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These are the challenges in running an effective portfolio review
EY-Parthenon noted three ways to improve strategy and portfolio review.
When it comes to running an effective portfolio review, 26% of CEOs in Asia Pacific said that their company struggle to compare portfolio businesses against industry performance benchmarks, according to EY-Parthenon’s Global CEO Confidence Index.
Another 26% said they lack of effective metrics to measure how business units contribute to strategy and total shareholder return, according to the analysis.
Other major challenges CEOs cited were the disconnect between portfolio review and necessary mergers and acquisition actions, and lack of alignment across leadership team and board about decisions.
To improve strategic and portfolio review processes and outcomes, EY said CEOs should regularly revisit and update their strategic assumptions that guide portfolio reviews monitoring key indicators, staying abreast of geopolitical and industry developments, and reassessing customer needs.
They should should leverage the emerging capabilities of artificial intelligence (AI) and advanced analytics and data to extend this approach to cover the whole business.
CEOs were also told to encourage cross-functional teams to participate in the review process. This collaboration ensures that strategic decisions are informed by a comprehensive understanding of the company’s capabilities and market position.
The report noted that this also foster a sense of ownership and alignment across the organisation, which can be crucial for successful implementation of portfolio decisions.
