How to Increase your WCI Score

Use EVA and the EVA Margin and EVA Momentum ratio statistics to assess profitability, profitable growth and wealth-creation. Pay managers bonuses at all levels for increasing EVA and give them the tools and training to do so.

Avoid overpaying for acquisitions or buying back stock at its peaks. Manage your portfolio of businesses from a wealth-creation perspective. This includes sensing opportunity—entering lucrative or fastgrowing businesses as well as divesting businesses making sub-par contributions or shuttering them.

Ensure that the company’s capital structure is right. Equity is more expensive than debt, increasing the cost of capital, but too much debt can kill a company.

Find the best ways to boost operating results. Those might include compelling value propositions (e.g., Amazon’s product reviews, broad selection, customer experience, pricing and Prime membership); powerful marketing message (e.g., Memorial Sloan Kettering Cancer Center’s slogan, “The best cancer care, anywhere”); and strengthening the emotional connection with
customers (e.g., Apple, American Girl).

Finally, don’t take risks that could seriously wound your company’s value (e.g., cheating at Volkswagen and Wells Fargo; slipshod quality at Johnson & Johnson). In other words, are you managing your company’s risk, or managing to risk your company?


Drew Morris

Drew Morris (drew.morris@greatnumbers.com) is the founder and CEO of Great Numbers! The company helps executives find the various dimensions of the upside in their businesses and mold it into a prosperity design—a blueprint for delivering that upside. He has no stake in any of the companies mentioned.

Share
Published by
Drew Morris

Recent Posts

A CEO State Of Mind—In County Government

Why companies like Nokia are betting on Middlesex County, New Jersey—where smart governance meets private-sector…

2 days ago

How Kardex Remstar Is Working To Build American Automation

The warehouse automation equipment maker is investing in a strong supply chain by building production…

2 days ago

Six Questions To Bring Insight Back To Strategy

Strategy processes are getting squeezed. Answering these questions will set you up for building and…

3 days ago

Reliable AI Agents

The key lies in a progressive implementation of control mechanisms, each adding a new layer…

3 days ago

CEOs Of The Year On Succeeding In The Top Job

To celebrate the 40th CEO of the Year, we share some lessons learned along the…

3 days ago

‘A Good Time To Speak Up For Business’: The 2025 CEO Of The Year Celebration

Chief Executive Group CEO Marshall Cooper opens the 40th annual celebration, this year honoring Lilly’s…

3 days ago