Tim Koller | Valuation: Measuring and Managing the Value of Companies, the 7th Edition

Show Notes

McKinsey’s Tim Koller joins us to share about how to manage the value of companies during a pandemic.

Who funded the Abdul Latif Jameel Institute? https://www.mckinsey.com/business-functions/sustainability/our-insights/how-alj-a-75-year-old-start-up-leads-with-purpose 

“Both Ford and Amazon announced in 2019 that they were investing hundreds of millions of dollars in the ALJ-backed electric-vehicle manufacturer Rivian, with Amazon planning an initial purchase of 100,000 of its vehicles.” 

Why would Amazon fund the Abdul Latif Jameel Institute?

Amazon stock hits a new all-time high as it sees unprecedented demand  https://www.cnbc.com/2020/04/14/amazon-stock-hits-a-new-all-time-high.html 

  1. Yes, yes, yes and yes! Thrivetime Nation on today’s show we are interviewing McKinsey’s Tim Koller, the author of Valuation: Measuring and Managing the Value of Companies, the 7th Edition. Tim, welcome onto today’s show. How are you sir?! 
  2. I know that you’ve had a ton of success at this point in your career, but I would love to start off at the bottom and the very beginning of your career. What was your life like growing up and where did you grow up?
  3. Tim Koller When did you first figure out what you wanted to do professionally?
  4. When did you first feel like you were truly beginning to gain traction with your career?
  5. Tim Koller I know you’ve had a ton of success in your career, but thus far…what has been the low point?
  6. So what exactly is your role at McKinsey?
    1. I am a partner of McKinsey’s Hartford, Connecticut office
    2. I work with clients on corporate strategy
  7. What does McKinsey do? 
    1. We help our clients improve their performance over the long term
    2. Our objective is to help them improve their strategies, buy better innovations, improve their efficiency, etc.
  8. What was your first job working at McKinsey?
    1. My first job was looking for some acquisitions opportunities
  9. So what inspired you to the most recent version of: Valuation: Measuring and Managing the Value of Companies, the 7th Edition?
    1. This is the 7th edition of the book, 
    2. We update it periodically to reflect topics happening in the moment
  10. Tim Koller, how this coronavirus panic and shutdown of entire states and industries impacted how companies are valued?
    1. Not every company and industry has declined at the same rate
    2. The market has been able to show who will benefit from the shut down
    3. There is a lot of uncertainty with regards to the recession in the market
    4. There is a lot of risk and a lot of opportunity right now
  11. How does McKinsey stay on top of the pulse of everything?
    1. We don’t publish anything that is not already public domain
    2. We do help clients anticipate and take actions strategically to deal with potential obstacles
  12. How do you feel the average business owner should react to this coronavirus economy?
    1. It really depends on their starting point or how the shut down is affecting them.
    2. Make sure that you have the liquidity you need lined up so you can make sure that you can survive through this time.
    3. We think it is essential that you think about the well-being and safety of your employees and consumers.
    4. Think about ways that you can encourage customers to come back to your business once everything is over.
  13. Tim Koller Do you have any advice to present a valuation on a business during this time?
    1. I think this is a time where you have to focus on what is the best case I can make for when the business comes out of this.
    2. I want to be specific about the plan and quickly get back on track to generate revenues and cash flows
    3. Be as prepared and knowledgeable about how the situation is affecting you and your business.
  14. Tim Koller How, you come across as a very proactive person…so how do you typically organize the first four hours of your and what time do you typically wake up?
  15. What are a few of your daily habits that you believe have allowed you to achieve success?
  16. What mentor has made the biggest impact on your career thus far?
  17. What advice would you give the younger version of yourself?
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