This post is based on the 2020 DevOps Enterprise Forum paper Four Frameworks for Portfolio Management by Yvette Hatton, Chris Hill,Dwayne Holmes, Ken Kennedy, Jabe Bloom, Mik Kersten, Peter Moore, Nithya Ruff, and John Willis.
Disruption comes in many forms. Technological advances make current products and ways of working antiquated or obsolete. Global pandemics can permanently alter industries and methods of conducting business. Evolving societal preferences change the way consumers engage with a product or service.
Change is the only constant that businesses face. The most successful businesses are not those with the largest market cap or the strongest balance sheet. Instead, they’re those that can regularly adapt to change—whether small, routine adjustments or significant business transformation—to survive and thrive.
Successful execution of business transformation is the most significant leadership challenge senior executives can face. Not only does it demand rethinking long-held beliefs about what has made the company successful in the past, but it also calls into question the fundamental changes the company has to make to compete as a digital enterprise in the future. As such, any business-transformation initiative must start with the CEO and the board agreeing on what the outcome needs to be.
Here are some core questions to get the business-transformation dialogue started:
- How long can the company’s current business model deliver its desired business growth goals and financial results?
- How vulnerable is the company’s business model to being digitally disrupted?
- How well can the company leverage digital technology for increased competitive advantage and organizational agility?
- How open is the company’s culture to changing the way it does business?
As Geoffrey Moore said in his book Escape Velocity, “freeing your company’s future from the pull of its past” will be the differentiating factor between success and failure for companies of all sizes across all industries.
At its essence, business transformation is all about freeing a company’s future from the pull of its past.
Faced with finite resources, capacity, and budget, executives must make difficult prioritization and investment decisions, examining a portfolio and assessing many attributes of each offering.
Fortunately, there are frameworks executives can use to guide their decisions. By using more than one framework, executives can improve their decision making and improve confidence in their strategy and plans.
In the following posts in this series, based on the 2020 white paper Four Frameworks for Portfolio Management, we will cover four valuable frameworks and how they can be applied to bring structure to a constantly changing product landscape.
- Historical Performance Analysis: evaluating historical revenue growth & profitability.
- Applying Complexity Science to Decision Making: using scientific inquiry to tailor the strategy based on availability of data.
- Forward-Looking and Predictive Metrics: considering leading indicators to inform future results.
- Zone Management for Business-Value Creation: segmenting and categorizing to prioritize investments and tailor approach.
Using these frameworks, change agents can confidently chart a path that will help their company succeed in a highly dynamic world.