TY - JOUR
T1 - The Imagination Premium
T2 - an anticipative performance metric
AU - McGrath, Rita Gunther
AU - van Putten, Alex
AU - Pierantozzi, Ron
N1 - Publisher Copyright:
© 2021, Emerald Publishing Limited.
PY - 2021
Y1 - 2021
N2 - 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.
AB - 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.
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U2 - 10.1108/SL-03-2021-0028
DO - 10.1108/SL-03-2021-0028
M3 - Article
AN - SCOPUS:85111090661
SN - 1087-8572
VL - 49
SP - 2
EP - 10
JO - Strategy and Leadership
JF - Strategy and Leadership
IS - 3
ER -