Why you’ve got to put your portfolio on the move

Every CEO will ask, at least once, “Which business should this company be in?” But the best know it can’t be a one-time question. They keep asking, and change their answer over time. These CEOs put their company’s portfolio of businesses on the move—and outperformance tends to follow. The reverse largely holds true as well. CEOs who rarely ask the question end up with a static portfolio, and serially underperform. Why? Because the market moves on and their company doesn’t. That’s why sitting still is often the worst choice you can make.

We know, because we’ve measured. Specifically, we analyzed detailed financial results of more than 1,000 of the world’s prominent public companies between 2007 and 2017, through a long cycle of downturn, recovery, and growth. Our research makes the clear business case for dynamic portfolio management. What’s more, it points to principles that can keep you grounded during uncertain times and carry you into whatever comes next. Five takeaways in particular emerged from what the history shows:

 
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Πηγή: mckinsey