I ran into this a while back.
I was struck by this:
One of my CFOs once told me that the return on new capital investment is long term and the success rate has a high variance, while the return on “maintenance capital investments” required to keep existing production facilities running is short term and has a low variance.
In “Knowledge and Power” George Gilder quotes Peter Drucker saying this; “No one, but no one know less about your business than your CFO.” Gilder goes on to explain that Drucker was saying that the financial people in the office only deal with accounts., numbers, that by the time the CFO sees them are useless for anything other than seeing what has happened in the past.
I’ve posted about that great movie “Executive Suite, where the company is facing the same issues and deals with them in the correct fashion…
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