Hospital Budget Systems Are Holding Back Innovation

Harvard Business

We have identified how hospitals’ budgeting systems have erected three distinct barriers to the adoption of technology. These barriers, however, can be overcome by changing how hospitals acquire new technology and by providing incentives to units to use digital innovations to provide more effective and efficient care. How technology is changing the design and delivery of care. Financial management Technology Innovation Healthcare Digital Article

What is Great Leadership?

Great Leadership By Dan

Will upper management (Boomers/X’ers) see the value in including the Millennials is the long range planning process? These same companies tends to use label like hi potential, key to retain, top talent and other terms which on the surface, motivates those given the titles while others who are equally as important to the organization are left to ponder their value.

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A Blueprint for Digital Companies’ Financial Reporting

Harvard Business

This example illustrates that investors consider information beyond just earnings as value-relevant. In a recent HBR article , we claimed that modern digital companies such as Uber, Facebook, and Alphabet play an increasingly important role in the economy, but their financial statements fail to capture company’s main value drivers. The second item in a firms’ financial disclosures should be a detailed statement of outlays, presented in three broad categories.

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

Harvard Business

If our oceans suddenly turned to chocolate, the incremental value of that volume would plummet — we’d truly have more chocolate than we really needed. In the world of technology: the more of something you make, the more valuable it can become. This has led to high levels of AWS specific investment from innovators like CloudHealth Technologies, Qubole, Mapbox, and the like. The Refresher: Net Present Value. Nicholas Blechman for HBR.

How Marketers Can Avoid Big Data Blind Spots

Harvard Business Review

That’s because marketing has a big opportunity to drive above-market growth and demonstrate its value to the C-suite and the boardroom. That kind of value can turn plenty of heads in the C-suite. Without ongoing investment in the brand, the value of this base erodes over time and creates a stiff head wind for future sales. These estimates can then help determine the Net Present Value (NPV) of the long term effect of marketing in terms of future sales.

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Why We Need to Update Financial Reporting for the Digital Era

Harvard Business

In our recent HBR article , we argued that financial statements fail to capture the value created by modern digital companies. Since then, we interviewed several chief financial officers (CFOs) of leading technology companies and senior analysts of investment banks who follow technology companies. and (ii) how can digital firms improve their financial reports to communicate sources of value creation in their businesses? Martin Konopka/EyeEm/Getty Images.

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What If Investors Who Held Their Shares Longer Got More Voting Power?

Harvard Business

” Laying out their data, they find that long-term oriented companies create more financial value and more jobs. The Refresher: Net Present Value. While not fully analogous, if Singapore sovereign wealth fund Temasek holds its equities for, say, 8 years on average while quantitative arbitrage hedge fund Renaissance Technologies holds them for milliseconds at a time, the Temasek capital is more valuable than Renaissance’s.

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When It Pays to Think Like a Finance Manager

Harvard Business Review

Everyone always wants new equipment — new computers or other hot technologies. Do you think they’re going to do a net present value (NPV) analysis that shows they don’t need that computer? The two founding partners were both engineers who loved technology. With this new technology they could take a CAD design, send it to the three-dimensional printer, and get a plastic model of the part.

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How to Choose the Ideas Your Company Should Invest In

Harvard Business Review

Can we get to the market without any technological miracles? Note what isn't part of the decision: an idea's net present value or return on investment. My last post described how Innosight follows a three-stage process to evaluate investment proposals from outside entrepreneurs. But deciding how to invest in ideas at a corporation is a different beast.

Why Is an App Worth as Much as a Small Oil Field?

Harvard Business Review

While on the surface, the dirty business of fossil fuels is nothing like Silicon Valley, many in the oil business have moved beyond the standard net present value (NPV) model for assessing the merit of investments. If you’re evaluating the rights to new shale oil reserves in a place like North Dakota, today you’d rely instead on a different economic model: option value. But Facebook has also bought itself time to figure out how to extract value from that audience.

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An Unexpected Lesson from Mandela: Why Context Matters

Harvard Business Review

This would be a breakthrough communication technology, with the power of connecting an excluded and fragmented continent with itself, with the world, and to this newly emerging phenomenon — that none of us quite understood at the time — called the Internet. I made what I thought was a brilliant presentation to senior bureaucrats and technologists. These were engineers and network planners; surely, they understood economics and net present value analysis.

Don’t Let Your Company Get Trapped by Success

Harvard Business Review

This can be quantified by analyzing the extent to which the share prices of S&P 500 firms are driven by a firm’s present value of future growth options (PVGO) rather than cash flow from current operations. This overall decline represents an enormous loss in future option value. Investors now value the future growth options of these firms relatively less—by a staggering $1 trillion. It’s harder to stay on top than to get there.

Shape Strategy With Simple Rules, Not Complex Frameworks

Harvard Business Review

To prioritize projects, for instance, the ALL team could have forecast future cash flows for every potential investment and ranked all proposals on the basis of their net present value. And of course, complex models demand huge volumes of data, are susceptible to computational errors, and hinge on assumptions about unknowable variables such as disruptive technologies that, if wrong, can throw off the results.

Why Those Guys Won the Economics Nobels

Harvard Business Review

Many lay readers are familiar with John Burr Williams and the dividend discount model , or the discounted value of future cash flows. You know, the future value of money, the present value of money — money today is worth more than in the future because you can invest it and get interest. Then at the end, when you’ve brought everything to the present, scenario by scenario, you average. There’s also a size factor and a value factor.

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