Strategy & Portfolio

Strategy & Portfolio is a critical topic. Knowing were you want to go and ensuring that you have the right businesses in your portfolio is a timeless topic, critical for any business. It goes far beyond the “what”. It determines two things that will make or break a business:

  • Tailwind vs. headwind. Have you selected a strategy and market space that is growing or shrinking? With tailwind the results will be good or great by focusing on growth, with headwinds you will have to restructure ahead of the curve. Both can create value, but in different ways.
  • Focus and execution. Execution depends on strategic clarity and alignment. Even the best team will fail to execute an unclear strategy. And a mixed portfolio with different strategic needs will cause disonance and difficulty in execution.

Speed of execution and adaptation. Strategy has changed significantly as speed increases. When I started working in the 2000s a 3 year strategy was reasonable. Now new faster ways of charting strategies like Zoom In, Zoom Out are the norm. Singularity University with Salim Ismail did a great job during the 2015-2017 period to catalyze this change explaining why technology has made speed fundamentally different. Traditional organizations have many characteristics that slows execution down, making them “slow metabolism dinosaurs” compared with tech native companies. Startups are fast, and large corporates should learn speed from them.

Looking at my beloved telco sector. Over time I have looked in detail at strategy in the telco sector. I applied Zoom In, Zoom Out in 2017 for a 2030 vision of telco for which I stand proud of my industry predictions. The threats to the value chain continue in demonetization and infra unbundling but have been averted in terms of Big Tech bundling of connectivity. I also stand by the mindset changes that I thought necessary, although the potential new businesses I saw haven’t been implemented. The TMT hypersector continues to evolved as charted in 2018, however, the China/US trade-war has created a divide that I didn’t foresee. While the telco opportunities I predicted for 2019 are there it has been difficult to execute on them and translate them into shareholder value.