The Strategy Skills Podcast: Management Consulting | Strategy, Operations & Implementation | Critical Thinking

In this episode, Tim Koller, co-author of Valuation and a leading authority on corporate finance, offers a substantive examination of capital allocation decisions under real-world constraints. The discussion moves beyond theory to explore how CEOs and CFOs should approach resource deployment in mature, capital-rich companies—where investment opportunities are limited not due to lack of ambition but due to economic reality.   Key insights include: - Share Buybacks as Rational Policy: Many firms undertaking significant buybacks—particularly in tech, life sciences, and consumer products—do so because they generate more cash than they can reinvest profitably. Koller argues that, in such cases, returning excess capital to shareholders is not a sign of strategic failure but of disciplined decision-making. - The Fallacy of Diversification Without Advantage: Koller highlights repeated failures by capital-rich companies that expand into unrelated sectors to deploy cash, citing historical missteps in energy, utilities,