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Lead with a Coherent Strategy

Coaching Tip

Among the problematic symptoms and by-products of incoherence – of paying too much attention to external positioning and succumbing to pressure for excessive short-term growth – companies are often: . Bringing on more fixed assets, instead of building market-leading capabilities. Leaders must compel the organization to choose.

Strategy 178
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Resolution 2011: Make Your Strategy Coherent

Harvard Business Review

Focus on capabilities rather than just fixed assets: Fixed assets, including brands, are more difficult to leverage across diverse businesses and tend to expire, become obsolete, or give way to related services. But we believe a capabilities-driven strategy is the most direct, efficient, and effective way to get there.

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How Likely Is Your Industry to Be Disrupted? This 2×2 Matrix Will Tell You

Harvard Business Review

Ultimately, Accenture’s Disruptability Index positioned 20 industry sectors — and 98 segments within those sectors — against those two axes. Previously strong barriers to entry have perished; fixed assets such as car fleets, hotels, bank branches, and landline infrastructure have become weaknesses.

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China’s Growth: A Brief History

Harvard Business Review

Some find evidence of a clear improvement of total factor productivity since market-oriented reforms began in 1979, estimating that the increase in TFP contributed about 40% to GDP growth, roughly the same as that contributed by fixed asset investment. There was also a slowdown in TFP after the mid 1990s. by the end of that period.

GDP 8
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What It Takes to Be a Great Employer

Harvard Business Review

How crazy is it that companies are willing to invest in preventative maintenance on fixed assets such as their machinery, but typically won't make a comparable investment to enhance and sustain the health and well-being of their employees? Think about how you feel when you're performing at your best.

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Retailers Beware: Markets Punish Stores with Too Much Inventory

Harvard Business Review

It is derived by adjusting for changes in gross margin, capital intensity (fixed assets as a proportion of total assets), and positively for sales surprise (the degree to which actual sales exceeds or falls short of forecast).

Retail 13
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Finally, Proof That Managing for the Long Term Pays Off

Harvard Business Review

” Economic profit represents a company’s profit after subtracting a charge for the capital that the firm has invested (working capital, fixed assets, goodwill). A company is creating value when its economic profit is positive, and destroying value if its economic profit is negative.