Portfolio Optimization Case Studies

    Healthcare Manufacturing

Client challenge: A division of one of the world’s leading health care companies had a portfolio of new products that reflected the different needs of various product line heads.  Senior management was frustrated.  It felt it was making investment decisions as a reaction to the requests of competing product line managers.     

CAP consulting service:  We worked with the senior team to identify objective portfolio criteria that captured the division’s overall growth strategy, including a risk/attractiveness metric.  After mapping development projects against these criteria we coached development managers on how to present their resource requests to senior management in the context of the business criteria.   

Discovery and outcome :  Though product line managers briefly resisted the more rigorous decision-making process, the senior team experienced much greater control over development funds.  Over the subsequent two years, the return on investment in product development  improved and, when surveyed, project managers responded that the new process had helped increase their personal productivity.


    Materials Manufacturing

Client Challenge:  A materials manufacturing company developed a new coating technology that dramatically improved the effectiveness and longevity of industrial tools, dies and molds.  The technology was applicable to all types of manufacturing processes and the company found itself struggling to fund a plethora of new product projects.

CAP Consulting Service:   We developed business criteria to screen the portfolio of opportunities. Following an assessment of the opportunities against these criteria, we facilitated a senior team review to confirm the relative attractiveness of the portfolio of opportunities. The final review included a recommendation on how the company could participate in the commercialization of the strongest candidates with minimal financial risk.  

Discovery and Outcome:  The company adopted a flexible execution model.  They licensed out the technology for minor applications and established partnership subsidiaries for high potential segments.  This bi-modal strategy of licensing and partner-funded development allowed the company to leverage the full potential of the new technology without excessive investment and risk.


   Telecommunications Carrier

Client Challenge:  A major telecom provider in Australia had a new American CEO and several senior managers who were new to their positions.  The company was tackling a wide range of initiatives to accelerate growth and the CEO wanted his team aligned on portfolio and investment priorities.

CAP Consulting Service:  We first coached product development groups to prepare consistent business cases including a clear definition of the concept, confirmation of its fit within the company’s growth criteria and an explicit discussion of its risk. We then moved to the other side of the table and coached the senior team on best practices for portfolio management.  Finally, we facilitated a series of review meetings at which the senior team heard proposals for new products and judged their quality and appropriate investment levels against portfolio criteria including relative risk.

Discovery and outcomeBy the time the CEO returned to the U.S. two years later, he considered the company’s growth management process best in class and, equally important, felt the culture and confidence of the company’s development effort had been transformed.