A concise and compelling rethinking of an unjustly deemphasized element of corporate strategy.
A business book offers a panoramic reconsideration of capital expenditure strategy, its place in a company’s overall vision, and its significance in the global economy.
According to Weissenrieder and Lindén, capital expenditure is both absolutely crucial to a company’s success and largely deprioritized. For the most part, firms continue to rely on methodological approaches that date back to the 1960s and fail to take advantage of the considerable progress in computer technology—especially regarding calculative measurement—but even more disastrously assume the perch of “analytic thinking” versus “systems thinking.” In other words, each capex project is adopted in a spirit of reactive assessment, with companies seeing a series of isolated opportunities rather than a “holistic” strategy that examines the whole financial picture. In fact, most capex projects do not add any value, and site managers generally pursue them in order to maintain current operations, not maximize shareholder value. As a result of this piecemeal approach, only a “fraction of the capex budget goes to the sites that are the real economic engines of the company—the powerhouses that keep pouring money into the company’s coffers.” The authors eloquently argue that a company’s prospects for success hinge on the creation of an overarching capex vision that includes a 10-to-15-year horizon of predictions: “Why do some succeed where others end up in disaster? It is not that some companies are luckier with pricing or were dealt a better economic hand. It comes from superior capital allocation decisions; it’s how leadership reacts to those conditions. Poor companies result from poor capital allocation and end up with poor competitiveness and cash flow. Companies allocate resources to assets not creating value and starve those that are.” The authors not only limn a comprehensive synopsis of their radical reinterpretation of capex strategy, but also provide painstakingly granular illustrations—they forward a theory, but a thoroughly empirical one well evidenced by their own considerable experience and a wealth of data.
Weissenrieder and Lindén have a great expanse of experience in capex strategy between the two of them, and their expertise is inarguable—they write with immense confidence and intellectual circumspection. Unlike the typical business book today, which promises the world and largely delivers conventional platitudes, this one is equal to its promises, tackling the issue with all the rigor of an academic treatise. But the volume is not a mélange of intellectual abstractions—the authors make an argument and then provide substantiation for their thesis. And while that argument often is necessarily a technically formidable one—this is not a breezy book—they advance their position with much more lucidity than could be reasonably expected. Moreover, they also consider the macro-level impact of reforming capex strategy, which they believe is an essential part of the “virtuous cycle” of creative destruction as well as a healthy global economy that is financially and environmentally sustainable: “Creative destruction is a fundamental fact of free markets and capitalism, and the fundamental drivers of creative destruction are innovation and capital allocation. The smoother the wheels of the creative destruction process can turn, the higher the economic growth.” This is a masterly and analytically scrupulous work, and it should serve as a model for other books in the genre.
A concise and compelling rethinking of an unjustly deemphasized element of corporate strategy.Pub Date: Sept. 1, 2022
ISBN: 978-1-264-28529-7
Page Count: 240
Publisher: McGraw-Hill
Review Posted Online: Aug. 26, 2022
Kirkus Reviews Issue: Oct. 15, 2022
Review Program: Kirkus Indie
Cogent, well-timed ideas for meeting today’s biggest challenges.
Helping liberals get out of their own way.
Klein, a New York Times columnist, and Thompson, an Atlantic staffer, lean to the left, but they aren’t interrogating the usual suspects. Aware that many conservatives have no interest in their opinions, the authors target their own side’s “pathologies.” Why do red states greenlight the kind of renewable energy projects that often languish in blue states? Why does liberal California have the nation’s most severe homelessness and housing affordability crises? One big reason: Liberal leadership has ensnared itself in a web of well-intentioned yet often onerous “goals, standards, and rules.” This “procedural kludge,” partially shaped by lawyers who pioneered a “democracy by lawsuit” strategy in the 1960s, threatens to stymie key breakthroughs. Consider the anti-pollution laws passed after World War II. In the decades since, homeowners’ groups in liberal locales have cited such statutes in lawsuits meant to stop new affordable housing. Today, these laws “block the clean energy projects” required to tackle climate change. Nuclear energy is “inarguably safer” than the fossil fuel variety, but because Washington doesn’t always “properly weigh risk,” it almost never builds new reactors. Meanwhile, technologies that may cure disease or slash the carbon footprint of cement production benefit from government support, but too often the grant process “rewards caution and punishes outsider thinking.” The authors call this style of governing “everything-bagel liberalism,” so named because of its many government mandates. Instead, they envision “a politics of abundance” that would remake travel, work, and health. This won’t happen without “changing the processes that make building and inventing so hard.” It’s time, then, to scrutinize everything from municipal zoning regulations to the paperwork requirements for scientists getting federal funding. The authors’ debut as a duo is very smart and eminently useful.
Cogent, well-timed ideas for meeting today’s biggest challenges.Pub Date: March 18, 2025
ISBN: 9781668023488
Page Count: 320
Publisher: Avid Reader Press
Review Posted Online: Jan. 16, 2025
Kirkus Reviews Issue: Feb. 15, 2025
BOOK REVIEW
Striking research showing the immense complexity of ordinary thought and revealing the identities of the gatekeepers in our...
A psychologist and Nobel Prize winner summarizes and synthesizes the recent decades of research on intuition and systematic thinking.
The author of several scholarly texts, Kahneman (Emeritus Psychology and Public Affairs/Princeton Univ.) now offers general readers not just the findings of psychological research but also a better understanding of how research questions arise and how scholars systematically frame and answer them. He begins with the distinction between System 1 and System 2 mental operations, the former referring to quick, automatic thought, the latter to more effortful, overt thinking. We rely heavily, writes, on System 1, resorting to the higher-energy System 2 only when we need or want to. Kahneman continually refers to System 2 as “lazy”: We don’t want to think rigorously about something. The author then explores the nuances of our two-system minds, showing how they perform in various situations. Psychological experiments have repeatedly revealed that our intuitions are generally wrong, that our assessments are based on biases and that our System 1 hates doubt and despises ambiguity. Kahneman largely avoids jargon; when he does use some (“heuristics,” for example), he argues that such terms really ought to join our everyday vocabulary. He reviews many fundamental concepts in psychology and statistics (regression to the mean, the narrative fallacy, the optimistic bias), showing how they relate to his overall concerns about how we think and why we make the decisions that we do. Some of the later chapters (dealing with risk-taking and statistics and probabilities) are denser than others (some readers may resent such demands on System 2!), but the passages that deal with the economic and political implications of the research are gripping.
Striking research showing the immense complexity of ordinary thought and revealing the identities of the gatekeepers in our minds.Pub Date: Nov. 1, 2011
ISBN: 978-0-374-27563-1
Page Count: 512
Publisher: Farrar, Straus and Giroux
Review Posted Online: Sept. 3, 2011
Kirkus Reviews Issue: Sept. 15, 2011
BOOK REVIEW
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