$1 Billion or the Future
A stalling business was given two options:
1. $1 billion dollar today
OR
2. The Future of the business (knowledge of what will happen in the future)
What will the business do? Which option will it take?
What would you do if you were given a choice of $10 Million today, or knowing your Future?
Would you take the money, and make a New Future?
OR
Would you find out everything about your Future and Relax?
What does this question have to do with Creativity and Innovation?
The Top 20 Innovators of The Innovation Index are always grappling with the question of what to do with the money they generate!!
Frequently though, the Innovators bow in to investor pressures and stock valuations, and use the money to buy back shares! This is clearly Not Innovation. Because the Future of the business is not secured by just buying back shares. The business needs money to invest and grow! Just buying back shares does not create the organic growth.
The other extreme is where Innovators use the cash too freely and go on a buying spree - "let's acquire a whole lot of companies, and integrate them into our core businesses." The efficiencies generated will pay for the costs over time, and if we get lucky, the acquisition will hit a home run! Too often, large acquisitions fail owing to overly optimistic projections about the Future, and lofty valuations produced by the M & A teams.
Then there are Innovators who generate too much cash from the existing business, and don't know what to do with it. They miss out on the changing landscape, the changing ecosystem of demand, the growth opportunities that they could have pursued, should have sought! These businesses pass on the cash through dividends to share holders, or often, sit on the cash, only to realize a few years down the road after knowing the Future that they should have used the cash to create new opportunities and innovations today, and used their creativity to create the Future with the available cash.
More often than not, the young companies (less than ten years old) maximize the use of cash to create new innovations and opportunities, and at times disruptive innovations. As the companies become old, they become conservative, and tend to minimize risks - even become risk averse. However, the top 20 Innovators of the Innovation Index strive to leverage the free cash flow, and use their potential to create new innovations and growth time and time again.
The bold companies who take risks and innovate make a new Future, every year.
1. $1 billion dollar today
OR
2. The Future of the business (knowledge of what will happen in the future)
What will the business do? Which option will it take?
What would you do if you were given a choice of $10 Million today, or knowing your Future?
Would you take the money, and make a New Future?
OR
Would you find out everything about your Future and Relax?
What does this question have to do with Creativity and Innovation?
The Top 20 Innovators of The Innovation Index are always grappling with the question of what to do with the money they generate!!
Frequently though, the Innovators bow in to investor pressures and stock valuations, and use the money to buy back shares! This is clearly Not Innovation. Because the Future of the business is not secured by just buying back shares. The business needs money to invest and grow! Just buying back shares does not create the organic growth.
The other extreme is where Innovators use the cash too freely and go on a buying spree - "let's acquire a whole lot of companies, and integrate them into our core businesses." The efficiencies generated will pay for the costs over time, and if we get lucky, the acquisition will hit a home run! Too often, large acquisitions fail owing to overly optimistic projections about the Future, and lofty valuations produced by the M & A teams.
Then there are Innovators who generate too much cash from the existing business, and don't know what to do with it. They miss out on the changing landscape, the changing ecosystem of demand, the growth opportunities that they could have pursued, should have sought! These businesses pass on the cash through dividends to share holders, or often, sit on the cash, only to realize a few years down the road after knowing the Future that they should have used the cash to create new opportunities and innovations today, and used their creativity to create the Future with the available cash.
More often than not, the young companies (less than ten years old) maximize the use of cash to create new innovations and opportunities, and at times disruptive innovations. As the companies become old, they become conservative, and tend to minimize risks - even become risk averse. However, the top 20 Innovators of the Innovation Index strive to leverage the free cash flow, and use their potential to create new innovations and growth time and time again.
The bold companies who take risks and innovate make a new Future, every year.
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