ISBN 9781422136553,Innovation Killers

Innovation Killers



Harvard University Press

Publication Year 2010

ISBN 9781422136553

ISBN-10 1422136558

Paper Back

Number of Pages 49 Pages
Language (English)

Business & management

Most companies aren't half as innovative as their senior executives want them to be (or as their marketing claims suggest they are). What's stifling innovation? There are plenty of usual suspects, but the authors finger three financial tools as key accomplices. Discounted cash flow and net present value, as commonly used, underestimate the real future value of an investment. Comparing the cash flows from innovation against the default option--i.e., doing nothing--leaves innovation with an unfair disadvantage. So the emphasis on short-term earnings restricts their investments in innovative long-term growth opportunities. These are not bad tools and concepts in and of themselves, but the way they are used to evaluate investments creates a systematic bias against successful innovation. Instead, the authors recommend alternative methods that can help managers innovate with a much more astute eye for future value