Finance and Capital Allocation:

Research suggests that growth is overwhelmingly determined by the markets in which companies choose to compete. This is why identifying the right trends and making the big moves to capitalize on them is critical to success. Yet most companies passively manage their portfolios, yearly budget cycles do little to change the status quo and new opportunities always play second fiddle to the existing portfolio of businesses. Typically, companies are slow to move resources between businesses. Every year they stick to the same processes for strategy development, capital planning, talent management, and budgeting, and every year the outcome is only marginally different from that of the year before, and the year before that. They do the same thing over and over again but expect different results.

By contrast, highly successful companies are consistent and dynamic resource reallocators. These companies continually grow by investing in high potential existing businesses, developing or acquiring new businesses, and exiting unprofitable ones. They are more resilient in the face of increasing change, more likely to take unbiased decisions, and create more value, particularly in turbulent economic times.

We help clients design more effective strategic-planning and budgeting processes so that they can overcome the inertia that stalls growth and prevents active reallocation of resources. We help executives shake up the status quo and overcome the processes and behavioral barriers that stand in the way of dynamic portfolio renewal.