Global food manufacturer, 45bn revenue, 130k employees
“Give us recommendations on how to approach designing our portfolio strategy. Help us understand the difference between vision and strategy and provide us with best-in-class case studies, in- and out-of-category.”
Approach
Define and delineate the terms ‘vision’ and ‘strategy’
Scope companies that have undergone portfolio strategy shifts in different situations (e.g. turnarounds, expansion, M&As)
Create portfolio strategy case studies (in-category and out-of-category), help us understand how others do it
Synthesise the case studies into principles’
Translate the principles into recommendations on how to approach portfolio strategy design
Provide portfolio strategy recommendations
Portfolio Strategy Characteristics
When researching portfolio shifts of other multinationals have gone through a few main characteristics emerged:
Companies with more than one service or product take advantage of synergies between them and leverage existing scale or potential for scalability
When managing a portfolio, companies segment their products, brands or services in meaningful ways. That could be by capability, region, customers, content or other depending on the industry they’re in
Successful portfolios have the right balance of diversity, managing risk, but also making space for riskier elements in their portfolio to maintain both competitiveness and resilience
If we look at the portfolio shift that companies have gone through, i.e. the journey they’ve undergone we can also identify key characteristics for success:
They’ve used a vision to rally around
They bring people along the journey, inspire and help them see how they can contribute to the health of the business and what’s in it for them
They break down vision and purpose into collections of objectives and actions that are measurable
They take an ecosystem view on their business, considering external drivers, e.g. competitors, political agendas, infrastructure they depend on etc.
Case Studies
The case studies revealed 5 different portfolio vision types:
Extrinsically oriented portfolios
Intrinsically oriented portfolios
Care-takers
Visionaries
Change-makers
Each archetype highlights a portfolio intent that reveals a company’s strategic methodology and drivers of decision-making.
Keywords: portfolio strategy, decision-making, best-in-class
Why case studies?
It can be invaluable to have case studies to draw on for several reasons: to do due diligence, make a case towards leadership teams and boards, questioning assumptions and informing processes and approaches. A collection of case studies on the same issue can reveal commonalities, principles and criteria that result in a deeper understanding of a problem and plot a way forward.
Scoping a selection of case studies
Scoping case studies is admittedly a bit of an art. You want to select the right dimensions for example size, degree of regulation, business maturity. Then you need to create a long list of organisations to populate the spectrum. Of course you don’t always have the resources to research them all, so you need to select from the list, considering density in an area of the spectrum, making sure you get a good spread that will help you get a deep enough understanding of the issues you want to explore.
Where do case studies come from?
I read a lot of business books and magazines and listen daily to podcasts about businesses, brands, organisational psychology, strategy, consulting and general current business news. This provides me with a steady flow of interesting organisations and their problems. I draw on that knowledge to assemble long-lists. Here are some of my favourite places to start looking:
Current Business News
Two HBS professors in conversation Podcast After Hours
Thought Leadership
McKinsey Insights and Podcasts The McKinsey Podcast and Inside the Strategy Room
HBR articles and Podcasts Cold Call, Idea Cast, On Leadership, On Strategy,
Long listening:
and here is a selection of books I’ve drawn on in the past:
