The Imagination Premium : an anticipative performance metric
Purpose: The authors offer a new metric for assessing a company's potential for growth that CEO's and leadership teams can actively manage. Design/methodology/approach: The Imagination Premium metric reflects the value of a company's equity, beyond what can be readily explained by its ability to throw off cash. Findings: For a CEO, TIP provides support for an argument that investments in future growth are well warranted. Practical/implications: A negative TIP signals that investors will not even pay for the capitalized value of current cash flow and this usually leads to activist investors, hostile acquisition threats and C-suite turnover. Originality/value: The article shows executives how to drive the premium investors will pay for corporate growth initiatives. One of the first things strategists can do to manage their company's TIP is a portfolio analysis that looks at how uncertain each current investment is, and whether the whole portfolio is one growth investors will reward with an increased TIP.
Year of publication: |
2021
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Authors: | McGrath, Rita Gunther ; van Putten, Alex ; Pierantozzi, Ron |
Published in: |
Strategy & Leadership. - Emerald, ISSN 1087-8572, ZDB-ID 2039442-1. - Vol. 49.2021, 3 (16.07.), p. 2-10
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Publisher: |
Emerald |
Saved in:
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