This is the sixth podcast for the power sector corporate strategy study we will soon release as part of our Executive Program.

The start of week 2 is dominated by the top-down financial analyses results. This is also when all the 6 streams officially kick-of: corporate strategy, business unit strategy, business case, organizational design, management skills analyses and value based management.

In this podcast we provide quotes and feedback from the focus interviews with the CEOs of the individual companies within Empire International, and the feedback from the labour union updates.

The general synopses is that EI is a much bigger and unwieldy business than we had initially assumed. The company is a collection of many, many tiny, medium, larger and very large separate companies who do not operate as one unit. They all do their own things and trip over each other.

Crucially, the top-down financial analyses is close to completion and we can present the financial snapshot of the company. It is not pretty and there is a serious cash problem. We discuss the three broad areas we are tackling: to increase shareholder value, wrap up with a discussion of how each stream fits into the broader study and prioritize the three most important streams of work.

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Comments

9 responses to Top-Down Financial Analyses

  1. Hello Nauruz,

    This is very possible, and encouraged since US corporate taxes are high. Provided the rules are not broken, it is fine.

    Michael

  2. Michael,
    On a related to financial analysis issue, have you experienced a situation when a multinational company generates 60% of its sales in US market, but attributes a huge negative profit to US market?
    Let’s say we have $10B revenue company, with $6B coming from USA. The company records $3B in net earnings. Out of that $3B, $3.5B comes from foreign markets and minus $0.5B comes from USA consistently for multiple years. I understand why a company would want to do this from tax perspective, record majority of R&D and other costs to USA, but is this legally possible or I’m misreading company’s financial data?

  3. Understood Michael. Thanks.

  4. Hi Marut,

    Keep in mind you are comparing the final released Technology Corporate Strategy with these update podcasts. The final Power Sector Corporate Strategy study will have all that detail when it is released.

    We try to limit details in the update podcasts to keep the focus on the strategy themes. Too much details sometimes loses followers.

    Michael

  5. This is helpful Michael! I will wait for the podcast explaining governance structure.

    I think a podcast explaining the milestones (in terms of executive updates or otherwise) towards which the team is working will help picture the plan for the entire study. For example, in the Tech Corp Strategy study published under Executive Programs, the two executive updates had formed the key milestones.

    Marut

  6. Hi Marut,

    Here are the answers:

    1 – The study will be 16 weeks.
    2 – “Executive” implies updates to more than the CEO. We do an update every week to the executive team and I will explain the governance structure in a separate podcast.
    3 – A future podcast will explain this better but we have 3 levels of executives whom we update and the frequency extends from weekly updates to once every month to just one update in the entire study.

    Hope that helps.

    Michael

  7. Michael,

    I have few questions around the study structure and plan so that I can make sense of progress against the overall plan as I go through the podcasts:
    1. How long is the overall study?
    2. How many executive updates are you planning?
    3. How are these updates placed against the timeline for the overall study?

    Marut

  8. Thanks Kieran.

    We have a very small technical glitch with iTunes but they will appear there shortly. We will send out an email when that happens.

    Michael

  9. Hi Michael,

    The new podcasts don’t seem to be appearing in iTunes. I listen to them on my phone so it’d be great if they were available on iTunes too.

    Also, I much prefer the podcast format to the previous live blogging format (easier to keep up with).

    Thanks,
    Kieran

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