---
id: "action-rigorous-capital-allocation"
type: "action-item"
source_timestamps: ["\\\"§ So Long", "Cheap Capital\\\""]
tags: ["corporate-finance", "strategy"]
related: ["concept-value-based-management", "framework-capital-allocation-constrained-world", "claim-growth-over-returns-fails"]
action: "Shift strategy to prioritize the quality of returns over growth through rigorous, selective capital allocation."
outcome: "Positions the company to outperform and create value in an environment where WACC is in the high single digits."
speakers: ["Michael Mankins", "Matthew Crupi"]
sources: ["reskilling"]
sourceVaultSlug: "hbr-seg-reskilling"
originDay: 10
articleStem: "hbr-sig-49-ai-squeezing-middle-managers"
sourceUrl: "https://hbr.org/2026/06/ai-is-squeezing-middle-managers"
sourceTitle: "AI Is Squeezing Middle Managers"
---
# Implement Rigorous Capital Allocation

**Action.** Shift strategy to **prioritize the quality of returns over growth** through rigorous, selective capital allocation.

**Rationale.** Transition corporate strategy away from prioritizing top-line growth. Implement rigorous capital-allocation processes that invest selectively and maintain a strict linkage between strategy and underlying economics (the discipline in [[framework-capital-allocation-constrained-world]] and [[concept-value-based-management]]; the warning in [[claim-growth-over-returns-fails]]).

**Expected outcome.** Positions the company to outperform and create value in an environment where [[prereq-wacc|WACC]] is in the high single digits.

Related: [[concept-value-based-management]] · [[framework-capital-allocation-constrained-world]] · [[claim-growth-over-returns-fails]] · [[prereq-wacc]]