Strategic portfolio management can give your company leverage to meet its growth goals and renew its products and services to avoid obsolescence and commoditization. The process doesn’t have to be complex and bogged down in details. There are simple, powerful tools you can use to create great results.
Complexity comes from over-emphasis on optimization. You’ve probably been in one of these portfolio decision meetings: a bright portfolio analyst presents a massive PowerPoint deck, with every cut of the data and answers to any question anyone might have. The analyst has several good insights about the portfolio, and plans to walk through all main charts and metrics to gain approval of an “optimal” set of portfolio recommendations.
This approach rarely works. While everyone says they want to come together to make the choices that are best for the company, the optimization approach unintentionally activates a great many biases in decision making. It leads to information overload and recommendations that rely on an unachievable level of precision.
Often participants use the complexity of optimization to derail the process into polite politics and arguments about data quality. That’s a great way to sidestep decision making and avoid facing tough choices. It gives executives excuses to do what they wanted to do anyway.