One of Peter Drucker’s business axioms is “to grow faster, you need to put your best people on your best opportunities.” But, the underlying assumption is that the organization knows what the best opportunities are and that resources are aligned.
Product portfolio management is fundamental to business success. In any economic environment, companies are challenged with optimizing their resources and focusing on the best opportunities for growth.
Managers need to address the following:
- What are the best opportunities for profitable growth?
- Are we focused on the right products to develop and/or the markets to pursue?
- Are we adequately resourcing (people and capital) to our best opportunities?
Portfolio management is not a new discipline. There are books and papers that suggest methods for determining which businesses and products will be the most successful, but some of these tools are oversimplified and can lead to generalized approaches that may not be optimal for your business, market environment, or strategy.
Companies have become extremely comfortable with a phased review process and milestone meetings that address a specific project. Typically, this ad-hoc approach only considers individual opportunities and potential risks. This may be effective at managing individual projects but does not address relative attractiveness (of products and markets) or enable broader strategic decisions about the portfolio (i.e., capital investment priorities, resource allocation, etc.).
The Necessary Changes
Resources are limited. Businesses need to sharpen their focus and align resources to the best opportunities (product and markets) that will enable competitive advantages and produce profitable growth.
The Action Plan
Properly aligning the portfolio with the vision and strategy is not simple. However, ongoing Portfolio Management enables your company to stay ahead of competitors and develop a sustainable competitive advantage that results in above-average industry sales growth and profits.
As the figure above demonstrates, a comprehensive portfolio assessment clearly identifies the focus areas (products and markets) that will be resourced for success.
Market Edge collaborates with client teams to create a winning portfolio that:
- Aligns with your company and business strategy
- Balances risk and value
- Enables resource alignment that matches portfolio priorities
- Defines clear performance metrics for success