Monday, August 22, 2022

Investmentlogic

We are moving toward the people-centric age with innovation, choice, empathy, investment activities should focus more on unleashing potentiality and advancing human society.

The digital world moves into a hyper-connected and interdependent relationship under “VUCA” business new normal. Venture investment is an interdisciplinary pursuit and cross domain effort. 

There are different variables in investment related decision-making. Evaluate each of the variables from the perspective of current or projected value. It’s important to leverage quality information, clarify logic of problem-solving, enhance governance, in order to create multifaceted value and reach high return on investment.



Without information, investment is costly:
Nowadays, information is often the most time-intensive piece of the investment puzzle. The original germ of a creative idea is often, if not always arrived through the interaction of ideas from different domains of information/ knowledge. Informative investors advocate innovative mindset, fresh ideas, entrepreneurship or intrapreneurship activities, invest in great ideas from future oriented perspectives, and generate unique business value to solve problems creatively.

Investment is risky; it presents a greater challenge and reward by pioneering the development of new products, services, processes, or business models, etc. information is the gold mine all forward-looking investors should dig in; they ask insightful questions about the impact of ideas, and collect sufficient information about trends, risks; nourish innovation experimentation by exploration of newly acquired information or fresh-minted theories, build a balanced investment portfolio of incremental and breakthrough innovation.

Without logic, investment is fuzzy:
All investment should focus on solving certain problems. The logical investment scenario helps to assess whether the new business model or initiative is the right investment to be done in the first place, ask why, what, how to clarify sequence & consequence; identify who when, where to ensure on-time, on-value return on investment. Insightful investors do cost-benefit analysis, make an objective assessment of their investment portfolio for getting high ROIs.

Besides linear financial calculation, it’s critical to clarify the nonlinear logic as the very clue hidden in varying circumstances across disciplinary domains horizontally for making wise investment. Interdisciplinary logic enables investment management to figure out what are the best methods for calculating multifaceted values by thinking outside the box and raising questions. Return on Investment should be expanded into a broader perspective which usually cannot be measured fully in time and dollars such as creativity, people-centricity, or culture evolution, societal value, etc.

Without governance, investment is lousy:
Businesses have limited resources and budgets, effective governance creates a good decision-making system and controlling system, integrates governance in the investment decision cycle, makes investment justification to ensure that you spend budgets or resources in the right way to achieve high return on investment.

With strong governance, the management can focus on three keys to presenting investment value: financial returns, return timeline and risk. In the organizational setting, the governance as a self defined framework can be used to judiciously authorize and manage the portfolio of business investments and resources to produce value in support of business goals and objectives, strike the right balance of short-term gain and long-term business perspective, to increase business value.

There are both opportunities and risks for every investment. Insightful investors broaden their investment perspectives, leverage emerging trends, weave the business “golden thread” for accelerating growth. We are moving toward the people-centric age with innovation, choice, empathy, investment activities should focus more on unleashing potentiality and advancing human society.

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