMBER 13, 2017

We thus wanted to figure out a way to help executives quantify the financial benefits of reducing their firm’s greenhouse gas (GHG) emissions. These values can be estimated credibly and cost-effectively, and we set about applying them to the Brazilian beef sector. Measuring Sustainability’s Impact Across the Value Chain.

Supply Chain 8

Supply Chain Net Present Value Retail Cost of Capital 8

Harvard Business Review

NOVEMBER 20, 2013

Two uncomfortable strategic truths face the vast majority of executives and companies – and probably you, too. A second new McKinsey study delves into the question of what executives are doing about their strategic shortfall, and concludes that most are not doing enough. Execute decisively. Lucky for him!

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

OCTOBER 3, 2011

Concepts like "societal value," "shared value," and "customer capitalism" are offered as desirable and more enlightened substitutes. CEOs who understand the principles of shareholder value and execute effectively will satisfy most, if not all, of the objectives of those who call for a new way of thinking. This is muddled thinking.

Short-term 11

Short-term Long-term Price CEO 11

Harvard Business Review

FEBRUARY 7, 2011

We will define skill as "the ability to use one's knowledge effectively and readily in execution or performance" and luck as "events or circumstances that operate for or against an individual." Take, for instance, a group of companies that currently have high returns on invested capital (ROIC). The first is to define the terms.

Skills 15

Skills ROIC Sports Cost of Capital 15

Harvard Business Review

MARCH 10, 2011

Many are deeply uncertain about which initiatives they should fund — and one root of this indecision is a general lack of confidence in the cost of capital projections they are using to make the call. Download this pdf for an executive summary, or login here for the full report.)

Cost of Capital 12

Cost of Capital CAPM Cost Discounted Cash Flow 12

Harvard Business Review

MARCH 28, 2016

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. Organization: From Managing Complexity to Rapid Response. The leading companies of the 2oth century were behemoths.

Long-term 8

Long-term Short-term Reputation Incentives 8

Harvard Business Review

MAY 24, 2017

Today’s executives spend a lot of time managing the balance sheet, despite the fact that it doesn’t represent their company’s scarcest resource. Financial capital is relatively abundant and cheap. According to Bain’s Macro Trends Group, the global supply of capital stands at nearly 10 times global GDP.

Human Capital 15

Human Capital Management Company ROCE 15

Harvard Business Review

OCTOBER 21, 2016

Today’s executives are dealing with a complex and unprecedented brew of social, environmental, market, and technological trends. These require sophisticated, sustainability-based management. ” Improving risk management. Investing in sustainability is not only a risk management tool; it can also drive innovation.

Supply Chain 8

Supply Chain Price Loyalty Efficiency 8

Harvard Business Review

FEBRUARY 7, 2017

Companies deliver superior results when executives manage for long-term value creation and resist pressure from analysts and investors to focus excessively on meeting Wall Street’s quarterly earnings expectations. This has long seemed intuitively true to us. The returns to society and the overall economy were equally impressive.

Long-term 8

Long-term EPS Short-term Management 8

Harvard Business Review

OCTOBER 11, 2013

When the well-known hedge fund manager and short-seller Jeremiah Hughes first put Terranola in the spotlight, issuing ominous warnings about unsold products, a looming patent expiration, and flawed growth projections, the considered judgment of the executive team was to do nothing. “I They even sued one fund manager.

Case Study 8

Case Study CFO Hedge PR 8

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

MAY 25, 2018

” Another is, “How will a company like that ever be managed?” Executives have gotten much better at buying and integrating businesses. The most successful will develop clear joint goals and an entrepreneurially enabled management style that focuses more on outcomes than on control.

Incubator 8

Incubator Insurance Cost of Capital Competitive Advantage 8

Harvard Business Review

NOVEMBER 7, 2012

There is a fascinating relationship between executives and the stock prices of the companies they manage. On the one hand, executives generally want their stocks to rise, affirming the perceived health of the enterprise they run and padding their remuneration. Rappaport offered me clarity in my state of confusion.

Price 8

Price Analysis Cost of Capital Disruptive Innovation 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. Yet for the small handful of companies that have managed to drive growth consistently – even through tough times – the payoff is great. How do they do it?

Innovation 50

Innovation NPV Business Model Constraint 50