September 24, 2014

NY Stock Exchange

Financial metrics might be causing an innovation deficit. Credit: Scott Beale / Flickr Creative Commons

Remember Martin Luther, the Protestant reformer who nailed his list of ideas to a church door? Now, 500 years later, Clayton Christensen, Harvard Business School professor and author of "The Capitalist's Dilemma," says we need a new Martin Luther to rail against today’s bigwigs – the financiers of Wall Street - and their own short-sightedness.

Because most financial companies measure their success based on fast returns and free cash flow, he says, they are stifling innovation and long-term growth for the U.S. economy.

“The way we measure success has actually broken the system,” Christensen argues. He calls for a radical executive to lead the way for others and create new metrics for gauging success.

“We’re all inside of this church, but the door’s not locked,” he says.  “So just come out, executives.”

What do you think of Christensen’s ideas? Will changing the metrics spur more innovation? Let us know on Facebook or Twitter.

Business, innovation, finance, Clayton Christensen

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