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How Corporate Investors Can Improve Their Odds

Harvard Business Review

The operative question for them is, not “How confident am I that this investment will yield a positive return?” Ideas with positive discounted cash flows get investment. Five produced positive returns, two broke even, and three lost a little, but not a catastrophic, amount of money. Those that don’t, don’t.

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Why We Need to Update Financial Reporting for the Digital Era

Harvard Business Review

However, many investors seem to have concluded that the most successful companies with tens of billions of dollars of valuation today could never have justified their valuation at the start of their operation based on discounted cash flow. Investors are paying more attention to ideas and options than to earnings.

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Hospital Budget Systems Are Holding Back Innovation

Harvard Business Review

A second, more radical solution is to create budgets and authority for a service line or integrated practice unit (IPU) that manages a patient’s entire treatment for a high-volume medical condition. The IPU is an essential component of the value-based care model advocated by Harvard Business School’s Michael Porter.

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What Markets Do and Don’t Get About Innovation

Harvard Business Review

Sustaining innovation inhabits the world of incremental change, deliberate strategy , and most financial and management theory. Without theory to tell us how the rules are changing, many tools of management and finance seem to break down. As a result, outlooks are more likely to be positive or mixed.