Performance Measurement

Strategy Driven

Supplementing profits with ROIC and revenue growth is a step in the right direction to ensure that the profits a business earns are actually creating value, not simply over-consuming capital that another company could better deploy.

ROIC 75

What If Companies Managed People as Carefully as They Manage Money?

Harvard Business Review

Finding, developing, and retaining this talent is hard — so much so that the business press refers to a “war” for talent. Based on our research , inspired employees are three times more productive than dissatisfied employees, but they are rare. A veritable alphabet soup (ROA, RONA, ROIC, ROCE, IRR, MVA, APV, and the like) exists to measure our financial capital. Talent management Managing organizations Productivity Digital ArticleVincent Tsui for HBR.

ROCE 13

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CEOs Don’t Care Enough About Capital Allocation

Harvard Business Review

The results can be impressive: if your firm’s return on invested capital is 8% and you have an 8% cost of capital, a 1% improvement in ROIC will increase firm value by 19%.

ROIC 16

How Companies Can Use Investors to Their Advantage

Harvard Business Review

Directly influenced by investor input, Nikon developed a restructuring plan that would carry a onetime cost of ¥48 billion ($460 million) but generate ¥20 billion ($190 million) in annual savings. The plan involved reforming Nikon’s struggling semiconductor lithography and imaging productsunits, both potentially high-value-added businesses, by cutting fixed costs, reducing SKUs and focusing on high-value-added product lines.

ROIC 13