For example, the movie True Lies centers on Arnold Schwarzenegger’s character, who has been leading a double life. The image he presents to his wife, played by Jamie Lee Curtis, is one of a boring, predictable salesman. That stability leads Curtis to find excitement elsewhere, until she discovers that her husband is really a super spy.
In the real world, predictability takes us to the bank — in a big way.
The more predictable the growth of our future free cash flows (FCF), the greater the value of our companies. In case you forgot your Finance 101, FCF is calculated by subtracting capital expenditures from operating cash flow. You care about FCF because it represents the cash that your company is able to generate after making investments for maintaining/growing your assets.
How do we make the growth of our future cash flows predictable? By building sustainability and scalability into our businesses.
Read some thoughts about how to do that at The Business Journals.
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