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High Expectations: Managing For Value In The Automotive Industry

Chief Executive

Since shareholder value is driven by investor expectations of future cash flow and EP growth (See S&P 500 Warranted Value of Discounted Economic Profits vs. Actual Traded Value chart, below), EP has been used as the profitability metric for AlixPartners’ Automotive Value Creation study.

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How to Build Employee Connection and 12 Ways to Build One

Vantage Circle

There are only three measurements that tell you nearly everything you need to know about your organization’s overall performance: employee engagement, customer satisfaction, and cash flow. For example, The Wells Fargo scandal resulted in a $185 million fine by the Consumer Financial Protection Bureau (CFPB) in 2016.

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How Incentives for Long-Term Management Backfire

Harvard Business Review

Another company, in the agricultural technology sector, chose free cash flow as the primary long-term incentive measure. Facing headwinds to growth, executives delayed R&D and capital investments to hit three-year free-cash-flow goals. Eventually, the company’s share price nosedived.

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How U.S. Hospitals and Health Systems Can Reverse Their Sliding Financial Performance

Harvard Business Review

Since the beginning of 2016, the financial performance of hospitals and health systems in the United States has significantly worsened. MD Anderson Cancer Center lost $266 million on operations in FY 2016 and another $170 million in the first months of FY 2017. All these problems contribute to diminished cash flows.

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How Companies Can Use Investors to Their Advantage

Harvard Business Review

By 2016, the rise of smart phones seemed to have made the company less relevant: Its revenues were at almost the same level they had been a full decade earlier. Yet investors can be a powerful strategic resource, providing not only capital but also less-biased insight into the threats and opportunities that a company encounters.

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What GE’s Board Could Have Done Differently

Harvard Business Review

Since Immelt’s departure, GE’s stock is down another 30%, as its new CEO, John Flannery, has struggled to cope with the cash flow drain from years of problematic acquisitions, divestitures, and buybacks. Because of these dubious decisions, GE’s ratio of debt to earnings has soared from 1.5 in 2013 to 3.7

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The End-of-Quarter Sales Rush Costs Companies Money

Harvard Business Review

companies over nine consecutive quarters (Q1 2014 through Q1 2016). InsideSales Labs, a division of our company, InsideSales.com, recently conducted research analysis on 9.8 million sales transactions from the anonymized data of 151 U.S. Collectively, these companies annually sold a combined $54 billion, averaging $360 million each.

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