Harvard Business Review

DECEMBER 13, 2017

This has been a remarkable year for the markets. Investors punish companies with a short-term orientation by applying higher discount rates to them, which increases the cost of capital for those companies. This means they generate less revenue, profit and market value per dollar of R&D. MirageC/Getty Images.

Short-term 8

Short-term Decentralization Company Trends 8

Harvard Business Review

FEBRUARY 1, 2018

The cost of capital is at historic lows, averaging below 6% for most large U.S. Indeed, for most companies, the value of accelerating growth greatly exceeds the value of returning capital to shareholders. Indeed, for most companies, the value of accelerating growth greatly exceeds the value of returning capital to shareholders.

Supply Chain 9

Supply Chain CEO Discount Retail 9

Harvard Business Review

MAY 25, 2018

Mr. Rockefeller’s business strategy was to vertically integrate every aspect of the oil business (exploration, development, logistics, marketing) to assure an ongoing competitive advantage. Managers will also have to embrace the concept that not all ideas will be market winners—but until you try, you won’t know.

Incubator 8

Incubator Insurance Cost of Capital Competitive Advantage 8

Harvard Business Review

NOVEMBER 4, 2014

Both of us have done work on sustainable development and are keen to see a transition away from fossil fuels in order to limit climate change. The key argument for fossil fuel divestment is that the cost of carbon dioxide emissions and other pollutants are not being accurately priced by the market.

Finance 8

Finance Cost of Capital Constraint Price 8

Harvard Business Review

NOVEMBER 4, 2014

Both of us have done work on sustainable development and are keen to see a transition away from fossil fuels in order to limit climate change. The key argument for fossil fuel divestment is that the cost of carbon dioxide emissions and other pollutants are not being accurately priced by the market.

Finance 8

Finance Cost of Capital Constraint Price 8

Harvard Business Review

APRIL 26, 2017

The marketing, underwriting, and servicing of SME loans have largely taken a backseat. New digital entrants have spotted the market opportunity created by these dynamics, and the result is an explosion in online lending to SMEs from fintech startups. Banks’ cost of capital is typically 50 basis points or less.

Banking 12

Banking Stage-Gate Credit Scoring Competitive Advantage 12

Harvard Business Review

SEPTEMBER 4, 2017

.” There is a virtuous cycle between productivity and people: Higher levels of productivity allow society to reinvest in human capital (most obviously, though not exclusively, via higher wages), and smart investments result in higher labor productivity. Productivity in most developed economies has been anemic.

Human Capital 15

Human Capital Kaizen Agility Energy 15

Harvard Business Review

MAY 4, 2012

Investors reward companies (such as Apple and Kimberly-Clark ) whose current performance or guidance for the future exceeds market expectations, and they punish companies (as they did Starbucks and Procter & Gamble ) whose performance or guidance fails to meet expectations. FD) constraints.

CFO 13

CFO Metrics Price Depreciation 13

Harvard Business Review

NOVEMBER 20, 2013

The rest of the companies, more than 2,400, simply do not have a strategy that effectively outperforms the market. Retool your strategy development process. The process of developing that strategy is critical. How confident are you that you can ‘beat the market’? Such advantages are scarce and often fleeting.

Strategy 8

Strategy McKinsey Strategic Planning Cost of Capital 8

Harvard Business Review

NOVEMBER 25, 2013

Marketing is in the midst of an ROI revolution. The arrival of advanced analytics and plentiful data have allowed marketers to demonstrate return on investment with a degree of precision that’s never been possible before. To date, however, the reality of marketing analytics has fallen short of the promise.

CFO 8

CFO Short-term Long-term Benchmarking 8

Harvard Business Review

OCTOBER 25, 2018

To analyze the superstar dynamics of firms, our metric was economic profit, a measure of a firm’s profit above and beyond opportunity cost. (To To do this, we take the firm’s returns, deduct the cost of capital, and multiply by the firm’s total invested capital.)

Industry 13

Industry Company GDP Bottom-up 13

Harvard Business Review

OCTOBER 15, 2013

At many companies the total cash investment in acquisitions, R&D, and fixed assets has not earned back its cost of capital after adjusting for the time lag in realizing incremental benefits. It was the first time a vice chair would be based in an emerging market. We are shifting our center of gravity.”

P&L 8

P&L Fixed Assets Charan Delegation 8

Harvard Business Review

MAY 14, 2013

Europe''s $100 billion carbon market, an innovative force in the powerful carbon-reduction approach known as cap and trade, has ceased to function the way it''s supposed to. And it''s all because of a failure of political will in Europe to override the market''s built-in lack of flexibility and fix the imbalance between supply and demand.

Price 9

Price Energy Politics Marketing 9

Harvard Business Review

OCTOBER 10, 2017

For any business to succeed over the long term, it must earn a return that exceeds its cost of capital. It is through continuously making incremental progress in lowering costs and increasing revenues that firms achieve competitive advantage in their industry. Here are four things leaders can do. Build for the Few, Not the Many.

Innovation 8

Innovation P&L ROI Long-term 8

Harvard Business Review

OCTOBER 21, 2016

Today’s executives are dealing with a complex and unprecedented brew of social, environmental, market, and technological trends. Yet executives are often reluctant to place sustainability core to their company’s business strategy in the mistaken belief that the costs outweigh the benefits. In 2005, they launched a U.S.

Supply Chain 8

Supply Chain Price Loyalty Efficiency 8

Harvard Business Review

JUNE 18, 2015

We also know that private equity funds have outperformed public equity markets over the last three decades , even after the fees they charge are accounted for. In operational engineering, PE firms develop industry and operating expertise that they bring to bear to add value to their portfolio companies.

CAPM 8

CAPM Discounted Cash Flow Company Rate of Return 8

Harvard Business Review

APRIL 2, 2014

Campbell’s work has also made liberal use of the analytic tools developed by Hansen. Back in the ‘60s, people developed the capital asset pricing model [CAPM] as a way to do that. You’d have this beta with the market, so you have the riskless rate plus beta times the equity premium. That’s kind of a deep insight.

CAPM 8

CAPM Discount Price Finance 8

Harvard Business Review

FEBRUARY 7, 2017

Among the firms we identified as focused on the long term, average revenue and earnings growth were 47% and 36% higher, respectively, by 2014, and market capitalization grew faster as well. It started with developing a proprietary Corporate Horizon Index. public market capitalization over this period.

Long-term 8

Long-term EPS Short-term Management 8

Strategy Driven

SEPTEMBER 9, 2011

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. With Discovery-Driven Growth , Rita and Ian offer managers everywhere a time-tested blueprint for planning and executing a strategic growth agenda with confidence – in any market.

Innovation 50

Innovation NPV Business Model Constraint 50

Harvard Business Review

MARCH 1, 2017

Blockchain was originally developed as the technology behind cryptocurrencies like Bitcoin. After all, how do you cut cost from a business or market whose structure has fundamentally changed? If the world of venture capital can change radically in one year, what else can we transform?

Finance 8

Finance IPO Banking Venture Capitalist 8