Adaptive strategy and execution have emerged as indispensable in our contemporary, rapidly evolving business environment. The operating model – comprising a collection of strategic assets – has been recognized as a focal point in this new paradigm.
Viewing components of the operating model as strategic assets leads us to the next logical progression – applying portfolio logic to manage these assets, thereby creating a landscape of interconnected portfolios.
This approach is crucial for several reasons. For one, it facilitates a holistic understanding of the business’s operational architecture. It allows for comprehensive visibility of each strategic asset and how they interact with others, providing insights into areas of synergy, interdependence, and potential bottlenecks.
Moreover, this approach enables efficient resource allocation and risk management. By treating components of the operating model as portfolios, businesses can evaluate each asset’s performance and potential, directing resources where they’ll yield the highest returns and mitigating risks associated with underperforming assets.
Organizations today, given their complex nature, end up managing a plethora of portfolios. To streamline this process, portfolios can be organized into six broad landscapes or ‘ecosystems.’ These are:
Strategic Portfolio Landscape: This includes high-level strategic objectives, goals, ideas, projects and project resources.
Revenue Portfolio Landscape: This encompasses all the revenue-generating elements within an organization, such as different markets, competition, customers, channel and product/service offerings.
Digital Portfolio Landscape: This involves digital assets, partners, initiatives, and capabilities that are instrumental in driving digital transformation within the organization.
Supply Chain Portfolio Landscape: This includes all elements related to the supply chain, including vendors, logistics, inventory, and distribution networks.
Technology Portfolio Landscape: This covers all the technology assets, including processes, systems, platforms, data and other IT capabilities, crucial in supporting the organization’s operations and strategic goals.
Talent Portfolio Landscape: This involves all aspects related to talent such as skills, individuals, jobs, capabilities and teams.
Each of these portfolio landscapes functions as a smaller ecosystem within the broader operating model, not unlike agile release trains in agile methodologies. They provide the necessary structure to align the organization’s resources and strategic efforts effectively, facilitating smooth execution and quick adaptability to changes.
In conclusion, embracing the concept of interconnected portfolio landscapes is a significant step towards realizing the full potential of adaptive strategy and execution. The ability to manage these portfolios effectively will be the cornerstone of businesses striving to thrive in today’s fast-paced, constantly evolving marketplace.