In our fast-paced business world, the significance of adaptive strategy and execution cannot be overstated. At the core of this new paradigm lies the operating model, comprising various strategic assets.
When we view these components of the operating model as strategic assets, a natural progression is to apply portfolio logic to manage them. This creates a landscape of interconnected portfolios, which is instrumental for several compelling reasons.
First and foremost, this approach allows for a comprehensive understanding of the organization’s operational architecture. It reveals how each strategic asset interacts with others, highlighting areas of synergy, interdependence, and potential bottlenecks.
Furthermore, managing portfolios collectively enables efficient resource allocation and robust risk management. By treating these assets as interconnected, organizations can evaluate the performance and potential of each one. This evaluation guides resource allocation, directing them where they will yield the highest returns while mitigating risks associated with underperforming assets.
In essence, this approach encourages a systemic view of the organization. Instead of operating in isolated silos, portfolios are juxtaposed, and the interrelationships among their objectives are explored. This systemic approach recognizes that the success of one portfolio can impact others and that understanding these dynamics is essential for effective decision-making.
Embracing the concept of interconnected portfolios is a significant step toward realizing the full potential of adaptive strategy and execution. It encourages a systemic view of the organization, highlighting the interdependencies among strategic assets. By managing them collectively rather than in isolation, businesses are better equipped to thrive in today’s ever-evolving marketplace.