J Curve Investment Ownership

Date: 13 November 2012
Category: J Curve Management
Tags: J Curve Management, J Curve Investment

In our previous blog, we looked at “What are J-Curve Investments?”.  Today we would like you to think about your own J Curve investments and consider the following:

1. Are you able to name the person in charge of each one?
2. Is a single person responsible for managing and tracking their progress, and for measuring results and ensuring they don’t drastically damage the company?
3. Do you have one person who is responsible for overseeing ALL of the J Curve investments?

In many mid-market companies (companies between $1 MM and $100 MM in revenue), rarely does a single person own this responsibility. Sometimes the responsibility is shared by a group of executives.  This can work because mid-market CEOs and their leadership teams intuitively understand when they’re taking on J Curves.

But most mid-market companies don’t have a formal process for evaluating and managing strategic investments. Nor do they usually measure and track either the performance of the J Curve as an independent entity, or its impact on the business as a whole.

Should they? Absolutely!

Mid-market CEOs need to understand firstly, how many J Curves the company has, and secondly, the current status of each one.  As well as the impact the investments have on cash flow, return and profit.  They also need to appreciate the hidden cost of J Curves which is the amount of “executive head-space” that is absorbed.  This cost is of course the opportunity cost of the other valuable tasks the executive could be completing.

Tune in next time when we’ll look at the risks involved in J Curve investments.

Want to know more?  Just contact us!