Bennett Stewart is an expert in shareholder value and corporate performance management, and CEO of EVA Dimensions, a financial technology firm that provides software tools, databases and training and support packages that help companies to test and automate Best-Practice EVA, and investors to earn excess returns alpha. This article was excerpted with permission from the publisher, John Wiley & Sons, from “Best-Practice EVA” (March 2013).
Every business leader needs a way to amplify his or her business instincts and galvanize a team of players to win. The bad news is, conventional financial metrics will inevitably mislead business leaders and their teams into making suboptimal decisions that leave a lot of value on the table because all the measures have blind spots — they hide the truth or tell half-truths.
Earnings, for instance, can easily be inflated with balance sheet investments that don’t earn a decent return, and ROI-fixated companies will limit investments to the highest returns and forfeit lots of profitable growth opportunities that would increase the firm’s value.…
Can a manager be an effective coach? Some (often, professional coaches) say that they can’t and shouldn’t, because they have too much of a vested interest in the outcome of the coaching and couldn’t possibly be neutral enough to hold back on their opinions.
Then again, a lot of managers think they are already coaching when what they are really doing is a lot of teaching, advising and telling — or, worst case, micromanaging (think Pointy Haired Boss from “Dilbert”). They use the phrase “coaching” to describe just about any conversation they have with an employee.
Both are valid positions. It all depends on how you define what “coaching” is. I like to think of it as the skill and art of helping someone improve their performance and reach their full potential. There is a spectrum of coaching skills — from directive (teaching, advising, giving feedback, offering suggestions), to asking questions and listening — the real magic of coaching is when the coach takes a more non-directive approach (asking questions and listening) and the person can solve his or her problems.…
Prudential Investments Mutual Funds, part of Prudential Financial, spends a lot of time providing thought leadership with input from Prudential Financial’s affiliated institutional managers. A topic it has recently given much attention to is fixed-income choices in defined-contribution (DC) plans. In 2012, Prudential Investments Mutual Funds published the white paper, Insights on Investing: Fixed Income Options within DC Plans, for the purpose of initiating dialogue with advisors and consultants.
In this three-part blog series sponsored by Prudential, we will examine how fixed income can enhance retirement menus. This interview was originally published in the November 2012 issue of Financial Advisor magazine.
In today’s Part 1, the experts explain why offering a wider selection and variety of fixed-income choices to DC plan menus can potentially provide higher returns, greater diversification and less volatility to retirement portfolios.
Part 2 of the interview will look at ways to construct a better portfolio.
Part 3 of the interview will explain how financial advisors can help in this effort.…