Harvard Business Review

NOVEMBER 20, 2013

Retool your strategy development process. The process of developing that strategy is critical. Unfortunately, nearly eight in ten executives surveyed by McKinsey describe the strategic-planning processes at their companies as more geared to confirming existing hypothesis than to testing new ones.

Strategy 8

Strategy McKinsey Strategic Planning Cost of Capital 8

Harvard Business Review

APRIL 26, 2017

In addition to improving the experience for business owners, digitization has the potential to substantially reduce the cost of lending at every stage of the process, making SME customers more profitable for lenders, and creating opportunities to serve a broader swath of SMEs. The questions banks should ask themselves.

Banking 11

Banking Stage-Gate Credit Scoring Competitive Advantage 11

Harvard Business Review

OCTOBER 10, 2017

For any business to succeed over the long term, it must earn a return that exceeds its cost of capital. It is through continuously making incremental progress in lowering costs and increasing revenues that firms achieve competitive advantage in their industry. Here are four things leaders can do.

Innovation 8

Innovation P&L ROI Long-term 8

Harvard Business Review

AUGUST 27, 2015

Companies in the top one-fifth of profitability earn, in aggregate, about 70 times more economic profit (accounting profit less cost of capital) than those in the middle three-fifths combined, according to McKinsey’s database of 3,000 large, publicly listed, nonfinancial U.S. Consider what’s happening among corporations.

ROIC 8

ROIC McKinsey GDP Company 8

Harvard Business Review

JUNE 27, 2012

Or, as happens all too often, they can pursue complex strategies that beget complex organizations and complex processes until they grind to a halt like a Rube Goldberg machine. real revenue and profit growth and earning their cost of capital has steadily declined. They can focus and simplify their organizations.

Creativity 15

Creativity Long-term Kotter Cost of Capital 15

Harvard Business Review

FEBRUARY 7, 2011

We have a strong tendency to dwell on outcomes without considering the role of process. Think of skill as a process. Take, for instance, a group of companies that currently have high returns on invested capital (ROIC). If you follow that group over time, you would see their ROICs revert back toward the cost of capital.

Skills 15

Skills ROIC Sports Cost of Capital 15

Harvard Business Review

OCTOBER 21, 2016

Disruptions in the supply chain may affect production processes that depend on unpriced natural capital assets such as biodiversity, groundwater, clean air, and climate. A focus on sustainability can also unlock opportunities for process and logistics savings.

Supply Chain 8

Supply Chain Price Loyalty Efficiency 8

Harvard Business Review

MAY 14, 2013

European policy makers have proposed a multistep process to correct the immediate imbalance caused by the weak economy. Share prices for European utilities and industrial companies have fallen too, threatening a wave of credit downgrades and increasing companies'' cost of capital.

Price 8

Price Energy Politics Marketing 8

Harvard Business Review

NOVEMBER 25, 2013

CMOs must demonstrate and track marketing’s impact by focusing on key performance indicators (KPIs) that are important for shareholder value such as strong cash flow, cost of capital, return on capital, and operating margin. Shareholders don’t care about fans or followers unless those numbers can be tied to profit.

CFO 8

CFO Short-term Long-term Benchmarking 8

Harvard Business Review

SEPTEMBER 8, 2014

The goal of strategy is profitable growth, meaning economic value above the firm’s cost of capital. That’s precisely what they do, selling to any customers and, in the process, generating a motley mix of investment initiatives in the selling firm. Soon, it really doesn’t matter what your strategic planning documents say.

Debt to Equity Ratio 10

Debt to Equity Ratio Cost of Capital Strategy Incentives 10

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. Discovery-Driven Growth : A Breakthrough Process to Reduce Risk and Seize Opportunity by Rita McGrath. Net present value [NPV] is a case in point. Japan, Infosys, and Sagentia in the UK.

Innovation 50

Innovation NPV Business Model Constraint 50

Harvard Business Review

MARCH 1, 2017

This all adds cost, with consumers ultimately bearing the burden. First, because it’s antiquated, a kludge of industrial technologies and paper-based processes dressed up in a digital wrapper. After all, how do you cut cost from a business or market whose structure has fundamentally changed?

Finance 8

Finance IPO Banking Venture Capitalist 8