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Why Some Digital Companies Should Delay Profitability for as Long as They Can

Harvard Business Review

For years, AWS has invested in driving developer and company adoption of its platform by driving down prices and introducing low cost features to make developer’s lives easier. That ecosystem investment reinforces the value proposition and drives more developer adoption. The Refresher: Net Present Value.

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Match Your Innovation Process to the Results You Want

Harvard Business Review

It tends to be short-term, uses familiar (traditional) metrics and development systems like Stage Gate. When forced to present familiar metrics for truly out-of-the-box "beginning" ideas, work teams develop what our friend Jay Paap calls "Imaginary Numbers." They must also be willing to see value in absurdity.

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Why We Need to Update Financial Reporting for the Digital Era

Harvard Business Review

Business students have traditionally considered net present value, payback period, and hurdle rates as necessary tools to determine which project to select. Some of these ideas contradict traditional financial thinking whereas others seem highly controversial or pessimistic.

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The Secrets to Building a Lucky Network

Harvard Business Review

Hsieh and his team highlight the importance of "serendipitous connections" in enabling this effort to succeed, and are working hard to facilitate such encounters. And they develop great relationships, less through obsequies and architected targeting, but by naturally, authentically, and generously giving and caring about people.

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How CMOs Can Get CFOs on Their Side

Harvard Business Review

In our work with clients across dozens of sectors over more than five years, we have found that the strongest CMO/CFO partnerships develop when both parties undertake five actions: 1. CFOs are more interested in capital investment estimates, net present values, and a clear outline of the trade-offs of any investment.

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Shape Strategy With Simple Rules, Not Complex Frameworks

Harvard Business Review

Its new management team took over an organization that was bureaucratic, overstaffed, and bleeding cash. The team decided to adopt a simple-rules approach to the work ahead. Accordingly, the management team identified capital budgeting as a critical bottleneck keeping the company from achieving its objectives.

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What Private Equity Investors Think They Do for the Companies They Buy

Harvard Business Review

In financial engineering, PE investors provide strong equity incentives to the management teams of their portfolio companies. In operational engineering, PE firms develop industry and operating expertise that they bring to bear to add value to their portfolio companies. What about once PE firms make an investment?

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