The value captor's process: getting the most out of your new business ventures

The high failure rate among new business ventures is usually chalked up to the fundamental uncertainty of the process. In actuality, say McGrath and Keil, flawed ways of assessing and managing ventures may account for the disappointing amount of value they generate. Instead of taking the go/no-go approach, whereby a project either advances toward launch or is killed, decision makers should consider a range of alternatives: recycling the venture by aiming it at a new target market; spinning it off to other owners or a joint venture; spinning it in to an established business unit; or salvaging useful elements such as technologies, capabilities, knowledge, and patents. Firms that excel in value extraction--the "value captors" whose practices and mind-set this article explores--have created formal processes to systematically mine successes, failures, and everything in between. They know that a venture should be treated like a scientific experiment, in which learning plays a critical role. They are ready to seize new opportunities if a venture falters on its original course. They foster networks to promote cooperation and collaboration between established business leaders and venture teams and involve people from throughout the company in the venture review process. They don't allow financial criteria to dominate the reviews, and they recognize that the best people to launch a business may not be the ones who developed the idea. If your innovation pipeline is dry, your promising projects are being strangled for lack of a speedy payback, or someone else has made a fabulous business out of a slightly altered idea that you abandoned, consider the value captor's path.     

Das europäische Verfahren zur Vermeidung und Korrektur von Leistungsbilanzungleichgewichten

The Macroeconomic Imbalance Procedure (MIP) is part of a institutional framework known as the so-called “sixpack“, which has come into effect on December 13th 2011 in response to the European financial and debt crisis. The crisis has shown that internal and external imbalances (in particular current account deficits) are strongly intertwined. The MIP should identify external imbalances at an early stage and thus compel countries to correct these imbalances to forestall potential crises. Methodological questions are discussed, which are to be resolved to ensure the effectiveness of the MIP.     

Wohnimmobilienpreise,Inflationsmessung und Geldpolitik im Euroraum

Wirtschaftsdienst - Die Niedrigzinspolitik der EZB hat in vielen Ländern des Euroraums zu einem starken Anstieg der Wohnimmobilienpreise beigetragen. In einigen Mitgliedstaaten mündeten...     

Niedrigzinsen: EZB-Politik oder ökonomisches Gesetz?

Wirtschaftsdienst - For the public and the media, the ECB is responsible for low interest rates. This is only partially true. Interest rates started to decline long before the ECB’s...     

Regional heterogeneity,the rise of public debt and monetary policy in post-bubble Japan: lessons for the EMU

Both Japan and parts of the European Monetary Union have experienced boom and bust in stock and real estate markets, which have been followed by a lasting crisis. The paper analyses the role of a high degree of regional heterogeneity for public debt and monetary policy in the context of crisis. It is shown for Japan that the attempts to maintain regional cohesion via a regional transfer mechanism has contributed to the unprecedented rise in public debt and persistent monetary expansion. Econometric estimations show that in Japan regional redistribution of funds has ensured homogeneous living conditions across Japanese regions pre- and post-crisis. The side condition is monetary expansion. A similar effect could emerge in Europe, if the crisis persists.     

The Case for Stabilizing China＇s Exchange Rate： Setting the Stage for Fiscal Expansion

China＇s financial conundrum arises from two sources. First, its large saving （trade） surplus results in a currency mismatch because it is an immature creditor that cannot lend in its own currency. Instead, foreign currency claims （largely US dollars） build up within domestic financial institutions. Second, economists, both American and Chinese, mistakenly attribute the surpluses to an undervalued RMB. To placate the USA, the result was a gradual and predictable appreciation of the RMB against the dollar of 6 percent or more per year from July 2005 to July 2008. Together with the fall in US interest rates since mid-2007, this one- way bet in the foreign exchanges markets not only attracted hot money inflows but inhibited private capital outflows from financing China＇ s huge trade surplus. Therefore, the People＇s Bank of China had to intervene heavily to prevent the RMB from ratcheting upwards, and so became the country＇s sole international financial intermediary as official exchange reserves exploded Because of the currency mismatch, floating the RMB is neither feasible nor desirable, and a higher RMB would not reduce China＇ s trade surplus. Instead, monetary control and normal private-sector finance for the trade surplus require a return to a credibly fixed nominal RMB/USD rate similar to that which existed between 1995 and 2004. However, for any newly reset RMB/USD rate to be credible as a monetary anchor, foreign ＂China bashing＂ to get the RMB up must end. Then the stage would be set for fiscal expansion to both stimulate the economy and reduce its trade surplus.