Reshaping a Business Portfolio Is Hard—What Separates the Best from the Rest?
The size of a portfolio shift does not predict its success, but a combination of six best practices significantly improves the odds that a major reshaping creates value.
Summary
Hansell, Newman and Farag note that reshaping a portfolio is one of a CEO's most powerful levers, able to expose a company to new profit pools and help it outrun disruption. From 2010 to 2020, about one-quarter of companies shifted their business mix by 30% or more, with mixed results. The authors find no statistical link between the magnitude of a shift and later financial performance. Instead, they identify six factors that together tip the
Editor's opinion
Corrects an intuitive assumption with real data: the size of a portfolio shift doesn't predict its success, only specific practices do.
Key concepts
Portfolio reshaping · Major portfolio rotation · Six success factors