Principle four: Divide and conquer

In spite of the “divide and conquer” title, this principle is really about choosing the piece of your digital business you want to conquer, and allowing a complete application of core transformation principles to it.

Trying to apply this to all business initiatives at once won’t be successful. However, it’s not that hard to carefully extract your mission-critical, digital-first initiatives and make their transformation a reality.

Many companies spend all their energy on portfolio management but don’t get around to executing their portfolio. This section aims to avoid that failure. As the pace of business continues to evolve at a faster and faster rate, established organizations often find it challenging to transform, innovate and disrupt in a sustainable way — one that doesn’t also disrupt the bottom line.

This challenge can be especially vexing for leaders who are often under immense pressure to concurrently transform, innovate and disrupt at speed and at scale, with only a finite amount of resources to deploy. For them, knowing when, where and how much to invest in business reinvention (i.e. transformation, innovation and disruption) and how much they need to commit to maintain the performance of their established lines of business can be complicated and risky. Moreover, for many established organizations, business reinvention investments often lead to legitimate questions and concerns about how to sustainably fund, prioritize and measure the performance of those investments.

To solve this challenge, leaders must learn to divide and conquer using an adaptive approach to portfolio management that focuses on three key competencies.

The first is talent management, which recognizes that innovation, disruption, revenue performance, and operational productivity are distinctly different skill sets. This means organizations must ensure they have enough of the right talent to allocate to each zone.

The second competency is adaptive portfolio management, which is used to distill the executive vision and business strategy into a visual portfolio of initiatives that clearly articulates priority, the key measures of success, and how capital and talent will be allocated.

The third competency is value-based prioritization, which seeks to continuously assess and re-prioritize initiatives based on their relative value. This is an important capability in an uncertain and continually changing business environment.