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

Harvard Business

Today’s executives spend a lot of time managing the balance sheet, despite the fact that it doesn’t represent their company’s scarcest resource. Financial capital is abundant but carefully managed; human capital is scarce but not carefully managed. In part, it’s because we value and reward good management of financial capital. Great CEOs are held in high regard for their clever management and allocation of financial capital.


Walmart Broadens ROI for Green Power

Harvard Business Review

It also recognizes that, in the meantime, operational managers will gain valuable experience and knowledge about how to optimize the new power systems. We worship internal rates of return (IRR) to our detriment. For years I've made the case that companies should shift their decision-making and investment criteria to take into account intangible and longer-term benefits that are missed in normal IRR calculations. Corporate social responsibility Sustainability Wal-mart IRR


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A Refresher on Internal Rate of Return

Harvard Business Review

There are a variety of methods you can use to calculate ROI — net present value , payback, breakeven — and internal rate of return , or IRR. For help in deciphering this I talked with Joe Knight, author of HBR TOOLS: Return on Investment and cofounder and owner of the Business Literacy Institute , to learn more about how IRR works and when to use it. The IRR is the rate at which the project breaks even. If the IRR is higher, it’s a worthwhile investment.


Connecting To Happiness: A Single Model For Leadership Excellence

Terry Starbucker

You can imagine this specific application of the model wouldn’t work for certain other constituencies – like investors or executive management, for example ( I often did imagine the reception I’d get if I drew a smiley face in the boardroom, but alas, I never tried it ). The goal is a high IRR, and the resulting Cause is “ meaningfully increasing shareholder value”. (cc) Shashi Bellamkonda www.shashi.name.

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Three Headwinds for Facebook's IPO

Harvard Business Review

Over the past couple of years, I've become close with a handful of web product managers. For every 10 investments, a good firm may have one defining investment, returning hundreds of percent in IRR. I am not pessimistic about Facebook's future. I have used the social network for eight years and continue to be impressed with Mark Zuckerberg's focus on product and his vision for the internet.

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Lafley’s P&G Brand Cull and the 80/20 Rule

Harvard Business Review

“Importantly, this will be a much simpler, much less complex company of leading brands that’s easier to manage and operate.” ” Choosing to lead and manage in accord with that empirical insight has enormous organizational and operation repercussions. Should management refine and dig deeper into existing 80/20 KPIs? Declaring he’d cull up to 100 brands — many of which he’d acquired and developed — P&G CEO A.G.


Two Forces Moving Business Closer to Climate Action

Harvard Business Review

and an IRR of 27% for those companies with the most aggressive, science-based goals and actions on climate. Even those hippies over at asset manager Lazard calculate that the cost of solar PV technologies has dropped nearly 80% in five years. This week, CEOs and world leaders met at the UN to talk climate.