Strategy Driven

JULY 13, 2011

Supplementing profits with ROIC and revenue growth is a step in the right direction to ensure that the profits a business earns are actually creating value, not simply over-consuming capital that another company could better deploy. However, profits, ROIC, and revenue growth are backward looking.

ROIC 62

ROIC Balanced Scorecard Metrics McKinsey 62

Harvard Business Review

MAY 24, 2017

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. Finding, developing, and retaining this talent is hard — so much so that the business press refers to a “war” for talent. Vincent Tsui for HBR. Measure it.

Human Capital 16

Human Capital Management Company ROCE 16

Harvard Business Review

APRIL 16, 2015

The results can be impressive: if your firm’s return on invested capital is 8% and you have an 8% cost of capital, a 1% improvement in ROIC will increase firm value by 19%. There are just two ways to increase ROIC: improve operating profit (by increasing revenues or cutting costs) or invest capital more wisely.

CEO 8

CEO ROIC Cost of Capital Merton 8

Harvard Business Review

MAY 28, 2018

Nikon, the legendary Japanese camera maker, provides a textbook study in how smart managers can work with strategic investors to transform a struggling business. It also called for streamlining headquarters and cutting executive management’s compensation. Heini Wehrle/BIA/Minden Pictures/Getty Images.

Company 12

Company ROIC CFO Restructuring 12

Harvard Business Review

DECEMBER 15, 2015

To borrow a telecom industry metaphor, a deal with a customer is the “last mile” in connecting any strategy with business development efforts and marketplace results. This is ineffective deal management, and it eventually leads to loss of positioning with customers, and, over time, the nurturing of “commodity competencies.”

Strategy 8

Strategy Team Discount ROIC 8