Ostensibly, discounted free cash flow is the best measurement of a company's value. Strategists, corporate finance professionals, bankers, investors and others use it as one measure of value, and within a corporation, it is a make-or-break metric for a project to get the green light. It is one of the pillars of managerial decision-making today.

Unfortunately, depending on discounted free cash flow is like depending on that hot new golf club you trialled at the range - it works great on the few shots that you're able to try on the range, but when you buy them and you are on the course, your game hasn't changed. You've gone all-in on something that got you a few nice shots here and there, but didn't holistically change your game.

Think about it: discounted free cash flow is usually associated with a specific project that gets you a one-time bump in cash flow for an investment now. This way of utilizing free cash flow assumes that you have amazing projects galore, which is never the case in reality. You need to think holistically about how you are going to reinvest your cash flow and change your game, and ensure you have a platform for reinvestment, not just focusing on the hot new club du jour.  This leads to more stable cash flow, greater opportunity to reinvest that cash flow, and greater returns to shareholders. Utilizing discounted free cash flow gets you none of these benefits. 

We need to change the way we think about making decisions and creating value.  Thats why I wrote "The Exponential Business".