Anthea Stratigos – August 14, 2016
Having been in this industry long enough to see cycles come and go, never has there been one as extreme as what we’re seeing today in the portfolios of our industry’s largest companies. We’re used to seeing customers going from centralized buying to decentralized buying. We’re used to seeing regime changes in natural ebbs and flows, or consolidation too. But wow, nothing like the X-Acto Knife on steroids pointing sharply at the deconglomeration (the new buzz word in the land of corporates) that’s taken place these past few years.
UBM, Pearson, Thomson Reuters, and McGraw-Hill’s complete makeover to now two disparate companies S&P Global and McGraw-Hill Education with everything else sold, unrecognizable to its former self. Gartner, CEB’s focus on Human Capital Management, ALM on legal and other professional services, or Hanley Wood deep and deeper in construction. D&B is now very focused on two main use cases for its core data. There are dozens of examples of companies honing their portfolio to a razor’s edge to focus on one value chain, one category of industries, key sets of users, or types of data. But what happens beyond the tipping point if, or more likely when, a singular focus faces structural change, economic cycles, changes in customer demands, or worse, all three at the same time? How buttressed can a company be if their singular portfolio goes south?
But how does portfolio diversity play in a market with increasingly dominant competitors and needs to invest in technology, M&A, and scale? Can a leading company be in several sectors at once and compete optimally when separate units have little in common? Are units relegated to being sub-scale unless they are nimbler, faster, or better at something? And will a diversified company have the last laugh when downturns occur and some businesses stay up because they are counter-cyclical and therefore buoy overall corporate performance?
These are very real questions facing CEOs today. Beyond the tipping point, in an era of platforms, mega-mergers, and all things scale, who will win who will lose and what are the essentials for managing business portfolios is super critical. Or are we simply moving, as Outsell’s David Worlock says, to managing portfolios of margins in the same markets vs. managing a portfolio of companies in different markets? To diversify or not to diversify. It’s not an existential question. It’s real.
To discuss the trade-offs, how he thinks about these questions, and to share his experience and advice, we turn to Informa’s CEO Stephen Carter who is bringing his insight to bear on our 9th key to success beyond the tipping point: clarity around your portfolio.
This is an issue CEOs and their boards wrestle with every day. The management consultants want one answer while the ibankers want another, but they don’t live with the consequences. At the end of the day, the board, CEO, and shareholders live with the answers to this question and the impact is real. Join us to explore how to shape your portfolio at Outsell’s 10th Anniversary Signature Event. Mr. Carter was a favorite keynote at our 2014 event, and ever compelling, we welcome him back and can’t wait for his point of view on this essential topic. Register here and join us in London, 5-7 October.
Need a fact-based strategy to help you make the right decisions around your portfolio? Contact us.