Portfolio redesign: Mapping value growth in complex portfolios

PLEASE NOTE
The Mercer Management Journal is dead. If you click through you will be taken to the Internet Archive site to find an archived copy.

As companies have grown in size and complexity, delivering sustained superior performance has become increasingly challenging. Today’s large corporations compete across multiple product and service markets, value chains, and geographies – each of which is experiencing major shifts in economics and opportunities.

The typical approaches to charting portfolio strategy are no longer adequate. Neither the “hands-off” financial manager focusing on the numbers nor the synergy manager providing shared services can adequately address the opportunities and perils of today’s shifting strategic landscape.

The lens of business design offers a far more effective approach. You can map your portfolio along the business designs that the firm employs and the economic neighborhoods in which it plays or could play. This can quickly identify common risks and new “white spaces” of opportunity, as well as provide a solid framework for telling investors how the pieces of your company fit together.

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