Harvard Business Review

APRIL 5, 2017

The McKinsey Global Institute, in conjunction with FCLT Global, recently released research stating that long-term-oriented companies perform better than those that focus on short-term results. While a laudable effort in principle, measuring a company’s tendency to make myopic operating and investing decisions is fiendishly complex.

EPS 8

EPS Metrics Depreciation Short-term 8

Harvard Business Review

APRIL 16, 2015

Unless your company’s return on capital exceeds its cost of capital, no amount of revenue growth can create value. For the many firms whose cost of capital and return on capital are roughly equal, in fact, the only path to value creation is to increase return on capital. The bottom line?

CEO 8

CEO ROIC Cost of Capital Merton 8

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. Another pervasive reason is that senior executives are trained as operators, not innovators. That’s quite a mismatch. It’s not.

Innovation 8

Innovation P&L ROI Long-term 8

Harvard Business Review

NOVEMBER 20, 2013

Though both statements may sound extreme, they are the clear implication of new McKinsey research on how companies create value and allocate resources. 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.

Strategy 8

Strategy McKinsey Strategic Planning Cost of Capital 8

Harvard Business Review

OCTOBER 25, 2018

In our recent research at the McKinsey Global Institute, we examined the superstar phenomenon across firms, as well as sectors and cities. 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 Wider dynamics may be at play.

Industry 12

Industry Company GDP Bottom-up 12

Harvard Business Review

FEBRUARY 7, 2017

New research, led by a team from McKinsey Global Institute in cooperation with FCLT Global , found that companies that operate with a true long-term mindset have consistently outperformed their industry peers since 2001 across almost every financial measure that matters. In this case its capital charge is $800 times 8%, or $64.

Long-term 8

Long-term EPS Short-term Management 8

Harvard Business Review

OCTOBER 21, 2016

This can disrupt a firm’s ability to operate on schedule and budget. McKinsey reports that the value at stake from sustainability concerns can be as a high as 70% of earnings before interest, taxes, depreciation, and amortization. ” Improving risk management.

Supply Chain 8

Supply Chain Price Loyalty Efficiency 8