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The book that I chose to read and blog about is “Innovation Killers: How Financial Tools Destroy Your Capacity to Do New Things” by Clayton M. Christensen, Stephen P. Kaufman and Willy C. Shih. When going through the options on books to choose, this one was immediately one of the most captivating for me because of the word “financial”. Being a finance major, learning about anything finance related is exciting for me and sparks my interest. Next, the Title in its entirety captivated my interest. “How Financial Tools Destroy Your Capacity to Do New Things”. This is such an interest take of how financial tools impacts business and innovation. I am a Wharton School of Business grad and one of the first things the school teaches all of its students is economics and corporate finance. It works out well because economics gives you the arial view of how the world effects companies and finance deals with the direct influences a company may face. They taught us about important aspects of financially valuating a company or decision by three main metrics:
- Fixed and Sunk Costs
I was under the impression that many of these methods were fool proof since my professors harped on them and spent so much time teaching us them. The book mentions, explains and dissects the good and bad of each of these popular financial methods.
While this book seemed to be very interesting initially, when it came in the mail, I noticed it wasn’t a chapter book and was only 50 pages long. This made the explanations and teachings concise, but I knew it would give me a challenge to write about such little content each week. These next few weeks I will dive into 3 financial topics: DCF/NPV, fixed and sunk costs and EPS, explain what they are and convey how I learned they can hurt a company’s innovation from the book.