Remove Innovation Remove Net Present Value Remove Operations
article thumbnail

How to Choose the Ideas Your Company Should Invest In

Harvard Business Review

In The Innovator's Guide to Growth we suggested that companies should create one-page "Idea Resumes" that capture the essence of an idea on a single PowerPoint slide. If you don't have an innovation strategy , go and create one.). Note what isn't part of the decision: an idea's net present value or return on investment.

Company 16
article thumbnail

Only the CEO Can Make the Big Bets

Harvard Business Review

This blog was written with Jay Terwilliger and Mark Sebell, managing partners at Creative Realities , a Boston-based innovation management collaborative. But did you ever see it as the central metaphor for what truly innovative organizations must do? And using net-present-value estimates for "beginning" ideas is nuts.

CEO 14
Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

Rethinking Valuation So You Don't Miss a Good Deal

Harvard Business Review

The other is a process called Opportunity Engineering (OE) that instills a different way to look at value. Horizon 1 (H1) represents the current core operations of a company that produce the cash flow needed to sustain operations, to meet investor expectations, and to invest in future growth.

NPV 15
article thumbnail

Hospital Budget Systems Are Holding Back Innovation

Harvard Business Review

The audience for such innovation wants to be receptive: A recent American Hospital Association (AHA) survey found that 75% of senior hospital executives endorsed the importance of digital innovation. Yet, despite their stated enthusiasm, hospitals have been notoriously slow to adopt digital innovations. health care system.

article thumbnail

How to Quantify Sustainability’s Impact on Your Bottom Line

Harvard Business Review

Specifically, our analysis found that the net benefits to ranchers ranged from $18 million to $34 million (12% to 23% of revenues) in net present value projected over 10 years. For slaughterhouses and retailers (Brazilian operations), we also projected positive benefits: $20 million to $120 million (0.01% to 0.1%

article thumbnail

Why We Need to Update Financial Reporting for the Digital Era

Harvard Business Review

Business students have traditionally considered net present value, payback period, and hurdle rates as necessary tools to determine which project to select. Furthermore, the operating managers cannot take their eyes off day-to-day operations to focus on innovation.

Report 8
article thumbnail

Stop Focusing on Profitability and Go for Growth

Harvard Business Review

In these circumstances, strategies that generate faster growth create more value for most companies than those that improve profit margins. The Refresher: Net Present Value. Some focus their best people on finding ways to squeeze out more profitability from existing operations, rather than creating new businesses.

ROE 15