Home » Corporate Finance » Performance

Recent Thinking

Featured Corporate Finance, Performance Article, way to understand TRS
A better way to understand TRS

July 2008

Traditional methods of analyzing total returns to shareholders are flawed. There’s a better way.

Featured Corporate Finance, Performance Article, managing capital projects asia
Managing capital projects: Lessons from Asia

July 2008

Some Asian companies are better at executing capital projects than are rivals elsewhere. What lessons can others learn from them?

Featured Corporate Finance, Performance Article, Communicating with right investors
Communicating with the right investors

April 2008

Executives spend too much time talking with investors who don’t matter. Here’s how to identify those who do.

The Archive

2008
Starting up as CFO

March 2008

There are a few critical tasks that all finance chiefs must tackle in their first hundred days.

2007
Building a competitive finance function: An executive roundtable

December 2007

By focusing on talent development, new roles for finance, and creative benchmarks, CFOs can deliver a competitive advantage to their companies.

The CFO’s first hundred days: A McKinsey Global Survey

December 2007

Chief financial officers around the world describe their first hundred days on the job as a time when most received guidance, but many had difficulty devoting enough time to their top priorities.

When to break up a conglomerate: An interview with Tyco International’s CFO

October 2007

Chris Coughlin explains how spinning off some of the company’s largest businesses was the key to ensuring its long-term growth.

How to choose between growth and ROIC

September 2007

Investors reward high-performing companies that shift their strategic focus prudently, even if that means lower returns or slower growth.

A quiet revolution in China’s capital markets Premium Content

July 2007

Reforms that attracted little attention in the Western world mark a major step forward in the modernization of China’s capital markets.

Preempting hostile takeovers Premium Content

July 2007

Companies that stick to valuation basics can capture any value that would make them attractive for takeover bids.

Getting more out of offshoring the finance function

April 2007

Companies aren't getting the most out of their offshoring programs. Key design changes would help.

Preparing for the next downturn

April 2007

In a buoyant economy, the next recession seems far off. But managers who prepare during good times can improve their companies' chances to endure—or thrive in—the eventual downturn.

The elusive goal of corporate outperformance

April 2007

Few large global companies outperform their competitors on both revenue growth and profitability over a decade. Do those that do have anything else in common?

The new dynamics of managing the corporate portfolio

April 2007

As investors demand that companies actively manage their business portfolios, executives must increasingly balance investment opportunities against the capital that's available to finance them.

What's ahead for business in Brazil

April 2007

The economy is more stable that it's been in quite a while, and many industries are riding high—for the time being.

Living with the limitations of success

March 2007

Once companies reach a certain size, setting realistic performance aspirations gets a bit trickier.

The new metrics of corporate performance: Profit per employee

February 2007

Most measurements of performance are geared to the needs of 20th-century manufacturing companies. Times have changed. Metrics must change as well.

Why accounting rules shouldn't drive strategy Premium Content

February 2007

When changes in accounting rules provide no new information, they don't register with investors. Nor should they lead managers to shift focus.

What public companies can learn from private equity

January 2007

Public companies will need to raise their governance game if they are to compete with private firms.

2006
Leading change: An interview with the CEO of Deere & Company

December 2006

Bob Lane details the steps his company took to engage the whole organization in an operational and cultural transformation.

When should CFOs take the helm?

November 2006

CFOs can bring much-needed skills to the CEO role, but the career path isn’t always a direct one.

Creating value: The debate over public vs. private ownership Premium Content

October 2006

A panel of executives explores why private equity has been giving public ownership such a run for its money.

Inside a hedge fund: An interview with the managing partner of Maverick Capital Premium Content

April 2006

What should a company do when a hedge fund shows up among its investors?

Toward a leaner finance department

April 2006

Borrowing key principles from lean manufacturing can help the finance function to eliminate waste.

Balancing ROIC and growth to build value Premium Content

March 2006

Companies find growth enticing, but a strong return on invested capital is more sustainable.

The misguided practice of earnings guidance Premium Content

March 2006

Companies provide earnings guidance with a variety of expectations—and most of them don't hold up.

Weighing the pros and cons of earnings guidance : A McKinsey Survey

March 2006

Most companies plan to continue providing investors with frequent earnings guidance, though executives disagree about its costs and benefits.

A long-term look at ROIC Premium Content

February 2006

Finance theory isn't enough when companies set their expectations for reasonable returns on invested capital. A long-term analysis of market and industry trends can help.

2005
Comparing performance when invested capital is low Premium Content

October 2005

Return on capital is the benchmark for comparing performance between businesses. But new math is needed when a company’s capital intensity is low.

Measuring stock market performance

October 2005

TRS doesn’t reflect a company's performance or health. What does?

Leading a turnaround: An interview with the chairman of D&B Premium Content

May 2005

Allan Loren explains how he delivered double-digit earnings growth during each of the past four years and raised the company's value by more than 300 percent.

How to escape the short-term trap Premium Content

April 2005

Markets may expect solid performance over the short term, but they also value sustained performance over the long term. How can companies manage both time frames?

Managing value and performance

March 2005

Maximizing the value of companies means attending not only to their short-term performance but also to their long-term health.

Measuring long-term performance

March 2005

Earnings per share and share prices aren’t the whole story—particularly in the medium and long term.

Finance 2.0: An interview with Microsoft's CFO

February 2005

Microsoft is paying cash to shareholders, stressing transparency in its diverse businesses, and embracing Sarbanes-Oxley. Before announcing his departure in early 2005, CFO John Connors talked with The McKinsey Quarterly about why.

How private equity firms can play in China

February 2005

Given the difficulties of doing business there, direct investment in Chinese companies isn’t always the best option.

Why some private equity firms do better than others

February 2005

Investments don’t govern themselves; active ownership is the answer.

2004
The scrutable East Premium Content

November 2004

Valuations are linked to growth. So why are they lower in high-growth markets in Asia?

Will high-tech CFOs adapt to slower growth? Premium Content

October 2004

Financial officers in the high-tech sector should learn to balance six roles to help guide companies into a more mature market.

Private equity's new challenge

August 2004

A changed competitive landscape calls for a different business model.

Putting value back in value-based management

March 2004

Value-based management programs focus too much on measurement and too little on the management activities that create shareholder value.

The CFO's central role

January 2004

Whether leading or supporting the effort, the CFO often ends up at the center of risk management.

Why the biggest and best struggle to grow Premium Content

January 2004

The largest companies eventually find size itself an impediment to creating new value. They must recognize that not all forms of growth are equal.

2003
Running with risk

November 2003

It’s good to take risks—if you manage them well.

Restructuring alliances in China

October 2003

Twenty-five years after alliances first paved the way into the world’s most dynamic emerging market, knowing how to structure them is more important than ever.

Getting what you pay for with stock options Premium Content

February 2003

Companies now have an opportunity to rethink their use of stock options so that they serve shareholders as well as executives.

The special challenge of measuring industrial company risk Premium Content

January 2003

Off-the-shelf tools from other sectors won’t work. What will?

2002
Measuring alliance performance Premium Content

October 2002

Large companies often have dozens of alliances—and little idea how they are performing. Here’s how to evaluate them.

The CFO guide to better pricing

October 2002

Cutting costs might get more attention, but improving pricing discipline can add more to the bottom line. Here’s how CFOs can lead the way.

Time for CFOs to step up Premium Content

June 2002

As investors home in on business fundamentals and credible accounting, the CFO’s traditional oversight of planning and performance takes on new urgency.

What makes your stock price go up and down Premium Content

May 2002

Identifying and understanding important individual investors can help corporate executives predict the direction of share prices.

2001
Prophets and profits

October 2001

Executives should be wary of bending strategy to suit the wayward long-term earnings forecasts of equity analysts.

Whither globalization ? Premium Content

October 2001

The war on terrorism may change the shape and pace of economic integration. But the fundamental human forces that drive it will not be dislodged.

Caveat vendor Premium Content

August 2001

Telecom-equipment suppliers extended billions in vendor financing to aggressive start-ups and wireless companies. Many of them are now struggling or bankrupt—and their suppliers are suffering, too.

2000
Managing expectations for value Premium Content

November 2000

An increasingly significant part of active value management involves generating long-term growth expectations. Unlike traditional performance metrics, growth value maps reflect their importance.

What is the market telling you about your strategy? Premium Content

June 2000

Market expectations are hard for managers to understand and even harder for them to change. But there are ways of doing both that are much more science than black magic.

Growth Down Under Premium Content

February 2000

These days, the share prices of many companies have a giant built-in growth premium. How does this play out among Australia's leading companies?

1998
The expectations treadmill Premium Content

August 1998

Good companies haven’t always been good investments. Total returns to shareholders may not necessarily be a good measure of management performance. How fast is your treadmill moving?

1996
Are you taking the wrong FX risk? Premium Content

February 1996

Focusing on transaction risks may be a mistake. Structural and portfolio risks require more than hedging. Companies need to understand—not just correlate—the relationship between foreign exchange movements and cashflows.

Why derivatives don’t reduce FX risk Premium Content

February 1996

For a hedging program to work, it must increase the “time to ruin.” The goal is to reduce the variability of cash flows. A new study shows that few companies succeed.

1994
Why value value? Premium Content

November 1994

An excerpt from the second edition of Valuation: Measuring and Managing the Value of Companies.

Member Log in

forgot password?