Health elixirs and fountains of youth are the stuff of fantasy. But here is a claim you can bank.
Put your company on a strict diet of the best practices in EVA, and you’ll see muscle replace fat, and you’ll add speed and agility that can make a huge difference in how your company performs.
The quality of decisions will sharpen, plans will become more strategic, capital conscientiousness will take root, teamwork will spread, and a resolute commitment to achieve real operational improvements and innovative and profitable growth will become all pervasive.
In short, you’ll set the stage for generating a far higher shareholder return and growing a healthier, more robust company that is a more rewarding place to work.
It comes down to this: Make increases in real economic profit, or what I call EVA, for economic value added, your most important financial goal and decision rule. Use it for setting goals, grading and improving plans, measuring decisions, and motivating the team with bonus pay.
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