Harvard Business Review

APRIL 5, 2017

Repaying such profits to shareholders through share repurchases is better than misinvesting that cash to diversify into unrelated businesses in which management has no expertise or overinvesting in projects that may not return cost of capital. As I said earlier, measuring a company’s short-term orientation is incredibly tricky.

EPS 8

EPS Metrics Depreciation Short-term 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 13

Industry Company GDP Bottom-up 13

Harvard Business Review

OCTOBER 21, 2016

Fostering innovation. Investing in sustainability is not only a risk management tool; it can also drive innovation. Nike embedded sustainability into its innovation process and created the $1 billion-plus Flyknit line, which uses a specialized yarn system, requiring minimal labor and generating large profit margins.

Supply Chain 8

Supply Chain Price Loyalty Efficiency 8

Strategy Driven

SEPTEMBER 9, 2011

Many people do not typically think of metrics and accounting as roadblocks to innovation, yet you call these out as potential problem areas. Many conventional metrics we use to estimate value are based on faulty assumptions. Companies that will eventually be wrecked by others’ innovations are operating on autopilot.

Innovation 50

Innovation NPV Business Model Constraint 50