558: Founder of McKinsey's Strategy and Corporate Finance Insights Team on Measuring and Managing the Value of Companies

558: Founder of McKinsey's Strategy and Corporate Finance Insights Team on Measuring and Managing the Value of Companies

In this episode, Tim Koller, co-author of Valuation and a leading authority on corporate finance, offers a substantive examination of capital allocation decisions under real-world constraints. The discussion moves beyond theory to explore how CEOs and CFOs should approach resource deployment in mature, capital-rich companies—where investment opportunities are limited not due to lack of ambition but due to economic reality.

Key insights include:

- Share Buybacks as Rational Policy: Many firms undertaking significant buybacks—particularly in tech, life sciences, and consumer products—do so because they generate more cash than they can reinvest profitably. Koller argues that, in such cases, returning excess capital to shareholders is not a sign of strategic failure but of disciplined decision-making.

- The Fallacy of Diversification Without Advantage: Koller highlights repeated failures by capital-rich companies that expand into unrelated sectors to deploy cash, citing historical missteps in energy, utilities, and industrials. He emphasizes the need to assess whether the firm has a genuine competitive advantage before moving beyond its core business.

- Granular Leadership in Resource Allocation: Effective CEOs are directly engaged with capital allocation at the business-unit level. Delegating such decisions without maintaining enterprise-wide oversight often leads to underinvestment in high-return growth areas and misaligned incentives at the divisional level.

- The Perils of Uniform Cost-Cutting Mandates: Broad directives to improve margins often result in cuts to product development and customer experience—leading to long-term degradation despite short-term financial gains. Koller stresses the importance of distinguishing between cost efficiencies that enhance value and those that erode it.

- Timing and Judgment in Capital Deployment: In cyclical, capital-intensive sectors such as chemicals and energy, building capacity in sync with competitors can destroy value. Koller calls for contrarian timing, grounded in independent analysis, even when boards and markets are predisposed to follow the cycle.

Additional themes include the underuse of postmortems in capital projects, the misalignment between project planners and operators, and the distinction between executional and experimental failure. Throughout, Koller reiterates that sound capital allocation depends not only on financial modeling, but also on institutional learning, leadership judgment, and clarity of strategic intent.

This conversation offers practical, senior-level guidance for executives, board members, and investors who must navigate capital planning amid structural constraints, investor pressures, and organizational complexity.

Get Tim's book here: https://shorturl.at/nk7Z9

Valuation: Measuring and Managing the Value of Companies

Here are some free gifts for you:

Overall Approach Used in Well-Managed Strategy Studies free download: www.firmsconsulting.com/OverallApproach

McKinsey & BCG winning resume free download: www.firmsconsulting.com/resumepdf

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163: Is it a good time now or should I wait until I become more senior? Author Program Q&A 2.

163: Is it a good time now or should I wait until I become more senior? Author Program Q&A 2.

Learn more and see the application guidelines: https://www.firmsconsulting.com/experts-published-author-program/ Apply: email team@firmsconsulting.com This is the 1st of a 10 episode program to help our clients and customers measurably, radically transform their careers through The Author Program. How would your career, reputation, and earnings change as a published author? Imagine your client interactions when potential and current clients saw your thinking in a published book before they met you? Imagine the time you would save not having to explain your ideas and the value you could add to them? Imagine the fee premium you could earn? Imagine avoiding awkward meetings trying to establish your credibility? Imagine how many potential clients would find you and reach out to you? Enjoying our podcast? Get access to sample advanced training episodes here: www.firmsconsulting.com/promo

24 Heinä 20217min

162: Is this good for my career at this point in time? Author Program Q&A 1.

162: Is this good for my career at this point in time? Author Program Q&A 1.

Learn more and see the application guidelines: https://www.firmsconsulting.com/experts-published-author-program/ Apply: email team@firmsconsulting.com This is the 1st of a 10 episode program to help our clients and customers measurably, radically transform their careers through The Author Program. How would your career, reputation, and earnings change as a published author? Imagine your client interactions when potential and current clients saw your thinking in a published book before they met you? Imagine the time you would save not having to explain your ideas and the value you could add to them? Imagine the fee premium you could earn? Imagine avoiding awkward meetings trying to establish your credibility? Imagine how many potential clients would find you and reach out to you? Enjoying our podcast? Get access to sample advanced training episodes here: www.firmsconsulting.com/promo

22 Heinä 20217min

161: How publishing a book fast-tracked me to partnership

161: How publishing a book fast-tracked me to partnership

Learn more and see the application guidelines: https://www.firmsconsulting.com/experts-published-author-program/ Apply: email team@firmsconsulting.com This is the 1st of a 10 episode program to help our clients and customers measurably, radically transform their careers through The Author Program. How would your career, reputation, and earnings change as a published author? Imagine your client interactions when potential and current clients saw your thinking in a published book before they met you? Imagine the time you would save not having to explain your ideas and the value you could add to them? Imagine the fee premium you could earn? Imagine avoiding awkward meetings trying to establish your credibility? Imagine how many potential clients would find you and reach out to you? Enjoying our podcast? Get access to sample advanced training episodes here: www.firmsconsulting.com/promo

22 Heinä 202127min

160: Rob Barnett, Increase your hire-ability

160: Rob Barnett, Increase your hire-ability

Welcome to. Strategy Skills episode 160, an episode with Rob Barnett. Get Rob's new book here: https://amzn.to/3i9rMbo Rob Barnett is a headhunter, management executive, podcaster, entrepreneur and author of NEXT JOB, BEST JOB: A Headhunter's 11 Strategies to Getting Hired Now (Citadel, June 29, 2021. He founded Rob Barnett Media in 2018, an inclusive platform for thousands of job-seeking professionals and industry leaders, placing the right people in the best jobs. Rob has discovered, hired, and led hundreds of talented creators and executives in senior management roles at MTV, VH1, and Audible/Amazon. He was President of Programming at CBS Radio. A digital pioneer, he founded My Damn Channel, one of the first original online studios and networks. Representing diverse careers, companies, and opportunities, Rob's multi-platform content and no-nonsense approach inspires people to define and sell their best professional brand. Visit RobBarnettMedia.com.  NEXT JOB, BEST JOB. Rob Barnett: https://amzn.to/3i9rMbo Enjoying our podcast? Get access to sample advanced training episodes here: www.firmsconsulting.com/promo We use affiliate links whenever possible (if you purchase items listed above using our affiliate links, we will get a bonus).

14 Heinä 202154min

159: Ash Fontana, The AI-first company

159: Ash Fontana, The AI-first company

Welcome to. Strategy Skills episode 159, an episode with Ash Fontana on the future of AI. Ash just published a great book on AI, THE AI-FIRST COMPANY, please see a link below. THE AI-FIRST COMPANY: https://amzn.to/3zRYW7o Among other insights, Fontana shows readers how to: Make AI your company's first priority. Identify the most valuable data. Build AI teams. Create AI budgets. Integrate AI with existing processes. Measure its effectiveness. Reinvest the profits from automation to build a competitive advantage. About the Author Ash Fontana became one of the most recognized startup investors in the world after launching online investing at AngelList. He then became a Managing Director of Zetta Venture Partners, the first investment fund that focused on AI. The firm was the lead investor in category-defining AI companies such as Kaggle, Domino, Tractable, Lilt and Invenia. Enjoying our podcast? Get access to sample advanced training episodes here: www.firmsconsulting.com/promo We use affiliate links whenever possible (if you purchase items listed above using our affiliate links, we will get a bonus).

23 Kesä 20211h 3min

158: Location is leverage or proximity is leverage (Monday Morning 8 a.m. #29, part 3)

158: Location is leverage or proximity is leverage (Monday Morning 8 a.m. #29, part 3)

Hello everyone! This is Monday Morning 8 a.m., a weekly newsletter where we distill the insights from all of the distractions, articles, and emails that you receive in your inbox every day. In this newsletter, we're going to focus on four major themes from last week's news. To listen to the audio version of this newsletter, search for "Strategy Skills" in any podcast app. To get a written copy with links to mentioned articles sign up here: www.firmsconsulting.com/promo To get a copy of some of the previous issues you might have missed, get the Strategy Insights book. If you love Strategy Insights and support it with reviews on Goodreads and Google Play (and support on Amazon is very much appreciated) by May 30th 2021, please email support@firmsconsulting.com as we will be sending 1-month access to the accompanying course as a gift to members who loved and supported the book with reviews. P.S. If you want to support the Monday Morning 8 a.m. and our other work, there are many ways you can do that, including reviews on iTunes / Amazon / Goodreads / app, purchasing our memberships / books, applying to join our prelaunch team, or just spreading the word. Some links above are affiliate links. As an Amazon Associate, we earn from qualifying purchases.

26 Touko 202115min

157: Google, Apple, Microsoft, Amazon and Facebook's AI advantage (Monday Morning 8 a.m. #29, part 2)

157: Google, Apple, Microsoft, Amazon and Facebook's AI advantage (Monday Morning 8 a.m. #29, part 2)

Hello everyone! This is Monday Morning 8 a.m., a weekly newsletter where we distill the insights from all of the distractions, articles, and emails that you receive in your inbox every day. In this newsletter, we're going to focus on four major themes from last week's news. To listen to the audio version of this newsletter, search for "Strategy Skills" in any podcast app. To get a written copy with links to mentioned articles sign up here: www.firmsconsulting.com/promo To get a copy of some of the previous issues you might have missed, get the Strategy Insights book. If you love Strategy Insights and support it with reviews on Goodreads and Google Play (and support on Amazon is very much appreciated) by May 30th 2021, please email support@firmsconsulting.com as we will be sending 1-month access to the accompanying course as a gift to members who loved and supported the book with reviews. P.S. If you want to support the Monday Morning 8 a.m. and our other work, there are many ways you can do that, including reviews on iTunes / Amazon / Goodreads / app, purchasing our memberships / books, applying to join our prelaunch team, or just spreading the word. Some links above are affiliate links. As an Amazon Associate, we earn from qualifying purchases.

25 Touko 20219min

156: 7-Eleven's inconvenient truth about convenience (Monday Morning 8 a.m. #29, part 1)

156: 7-Eleven's inconvenient truth about convenience (Monday Morning 8 a.m. #29, part 1)

Hello everyone! This is Monday Morning 8 a.m., a weekly newsletter where we distill the insights from all of the distractions, articles, and emails that you receive in your inbox every day. In this newsletter, we're going to focus on four major themes from last week's news. To listen to the audio version of this newsletter, search for "Strategy Skills" in any podcast app. To get a written copy with links to mentioned articles sign up here: www.firmsconsulting.com/promo To get a copy of some of the previous issues you might have missed, get the Strategy Insights book. If you love Strategy Insights and support it with reviews on Goodreads and Google Play (and support on Amazon is very much appreciated) by May 30th 2021, please email support@firmsconsulting.com as we will be sending 1-month access to the accompanying course as a gift to members who loved and supported the book with reviews. P.S. If you want to support the Monday Morning 8 a.m. and our other work, there are many ways you can do that, including reviews on iTunes / Amazon / Goodreads / app, purchasing our memberships / books, applying to join our prelaunch team, or just spreading the word. Some links above are affiliate links. As an Amazon Associate, we earn from qualifying purchases.

24 Touko 202110min

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