EVA

8 May 2004

By luck, one team using NetMike managed to catch up with me on Friday. They are sure they will win (at least in their world) because their EVA is so much better than the other teams.

I’ve had a quick look at the numbers (in their world), and I think they have every reason to be confident. I’m not going to bother looking at the others–that’s not the point. What is interesting is that someone (their CFO) has brought a really useful tool to bear on the situation–they know that in the long run they will win, because they are constantly seeking to improve their EVA.

Once upon a time, we had teams develop a balanced scorecard, but few teams would develop measures that would provide them with useful information and that would guide them into the future. Too often the measures where vague, and goals unclear. So, it’s really pleasing to see a team having a clear measure of how they are doing, rather than just relying on simple measures, such as SHV or capitalisation.