Organisational behaviourKPI / metricTraining return on investmentHow should training return on investment be measured and interpreted?Answer the performance question: “How effective is our training in driving business results?”
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Organisational behaviourKPI / metricTraining return on investmentHow should training return on investment be measured and interpreted?Answer the performance question: “How effective is our training in driving business results?”
FinanceKPI / metricReturn on investment (ROI)How should return on investment (roi) be measured and interpreted?Answer the key performance question: “How well are we generating sustainable profits?”
OperationsKPI / metricReturn on innovation investment (ROI2)How should return on innovation investment (roi2) be measured and interpreted?Answer the key performance question: “To what extent are our investments in innovation generating a return?”
FinanceKPI / metricReturn on equity (ROE)How should return on equity (roe) be measured and interpreted?Answer the key performance question: “How efficiently are we using the investments that shareholders have made to generate profits?”
FinanceKPI / metricReturn on capital employed (ROCE)How should return on capital employed (roce) be measured and interpreted?Answer the key performance question: “How well are we generating earnings from our capital investments?”
FinanceFramework / modelTotal shareholder return (TSR)How can total shareholder return (tsr) support strategic choice or positioning?Answer the performance question: “To what extent are we delivering value to shareholders?”
StrategyKPI / metricMaking the strategic investment decisionHow should making the strategic investment decision be measured and interpreted?Use this approach when you must choose among strategic alternatives with different costs, benefits, timing and risks. Use payback only as a screening method when a full discounted cash flow analysis is disproportionate or unavailable.
FinanceKPI / metricReturn on assets (ROA)How should return on assets (roa) be measured and interpreted?Answer the key performance question: “To what extent are we able to generate profits from the assets we control?”
FinanceFramework / modelInvestment stagesHow can investment stages improve people, teams, or organisational effectiveness?Use the model when financing a new venture, scaling an established business or screening an investment opportunity. Early ventures often lack collateral, predictable cash flow and operating evidence, while later stages may qualify for a broader mix of equity, debt and strategic funding.
People & OrganisationDecision guideMarketing investment priority canvasWhere should early marketing investment go based on product maturity, customer, and growth motion?Use the marketing investment priority canvas when several reasonable paths exist in marketing and communications, the trade offs cannot all be removed, and the decision needs to be explained later. Agree how customer, product market fit, and acquisition motion will be judged before advocating an option.
FinanceFramework / modelBond valuationWhen and how should bond valuation be applied?To estimate a bond’s value when considering a purchase or sale.
FinanceFramework / modelTime value of moneyWhen and how should time value of money be applied?Compare personal investments or financing choices.
InnovationProcess / methodHype cycleHow can hype cycle support strategic choice or positioning?Use a Hype Cycle to structure discussion about an emerging technology’s evidence, maturity, uncertainty and possible timing. It can inform the scale and type of learning investment, but it cannot by itself predict returns or determine when to buy.
FinanceFramework / modelCapital asset pricing modelHow can capital asset pricing model support strategic choice or positioning?To estimate the required return or discount rate for a security, such as a company’s shares.
FinanceFramework / modelRisk–reward analysisHow can risk–reward analysis support strategic choice or positioning?Use the analysis when several materially different initiatives compete for capital, capacity or management attention. It can support a rapid executive discussion or a detailed process involving market research, return on investment estimates, scenarios and sensitivity analysis.
FinanceFramework / modelDiscounted cash flow (DCF) and net present value (NPV)How can discounted cash flow (dcf) and net present value (npv) support strategic choice or positioning?Use DCF and NPV in capital budgeting and investment appraisal to decide:
FinanceFramework / modelEconomic value added (EVA) and weighted average cost of capital (WACC)How can economic value added (eva) and weighted average cost of capital (wacc) improve people, teams, or organisational effectiveness?EVA brings two principles into investment and operating decisions:
FinanceKPI / metricCustomer profitability analyticsHow should customer profitability analytics be measured and interpreted?Use this analysis continuously to understand where customer value is being created, and give it particular attention when revenue is falling, costs are rising or margins are under pressure. It can reveal whether the problem comes from customer mix, acquisition channels, service demands, pricing or operational cost.
OperationsFramework / modelMonte Carlo simulationHow can monte carlo simulation support strategic choice or positioning?Use Monte Carlo simulation when several uncertain inputs interact and a decision depends on the range, likelihood or tail of resulting outcomes.
FinanceTemplate / formPricing readiness checklistHave product, finance, legal, operations, billing, sales, and customer implications of a price been addressed?
OperationsTemplate / formStrategic-priority recovery planWhat actions, decisions, and support will return a high-impact priority to a healthy trajectory?
FinanceTheory / principleReal options theoryWhen and how should real options theory be applied?Use real options reasoning when outcomes are uncertain, management can respond to future information, the response has material economic value and the initial decision affects whether that flexibility remains available. It is especially useful when a conventional discounted cash flow or net present value calculation treats management as passive and therefore misses the value of staged commitment.
FinanceFramework / modelCapital budgetingWhen and how should capital budgeting be applied?To decide whether a proposed long term investment is expected to create value.
MarketingFramework / modelBrand auditHow can brand audit support strategic choice or positioning?To diagnose and improve brand strength.
MarketingFramework / modelMarket sizingHow can market sizing support strategic choice or positioning?To estimate the volume and value of an existing or potential market.
StrategyKPI / metricDeliberate and emergent strategy (Mintzberg)How should deliberate and emergent strategy (mintzberg) be measured and interpreted?Use the distinction when the market is changing faster than the planning cycle, when frontline teams are discovering opportunities that senior leaders did not foresee, or when actual investment and operating decisions no longer match the formal plan. It is also valuable during a strategy review because it separates three questions that are often confused: What did we intend? What did we actually do? What should we now choose to continue?
StrategyFramework / modelBusiness model canvasHow can business model canvas support strategic choice or positioning?Use the canvas when a group needs to understand how a business works as a whole rather than discuss products, customers, operations and economics in isolation. It is particularly useful for:
StrategyFramework / modelIdentifying key segmentsHow can identifying key segments support strategic choice or positioning?Use segmentation whenever strategy is being developed or refreshed. Without it, market research, competitor analysis and capability investment may be aimed at an economically marginal part of the business.
FinanceFramework / modelCustomer lifetime valueWhen and how should customer lifetime value be applied?Use it to estimate the economic contribution of a customer over the relationship.FinanceFramework / modelCapital asset pricing model (CAPM)How can capital asset pricing model (capm) support strategic choice or positioning?Use CAPM when a decision requires a transparent estimate of the return appropriate to market risk. Owners and external investors can use it to assess whether a prospective equity return compensates for that risk. Corporate finance teams use it to estimate the cost of equity, while banks, pension funds and other institutional investors use its logic in portfolio and valuation work.
FinanceFramework / modelValue-based managementHow can value-based management support strategic choice or positioning?Use VBM to set goals, evaluate strategy and performance, allocate capital, design incentives, communicate with investors and value businesses or projects. Traditional accounting measures such as earnings per share or return on equity can report profit without charging fully for the opportunity cost of invested capital. VBM makes that charge explicit.
StrategyKPI / metricProfit from the core (Zook)How should profit from the core (zook) be measured and interpreted?Use the framework whenever a growth strategy appears to be drifting away from the customers, capabilities, channels or economics that give the company an advantage.
FinanceKPI / metricPrice/earnings ratio (P/E ratio)How should price/earnings ratio (p/e ratio) be measured and interpreted?Answer the performance question: “How does the market value this company relative to its earnings?”
AccountingKPI / metricRatio analysisHow should ratio analysis be measured and interpreted?Compare a company with carefully selected peers or relevant industry ranges.
FinanceFramework / modelBlack-Scholes options pricing modelHow can black-scholes options pricing model support strategic choice or positioning?To estimate a theoretical value for European options traded in financial markets.
FinanceFramework / modelActivity-based costingWhen and how should activity-based costing be applied?ABC is particularly useful when overhead is substantial and products or customers vary widely in complexity and handling requirements. By tracing indirect expenditure to the activities that generate it, the method makes those costs more directly attributable. This greater precision can expose opportunities to improve process effectiveness and efficiency while clarifying the true cost of an offer.
FinanceFramework / modelWeighted average cost of capitalWhen and how should weighted average cost of capital be applied?Select a discount rate for valuing a business or a project with risk comparable to the company’s existing operations.
FinanceKPI / metricNet profitHow should net profit be measured and interpreted?Answer: “To what extent are we generating bottom line results?”
FinanceKPI / metricCAPEX to sales ratioHow should capex to sales ratio be measured and interpreted?Use the ratio to ask: “How much are we investing in future capacity relative to our sales and competitors?”
FinanceKPI / metricFinancial ratio analysis: liquidity, solvency and profitability ratiosHow should financial ratio analysis: liquidity, solvency and profitability ratios be measured and interpreted?Review ratios as part of regular management reporting and whenever an investment, financing decision or strategic initiative could materially change the financial position.
FinanceFramework / modelDuPont schemeHow can dupont scheme support strategic choice or positioning?Use the scheme to benchmark comparable companies and explain why one earns a different return. It also supports scenario analysis by showing how a proposed change in price, cost, working capital, fixed assets or financing would flow through to the final ratio.
FinanceFramework / modelModigliani-Miller theoremHow can modigliani-miller theorem support strategic choice or positioning?To introduce capital structure reasoning and expose its assumptions.
StrategyFramework / modelFour cornersHow can four corners support strategic choice or positioning?To examine the strategy and likely reactions of a significant competitor.
OperationsFramework / modelPolarity managementHow can polarity management improve people, teams, or organisational effectiveness?Use the technique when a recurring problem returns after the organisation swings to the apparent opposite solution.
AccountingFramework / modelThe DuPont identityHow can the dupont identity support strategic choice or positioning?Diagnose a company’s financial performance.
StrategyFramework / modelDistinctive capabilities (Kay)How can distinctive capabilities (kay) support strategic choice or positioning?Use the model in corporate or business strategy to identify capabilities that can produce defensible value and deserve focused investment.
FinanceMatrix / portfolioModern portfolio theoryHow can modern portfolio theory support strategic choice or positioning?To structure discussion of asset allocation and diversification.
StrategyKPI / metricStrategic bets (Burgelman and Grove)How should strategic bets (burgelman and grove) be measured and interpreted?Evaluate both the potential benefit and the total exposure of a major investment. Costs can be committed and irreversible even when the hoped for benefit never arrives.