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How Companies Can Use Investors to Their Advantage

Harvard Business Review

He asked one former major investor for a reaction to the company’s prediction (accompanying poor quarterly results): “that the [current] market contraction will bottom out soon and our profits will improve.” It would implement targets linked to shareholder value, including ROE and ROIC. The response was disappointing.

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

Harvard Business Review

A veritable alphabet soup (ROA, RONA, ROIC, ROCE, IRR, MVA, APV, and the like) exists to measure our financial capital. Teams of financial planning and analysis professionals measure actual and expected results for financial capital. Capital expenditure plans are subjected to detailed board reviews. Measure it. Monitor it.

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I'm Afraid Bankers Really Do Earn Their Bonuses

Harvard Business Review

Like Return on Invested Capital (ROIC), which reflects what a company earns, how much capital it needs to earn it and the ratio between the two, ROIT reveals what the company earns, how much it has to spend on its talent to earn it, and what the ratio is between the two.

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Five Common Strategy Mistakes

Harvard Business Review

Confusing marketing with strategy. But as important as it is to have insight into customers' needs, don't confuse marketing with strategy. What the marketing-only approach misses is that a robust strategy also requires a tailored value chain, a unique configuration of activities that best delivers that kind of value. Mistake #1.

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Don’t Turn Your Sales Team Loose Without a Strategy

Harvard Business Review

When formulating a strategy, markets and segments are important categories to consider. But a market never buys anything. Either directly in meetings or implicitly in their compensation plans, they basically tell their sales forces to “Go forth and multiply!” Only customers buy. It did this in a few ways.