Manage Costs to Advance Strategic Objectives

Controlling costs has become a necessity for every business in these difficult and uncertain times. But taking costs out of an organization carries significant risks as well as opportunities. How companies approach cost reductions now will help determine their financial health and competitive position when the recovery takes hold.

In this paper, Monitor’s Josh Lee and Karin Stawarky discuss how adaptive cost management empowers business leaders … [ Read more ]

Dynamic Strategy Implementation: Delivering on Your Strategic Ambition

Studies consistently show that most strategies fail in the implementation phase. The root of the problem can be traced to three factors: a failure of translation, a failure of adaptation, and a failure to sustain change over the long term. A dynamic approach to strategy implementation overcomes the limitations of the traditional administrative approach that serves as a breeding ground for these failures. In this … [ Read more ]

Amelia Dunlop, Vincent Firth, and Robert Lurie

Dynamic strategy implementation requires a different response to problems that arise in implementation. The traditional approach adopts a “heads-down” mentality, focusing solely on the question of “How can we get back on track?” and throwing additional resources at the problem until it is resolved. In contrast, the dynamic approach calls for greater attention to understanding “What should we learn from the fact that we are … [ Read more ]

A Strategic Approach to Overhead Management

The average company spends 23 cents out of every dollar of revenue on overhead, yet most firms lack a plan or system for managing the spending for greater value. Managerial attention to overhead tends to be sporadic and is often driven by the need to cut costs in the near-term. Even if short-term cost reductions are achieved, companies then find themselves tied to a roller-coaster … [ Read more ]

Exploring and Learning from the Future: Five Steps for Avoiding Strategic Surprises

Why do organizations get blindsided by market transformations that could have been anticipated? After all, scenario planning has been a widely used strategic management tool for decades and most managers are familiar with the process of considering how they would operate in alternative futures. The reason most organizations get surprised by game-changing events, in my experience, is not that their planning methods are bad. The … [ Read more ]

Building a World-Class Pricing Capability: Where Does Your Company Stack Up?

Monitor recently conducted a benchmarking study of more than 200 companies. The study sought to measure the impact of pricing strategy and pricing execution on profitability and revenue growth. The results provide compelling evidence that the ability to manage pricing strategically can be a source of competitive advantage that drives superior financial performance.

How Hot Is Your Next Innovation?

Choosing which innovative ideas to pursue is often an exercise in guesswork. But by using existing management tools in a new way, executives can effectively gauge an innovation’s potential along two crucial dimensions: Can it withstand market pressures from competitors? And can it deliver more economic value to customers than alternatives?

In this article for Harvard Business Review, Monitor partner Geoff Tuff outlines this distinctive approach: … [ Read more ]

Don’t Just Set Prices, Manage them Strategically

How much should a company charge for its products or services? Many companies don’t know how to answer this question, and instead let customers and competitors drive their pricing decisions. To keep prices consistent and profitable, companies need to adopt a consistent pricing structure. By strategically managing price structure, the pricing process, and value-based communications, companies can achieve greater profits.

T.E. Copeland

The best measure for performance is to look at the discounted cash flow model of a company. The comparison of the economic profits relative to the expectations of economic profit is a one period measure, while the discounted cash flows attempt to look at the performance of the company over many time periods into the future. I have found that when I correlate the discounted … [ Read more ]

T.E. Copeland

if you use earnings per share or the gross earnings per share you completely ignore any information about balance sheet management. Consequently, companies that focus on earnings are relatively inefficient in the way that they manage their balance sheet. It actually does make a difference whether you generate one dollar of earnings with one dollar of capital or generate the same dollar of earnings with … [ Read more ]

T.E. Copeland

Real options are an emerging field of financial engineering that in my opinion will completely replace net present value in the next 10 years. The reason is that net present value is a flawed model for evaluating projects. The problem is that managers who experience these decisions know that that approach is full of implied assumptions that are rigid or even wrong. For example, if … [ Read more ]

New Developments in Valuation: An interview with Tom Copeland

One of the most eminent authorities in the field of valuation is Tom Copeland, not least because of the fact that he is the co-author of the standard work in the field of valuation. Professor Copeland is the most appropriate person to ask which subjects are currently under discussion in the field of finance and financing. Are fundamental changes taking place or are the developments … [ Read more ]

So,why be public?

This is a question more and more companies have been asking. Many of the traditional advantages of being public are no longer valid, and the mounting costs all the more obvious.