Hospital Budget Systems Are Holding Back Innovation

Harvard Business

The audience for such innovation wants to be receptive: A recent American Hospital Association (AHA) survey found that 75% of senior hospital executives endorsed the importance of digital innovation. Yet, despite their stated enthusiasm, hospitals have been notoriously slow to adopt digital innovations. A hospital organized into these different unconnected units finds it difficult to adopt innovations that reduce costs across a patient’s complete cycle of care.

Reflecting on David Garvin’s Imprint on Management

Harvard Business

Garvin was a generalist more than a specialist, perhaps because he came of age at HBS during the 1980s, when the school’s primary focus was the development of skilled general managers. Kaplan’s balanced scorecard or Clayton Christensen’s disruptive innovation. But he gave us something just as important, I think: curiosity about — and great insight into — the gnarly, complicated work that general managers do.

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Rethinking Valuation So You Don't Miss a Good Deal

Harvard Business Review

Since the Three Horizons represent different levels of uncertainty, they need to be managed and valued differently. The higher level of uncertainty associated with H2 and H3 necessitates an updated valuation methodology that takes into account more than the net present value (NPV) of the target. The two together, NPV + OV, provide an inclusive but not inflated valuation. MacMillan is the Ambani Professor of Innovation and Entrepreneurship and Director, Sol C.

Is Your Business Biased Against Innovation?

Strategy Driven

Many people do not typically think of metrics and accounting as roadblocks to innovation, yet you call these out as potential problem areas. Net present value [NPV] is a case in point. 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. Yet for the small handful of companies that have managed to drive growth consistently – even through tough times – the payoff is great.

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Stop Focusing on Profitability and Go for Growth

Harvard Business

Next time you're deciding about a big investment, NPV can help you make a more informed decision. Others reward easy-to-measure improvements in existing processes over less-easily-quantified innovations. Companies that encourage innovation take steps to overcome these organizational obstacles. Even when an organization has a robust pipeline of growth ideas and manages to keep many of them alive, it may lack the human capital needed to accelerate growth.

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The Worst Failure of All Is Wasting a Failure

Harvard Business Review

Sebell (mark@creativerealities.com), who are managing partners at Creative Realities, Inc. a Boston-based innovation management collaborative. We often ask executives to tell us about their biggest innovation failures. In interviews with a dozen senior managers from a large company, two particular failures came up over and over again. The CEO and CFO responded with, "A failure to hit ROI and NPV targets." If an innovation initiative failed, ask why.

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

Harvard Business

This has led to high levels of AWS specific investment from innovators like CloudHealth Technologies, Qubole, Mapbox, and the like. Next time you're deciding about a big investment, NPV can help you make a more informed decision. And that is a very important difference driving the behavior of managers in industrial era firms. Nicholas Blechman for HBR.