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The concepts of efficiency and effectiveness are commonly used when evaluating different processes. As project management can be described by different kinds of processes, the aim with this research is to explore the concepts within project management through the lens of quality management. Since project-based organisations are often struggling with the balance between time, cost and quality, they are interested in doing this as efficient and effective as possible. However, there are a wide variety of views on efficiency and effectiveness among professionals and research scholars, which makes it difficult to apply these concepts in project-based settings.
The study is based on a literature review and includes interviews with project office managers from Swedish construction and engineering companies. Findings from the study indicate that the terms efficiency and effectiveness are used without clear definitions, where measurements are executed and results interpreted in various ways. Clarifying the interpretation of project efficiency and effectiveness would help and support project- based organisations in their improvement work. Clarity implies improved preconditions to measure efficiency and effectiveness, and the possibility to develop indicators that can be used to help guide the organization in the desired direction. A clearer view on project efficiency and effectiveness can also be a basis for internal improvements in terms of time, cost and quality, as well as external improvements in terms of customer satisfaction.
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The goal of this paper is to illuminate the debate concerning the economics of ecosystem services. The sustainability debate focuses on whether or not ecosystem services are essential for human welfare and the existence of ecological thresholds. If ecosystem services are essential, then marginal analysis and monetary valuation are inappropriate tools in the vicinity of thresholds. The justice debate focuses on who is entitled to ecosystem services and the ecosystem structure that generates them. Answers to these questions have profound implications for the choice of suitable economic institutions. The efficiency debate concerns both the goals of economic activity and the mechanisms best suited to achieve those goals. Conventional economists pursue Pareto efficiency and the maximization of monetary value, achieved by integrating ecosystem services into the market framework. Ecological economists and many others pursue the less rigorously defined goal of achieving the highest possible quality of life compatible with the conservation of resilient, healthy ecosystems, achieved by adapting economic institutions to the physical characteristics of ecosystem services. The concept of ecosystem services is a valuable tool for economic analysis, and should not be discarded because of disagreements with particular economists’ assumptions regarding sustainability, justice and efficiency.
► Ecosystem services (ES) have generated several important debates in economics. ► These debates concern sustainability, justice and efficiency (SJ&E). ► Desirability of market allocation depends on how SJ&E are defined. ► Conventional and ecological economists have different definitions of SJ&E. ► Economic assessments of ES should explicitly state their assumption concerning SJ&E.
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Working Smarter to Enhance Productivity
Improve the way that you use your time.
Time Management Definition
“Time management” is the process of organizing and planning how to divide your time between specific activities. Good time management enables you to work smarter – not harder – so that you get more done in less time, even when time is tight and pressures are high. Failing to manage your time damages your effectiveness and causes stress.
It seems that there is never enough time in the day. But, since we all get the same 24 hours, why is it that some people achieve so much more with their time than others? The answer lies in good time management.
The highest achievers manage their time exceptionally well. By using the time-management techniques in this section, you can improve your ability to function more effectively – even when time is tight and pressures are high.
Good time management requires an important shift in focus from activities to results: being busy isn’t the same as being effective. (Ironically, the opposite is often closer to the truth.)
Spending your day in a frenzy of activity often achieves less, because you’re dividing your attention between so many different tasks. Good time management lets you work smarter – not harder – so you get more done in less time.
What Is Time Management?
“Time management” refers to the way that you organize and plan how long you spend on specific activities.
It may seem counter-intuitive to dedicate precious time to learning about time management, instead of using it to get on with your work, but the benefits are enormous :
- Greater productivity and efficiency.
- A better professional reputation.
- Less stress.
- Increased opportunities for advancement.
- Greater opportunities to achieve important life and career goals.
Failing to manage your time effectively can have some very undesirable consequences:
- Missed deadlines.
- Inefficient work flow.
- Poor work quality.
- A poor professional reputation and a stalled career.
- Higher stress levels.
Spending a little time learning about time-management techniques will have huge benefits now – and throughout your career.
Time management is the process of organizing and planning how much time you spend on specific activities. Invest some time in our comprehensive collection of time management articles to learn about managing your own time more efficiently, and save yourself time in the future.
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Hiring managers spend countless, wasted hours, asking the wrong interview questions to determine the right job or culture fit in a candidate; many of them end up as mis-hires that hurt the bottom line.
What most managers don’t do is make the adjustment from typical interview questions like “Why should we hire you” to behavioral interview question that eliminate vagueness and get to the root of the answer they’re looking for. Let me explain.
The Premise of Behavioral Interviewing
Behavioral interviewing points to past performance as the best predictor of future performance. In essence, if you ask behavioral questions, you’re no longer asking questions that are hypothetical, but are asking questions that must be answered based upon fact.
The Difference: Instead of asking a candidate how he or she would behave in a particular situation, the hiring manager or interviewer will ask a job candidate to describe how he or she did behave.
The interviewer questions and probes (think of “peeling the layers from an onion”), asks for details, and will not allow a job candidate to theorize or generalize.
This gives hiring managers a clear edge; candidates may not get a chance to deliver any prepared stories or scripted answers.
20 Questions for Assessing Motivation
If your company values workers who have an entrepreneurial nature, take the initiative and have a can-do attitude, here are twenty behavioral interview questions that can draw revealing answers and get you on your way to finding employees with stellar motivation.
- At times your work load may feel unmanageable. Describe a time when you recognized that you were unable to meet multiple deadlines. What did you do about it?
- Tell us about an idea you started that involved collaboration with your colleagues that improved the business.
- When you had extra time available at your last job, describe ways you found to make your job more efficient.
- At times you may be asked to do many things at once. Tell me how you would decide what is most important and why.
- Tell me a time when you identified a problem with a process and what steps did you take to improve the problem?
- What processes or techniques have you learned to make a job easier, or to be more effective? What was your discovery process and how did you implement your idea?
- Give me an example of a new idea you suggested to your manager within the last six months. Describe steps you have taken to implement your idea.
- Tell me about a time when you went beyond your manager’s expectations in order to get the job done.
- Tell me about a time when you identified a new, unusual or different approach for addressing a problem or task.
- Describe a project or idea (not necessarily your own) that was implemented, or carried out successfully primarily because of your efforts.
- How do you react when faced with many hurdles while trying to achieve a goal? How do you overcome the hurdles?
- Everyone has good days and bad days at work. Take your time and think back to a really good day you had and tell me why it was a good day.
- How do you maintain self-motivation when you experience a setback on the way to achieve your goal? How do you do it?
- If you find yourself working with a team that is not motivated, how do you keep yourself motivated and motivate others?
- Describe the work environment or culture in which you are most productive and happy.
- Tell me about the job position that satisfied you the most. How about the least? What made each one more or less satisfying to you?
- What goals, including career goals, have you set for your life?
- Describe for me a situation where you had a positive effect on someone. What did you do? How did the other person react? Why do you think what happened, happened?
- What is your preferred work style? Do you prefer working alone or as part of a team? What percentage of your time would you allocate to each, given the choice?
- Describe the actions and behaviors of your current/former manager or supervisor that you respond to most effectively?
Bringing it home.
When you consider the answers you’re looking for about motivation, you are assessing several factors: What motivates your candidate? What is the work environment that he or she finds motivating? Is the work environment consistent with your job candidate’s needs to take the initiative and be a self-starter?
A candidate’s innate drive and tenacity needs to match the job for which he is selected. For example, you don’t want to hire a candidate who most enjoys working alone for your positions that require strong collaboration.
For the most part, you want to listen for those motivational cues that tell you the job candidate is about helping others, creating something, finishing something, doing whatever it takes to succeed and making the team better.
I’m hearing lots of news about increases in marketing spend. For instance, a few months ago Gartner predicted that CMOs will soon spend more than their counterpart CIOs, and a recent study revealed that almost half of B2B marketers will enjoy larger marketing budgets in 2013. However, there’s far less chatter about where marketing execs plan to allocate their funds –and hardly any about how they’ll account for results tied to all this spend. What factors are CMOs using to guide their investment decisions in this new Year of the Marketer? And how can they keep their budgets robust and growing?
If you’re in charge of allocating marketing spend, these five criteria should top your list of considerations:
1. Internal objectives. Ask yourself: What do you aspire to achieve? But remember, these days, your plan needs to do more than just align objectives to a budget handed down from management. You’re also expected to bring viable, creative (yet affordable) opportunities to the table and show senior management you have strategies to achieve them.
Fortunately, today’s data-driven, integrated marketing technologies makes listening to the marketplace and measuring progress far easier. Now, you can track your way toward revenue goals, have instant visibility into spending and campaign ROI, know where you stand on customer satisfaction measures or market share growth (or virtually any metric you need) and adjust your plans accordingly. I firmly believe that once you have decided on smart, attainable goals, today’s technologies can help you reach them faster.
Beyond operational and campaign spending, variables such as geographical structures, workforce development and the basic departmental dependencies at work in your company will also play a role in how your marketing plans should be designed and implemented.
2. World events. Keep a close eye on international news and forecasts. Are certain areas too risky for investment? Do you already have investments in countries or regions that are likely to be impacted by political instability, civil unrest, rule of law, climate change, etc. this year? On the flip side of that calculus, where are there valuable opportunities for expansion? How can you best leverage the growth forecasts for emerging economies?
Maintaining a world view also means constant tracking of your company’s international results and performance. Then, you need to use that data –and the insights generated from that data –to direct future allocations and growth.
3. Regs and legs. How will evolving regulations and legislation affect your marketing plans? Case in point: Even though there was plenty of time to prepare, new EU e-privacy directives appeared to catch many marketers by surprise last May. Because this sweeping legislation requires all marketers and website owners operating in any EU country to obtain consent from European users before implementing cookies or other technologies to capture online visitor information, many companies were left scrambling to maintain compliance.
4. Industry and financial analyst reports. Industry analysts can be valuable sources of insights –as long as you remember to view their reports in a context that’s meaningful for your company. For instance, I’ve often found that industry analysts are great at providing information on what customers want, but not-so-great at providing information on what real customers – those actually buying and using marketing solutions –actually need, which is a reliable, proven long-term partner to help them navigate change. In my book, if credible industry analysts acknowledge a vendor as a visionary leader in their market, I have no doubt that vendor can help its customers execute toward leadership in theirs.
Financial analyst reports are vital, as well, because our budgets are often guided by the health –or the perceived health –of the global economy. Larger firms can spend saved resources to take market share from competitors during a downturn; smaller firms might have to cut back. You need to stay tuned into today’s macro-economic and micro-industry trends so you can gauge how the economy may affect your plans down the road. As we all learned in Econ 101, financial markets are governed by four major factors: governments, international transactions, speculation/expectation, and supply and demand. These same forces shape trends across the marketing industry.
5. Results. I can’t stress this enough: Marketers need to start investing in results. It’s time to throw out those reams of old spreadsheets and update your processes to include marketing spend software. There’s really no other way to get the visibility you need across today’s multi-channel campaigns; there’s really no other way to efficiently see when you need to step in and stop the bleed on programs that aren’t working and/or throttle up those that are performing well. The point is, successful marketing is well-planned marketing, and successful marketing delivers demonstrable ROI. A recent headline in AdAge says it all: “P&G Results Pave Way for Rise in Marketing Spending.”
Most marketers I know are reveling in the spending responsibilities now in their hands. But, we all must remember that we’ll only be able to keep management’s continued trust if we can show and explain a positive return on marketing investment (ROMI). Before you spend a dime, make sure your objectives are clear, and be certain you’ve factored in the internal and external factors that can help or hinder your success.
Every company needs to invest time in these endeavors in order to improve performance.
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If there is one thing I have learned during my career, it is that things that seem obvious to some people are not so obvious to others. In working with companies of all types, I have seen firsthand the benefits of goal-setting and strategic planning. While many others also see the value of such endeavors, some are not sure that the benefits outweigh the effort required. This month, I hope to make the case for any company to invest the time in creating goals and developing strategic plans.
In simple terms, a goal is a desired result. To truly be useful, a goal needs to be measurable, specific with respect to time, and challenging but attainable. When clearly communicated, goals clarify expectations throughout a company. For anyone who has ever worked in sales, goals (often referred to as quotas) are second-nature and a strong motivator, as they are typically tied to compensation. At some point, we have probably all set a goal for ourselves, whether it was related to education, paying off a debt, excelling in a sport or landing a certain type of job. Goals are good and help us to focus our efforts on what is important. Measuring performance against goals will tell us how well we are doing at any point in time.
A strategic plan is the means by which a company will allocate its resources to achieve its goals. Where goals serve as the “what,” strategic plans describe the “how.” Ideally, a strategic plan should result from a series of meetings of key stakeholders within the company. Each stakeholder should have something to offer. The completed strategic plan will include the resources, tasks and timing required to meet the company’s goals.
There are four approaches companies can employ to manage their business (perhaps you can identify which approach your company normally employs).
Approach 1: Company goals and a strategic plan.
This approach establishes a shared vision and accountability for achieving that vision. Performance is tracked and results are made visible throughout the company. The more experience companies gain with this approach, the better the outcomes, as employees gain a greater understanding of what really can be accomplished in a given period of time. This approach has a track record of helping companies improve overall performance over time.
Approach 2: Company goals without a strategic plan.
This can be characterized as the “wish list” approach to managing a business. Although everyone in the company understands what needs to be achieved, there is a lack of understanding of how to go about it. This leads to limited, if any, accountability for actions as a wait-and-see philosophy takes hold. Company performance may get better, but it is almost entirely based on luck. Some refer to this approach as “management by hoping.”
Approach 3: Strategic plans without company goals.
Without company goals, these strategic plans are generally department- or work-center-focused and describe actions to be taken independently. This fosters a “silo mentality” in which departments operate more or less in isolation. Performance may improve in some areas of the company, but this does not translate to significant improvement company wide.
Approach 4: No company goals or strategic plans.
This describes a wholly reactive environment. Very little is planned and managers operate in the here and now. Quick, often temporary, improvements are the norm. Overall performance remains substantially the same year after year, with any changes attributed to factors outside of the company’s control.
To help understand how effectively you are setting goals and developing plans today, ask yourself the following three questions:
- What was the last company initiative that was completed on schedule? The rationale behind this question is that companies often get caught in the difficult struggle of managing day-to-day operations. It is hard to complete other tasks that have the potential of significantly improving the business. Companies cannot address everything, so there needs to be a narrow focus on the initiatives that are truly important and can be completed in a timely manner.
- What was the last significant action your company took that you did not agree with? This is important because improved performance comes from considering different points of view and achieving consensus (not necessarily unanimity). Avoid the risk of inertia that often stems from “groupthink” by challenging current practices and not accepting the status quo.
- What is one thing you will do in the coming year to increase company earnings? Earnings are a company’s lifeblood—not sales, receivables, new products, inventory accuracy or anything else (although these factors obviously support overall earnings). Earnings, by whatever measure is used, need to be the focus of all performance-improvement initiatives being planned or currently underway at a company.
Investopedia contributors come from a range of backgrounds, and over 20+ years there have been thousands of expert writers and editors who have contributed.
What Is Market Efficiency?
Market efficiency refers to the degree to which market prices reflect all available, relevant information. If markets are efficient, then all information is already incorporated into prices, and so there is no way to “beat” the market because there are no undervalued or overvalued securities available.
The term was taken from a paper written in 1970 by economist Eugene Fama, however Fama himself acknowledges that the term is a bit misleading because no one has a clear definition of how to perfectly define or precisely measure this thing called market efficiency. Despite such limitations, the term is used in referring to what Fama is best known for, the efficient market hypothesis (EMH).
The EMH states that an investor can’t outperform the market, and that market anomalies should not exist because they will immediately be arbitraged away. Fama later won the Nobel Prize for his efforts. Investors who agree with this theory tend to buy index funds that track overall market performance and are proponents of passive portfolio management.
- Market efficiency refers to how well current prices reflect all available, relevant information about the actual value of the underlying assets.
- A truly efficient market eliminates the possibility of beating the market, because any information available to any trader is already incorporated into the market price.
- As the quality and amount of information increases, the market becomes more efficient reducing opportunities for arbitrage and above market returns.
At its core, market efficiency is the ability of markets to incorporate information that provides the maximum amount of opportunities to purchasers and sellers of securities to effect transactions without increasing transaction costs. Whether or not markets such as the U.S. stock market are efficient, or to what degree, is a heated topic of debate among academics and practitioners.
Market Efficiency Theory
Market Efficiency Explained
There are three degrees of market efficiency. The weak form of market efficiency is that past price movements are not useful for predicting future prices. If all available, relevant information is incorporated into current prices, then any information relevant information that can be gleaned from past prices is already incorporated into current prices. Therefore future price changes can only be the result of new information becoming available.
Based on this form of the hypothesis, such investing strategies such as momentum or any technical-analysis based rules used for trading or investing decisions should not be expected to persistently achieve above normal market returns. Within this form of the hypothesis there remains the possibility that excess returns might be possible using fundamental analysis. This point of view has been widely taught in academic finance studies for decades, though this point of view is no long held so dogmatically.
The semi-strong form of market efficiency assumes that stocks adjust quickly to absorb new public information so that an investor cannot benefit over and above the market by trading on that new information. This implies that neither technical analysis nor fundamental analysis would be reliable strategies to achieve superior returns, because any information gained through fundamental analysis will already be available and thus already incorporated into current prices. Only private information unavailable to the market at large will be useful to gain an advantage in trading, and only to those who possess the information before the rest of the market does.
The strong form of market efficiency says that market prices reflect all information both public and private, building on and incorporating the weak form and the semi-strong form. Given the assumption that stock prices reflect all information (public as well as private), no investor, including a corporate insider, would be able to profit above the average investor even if he were privy to new insider information.
Differing Beliefs of an Efficient Market
Investors and academics have a wide range of viewpoints on the actual efficiency of the market, as reflected in the strong, semi-strong, and weak versions of the EMH. Believers in strong form efficiency agree with Fama and often consist of passive index investors. Practitioners of the weak version of the EMH believe active trading can generate abnormal profits through arbitrage, while semi-strong believers fall somewhere in the middle.
For example, at the other end of the spectrum from Fama and his followers are the value investors, who believe stocks can become undervalued, or priced below what they are worth. Successful value investors make their money by purchasing stocks when they are undervalued and selling them when their price rises to meet or exceed their intrinsic worth.
People who do not believe in an efficient market point to the fact that active traders exist. If there are no opportunities to earn profits that beat the market, then there should be no incentive to become an active trader. Further, the fees charged by active managers are seen as proof the EMH is not correct because it stipulates that an efficient market has low transaction costs.
An Example of an Efficient Market
While there are investors who believe in both sides of the EMH, there is real-world proof that wider dissemination of financial information affects securities prices and makes a market more efficient.
For example, the passing of the Sarbanes-Oxley Act of 2002, which required greater financial transparency for publicly traded companies, saw a decline in equity market volatility after a company released a quarterly report. It was found that financial statements were deemed to be more credible, thus making the information more reliable and generating more confidence in the stated price of a security. There are fewer surprises, so the reactions to earnings reports are smaller. This change in volatility pattern shows that the passing of the Sarbanes-Oxley Act and its information requirements made the market more efficient. This can be considered a confirmation of the EMH in that increasing the quality and reliability of financial statements is a way of lowering transaction costs.
Other examples of efficiency arise when perceived market anomalies become widely known and then subsequently disappear. For instance, it was once the case that when a stock was added to an index such as the S&P 500 for the first time, there would be a large boost to that share’s price simply because it became part of the index and not because of any new change in the company’s fundamentals. This index effect anomaly became widely reported and known, and has since largely disappeared as a result. This means that as information increases, markets become more efficient and anomalies are reduced.
Understanding Taylorism and Early Management Theory
Taylor investigated the “science” of shoveling.
How did current management theories develop?
People have been managing work for hundreds of years, and we can trace formal management ideas to the 1700s. But the most significant developments in management theory emerged in the 20th century. We owe much of our understanding of managerial practices to the many theorists of this period, who tried to understand how best to conduct business.
One of the earliest of these theorists was Frederick Winslow Taylor. He started the Scientific Management movement, and he and his associates were the first people to study the work process scientifically. They studied how work was performed, and they looked at how this affected worker productivity. Taylor’s philosophy focused on the belief that making people work as hard as they could was not as efficient as optimizing the way the work was done.
In 1909, Taylor published “The Principles of Scientific Management.” In this, he proposed that by optimizing and simplifying jobs, productivity would increase. He also advanced the idea that workers and managers needed to cooperate with one another. This was very different from the way work was typically done in businesses beforehand. A factory manager at that time had very little contact with the workers, and he left them on their own to produce the necessary product. There was no standardization, and a worker’s main motivation was often continued employment, so there was no incentive to work as quickly or as efficiently as possible.
Taylor believed that all workers were motivated by money, so he promoted the idea of “a fair day’s pay for a fair day’s work.” In other words, if a worker didn’t achieve enough in a day, he didn’t deserve to be paid as much as another worker who was highly productive.
With a background in mechanical engineering, Taylor was very interested in efficiency. While advancing his career at a U.S. steel manufacturer, he designed workplace experiments to determine optimal performance levels. In one, he experimented with shovel design until he had a design that would allow workers to shovel for several hours straight. With bricklayers, he experimented with the various motions required and developed an efficient way to lay bricks. And he applied the scientific method to study the optimal way to do any type of workplace task. As such, he found that by calculating the time needed for the various elements of a task, he could develop the “best” way to complete that task.
These “time and motion” studies also led Taylor to conclude that certain people could work more efficiently than others. These were the people whom managers should seek to hire where possible. Therefore, selecting the right people for the job was another important part of workplace efficiency. Taking what he learned from these workplace experiments, Taylor developed four principles of scientific management. These principles are also known simply as “Taylorism”.
Four Principles of Scientific Management
Taylor’s four principles are as follows:
- Replace working by “rule of thumb,” or simple habit and common sense, and instead use the scientific method to study work and determine the most efficient way to perform specific tasks.
- Rather than simply assign workers to just any job, match workers to their jobs based on capability and motivation, and train them to work at maximum efficiency.
- Monitor worker performance, and provide instructions and supervision to ensure that they’re using the most efficient ways of working.
- Allocate the work between managers and workers so that the managers spend their time planning and training, allowing the workers to perform their tasks efficiently.
Critiques of Taylorism
Taylor’s Scientific Management Theory promotes the idea that there is “one right way” to do something. As such, it is at odds with current approaches such as MBO (Management By Objectives), Continuous Improvement initiatives, BPR (Business Process Reengineering), and other tools like them. These promote individual responsibility, and seek to push decision making through all levels of the organization.
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What Is Capital Allocation?
Capital allocation is about where and how a corporation’s chief executive officer (CEO) decides to spend the money that the company has earned. Capital allocation means distributing and investing a company’s financial resources in ways that will increase its efficiency, and maximize its profits.
A firm’s management seeks to allocate its capital in ways that will generate as much wealth as possible for its shareholders. Allocating capital is complicated, and a company’s success or failure often hinges upon a CEO’s capital-allocation decisions. Management must consider the viability of the available investment options, evaluate each one’s potential effects on the firm, and allocate the additional funds appropriately and in a manner that will produce the best overall results for the firm.
Capital Allocation: My Favorite Financial Term
Understanding Capital Allocation
Greater-than-expected profits and positive cash flows, however desirable, often present a quandary for a CEO, as there may be a great many investment options to weigh. Some options for allocating capital could include returning cash to shareholders via dividends, repurchasing shares of stock, issuing a special dividend, or increasing a research and development (R&D) budget. Alternatively, the company may opt to invest in growth initiatives, which could include acquisitions and organic growth expenditures.
In whatever ways a CEO chooses to allocate the capital, the overarching goal is to maximize shareholders’ equity (SE), and the challenge always lies in determining which allocations will yield the most significant benefits.
Examples of Capital Allocation
Nobel prizewinners Franco Modigliani and Merton Miller identified return on investment (ROI) as a significant contributor to shareholder value. A company may increase ROI by making improvements to profitability and choosing to invest its funds prudently. To measure how well the company turns capital into profit, one would look at the return on invested capital (ROIC).
Newell Brands Inc. (NASDAQ: NWL) held its first-quarter earnings call with investors in April 2016. Two weeks earlier, the company had completed its merger with Jarden in a stock and cash deal valued at more than $15 billion. On the call, Newell’s management outlined its capital-allocation priorities, which included continuing to pay dividends, followed by repaying debt. Management’s goal was to achieve its targeted leverage ratio within two to three years. Once they accomplished this target, the management planned to invest in growth initiatives.
In December 2015, Neil Williams, former chief financial officer (CFO) at Intuit Inc. (NASDAQ: INTU), emphasized the importance of a disciplined capital-allocation approach for the company. This approach included managing internal spending such as R&D, investing in acquisitions, and returning money to shareholders. Williams also disclosed that Intuit’s benchmark return as 15% over a five-year period.