Harvard Business Review

OCTOBER 10, 2017

Even if executives try to prioritize it, innovation often gets crowded out by more “urgent” short-term pressures. For any business to succeed over the long term, it must earn a return that exceeds its cost of capital. Here are four things leaders can do. Don’t Get Trapped in Your P&L.

Innovation 8

Innovation P&L ROI Long-term 8

Harvard Business Review

DECEMBER 13, 2017

This has been a remarkable year for the markets. Some argue that profits are stagnant because of short-termism—that decades of focusing on current profits over long-run innovativeness has resulted, now, in companies that are hollowed out. MirageC/Getty Images. The S&P and the Dow indexes are up 18% and 19%, respectively.

Short-term 8

Short-term Decentralization Company Trends 8

Harvard Business Review

MAY 4, 2012

As we saw again this quarter, earnings announcements can have significant impacts on stock valuations—at least over the short term. By helping to fill this analytical void, CFOs can make it more likely that the market will develop expectations that are grounded in reality. FD) constraints.

CFO 11

CFO Metrics Price Depreciation 11

Harvard Business Review

MARCH 31, 2015

It is true that that breaches are expected and have become a regular cost of doing business, but there are deeper reasons for the market’s failure to respond to these incidents. This mismatch between the stock price and the medium and long-term impact on companies’ profitability should be addressed through better data.

Price 8

Price Long-term Banking Short-term 8

Harvard Business Review

MARCH 28, 2016

This was the era of the company man, where employees exchanged long-term loyalty for a livable wage and a pension plan. And given the pace of growth, capital was always in demand. Outside funds bring with them a pressure to achieve short-term results that trade-off with value creation.

Long-term 8

Long-term Short-term Reputation Incentives 8

Harvard Business Review

JUNE 22, 2015

Marketers often have to make the call on whether a certain marketing investment is worth the cost. Can you justify the price tag of the ad you want to buy or the marketing campaign you’re hoping to launch next quarter? The variable costs to make each pair of flip flops are $14.00. How do you calculate it?

Payback Period 8

Payback Period Fixed Costs Analysis Price 8

Harvard Business Review

MARCH 10, 2011

With a record $2 trillion in cash and short-term liquid assets on hand, U.S. 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. What's holding them back?

Cost of Capital 12

Cost of Capital CAPM Cost Discounted Cash Flow 12

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. We’ve seen companies such as Unilever, AT&T, and Amazon succeed by sticking resolutely to a long-term view.

Long-term 8

Long-term EPS Short-term Management 8

Harvard Business Review

APRIL 2, 2014

Back in the ‘60s, people developed the capital asset pricing model [CAPM] as a way to do that. You’d have this beta with the market, so you have the riskless rate plus beta times the equity premium. It’s not something that necessarily resonates a lot with people in the markets or people in the world.

CAPM 8

CAPM Discount Price Finance 8