« Getting Stronger through Stress: Making Black Swans Work for You | Main | Strategy Made Simple - The 3 Core Strategy Questions »



Good article, John. I'm not sure it's a question of portfolios vs none. I agree that spreading resources too thinly is wrong, but that doesn't mean a portfolio approach is also wrong. Portfolios often arise because large companies identify lots of opportunities and want to pursue them. If they have a focus problem with innovation portfolios, they likely have the same problem with other elements of their business.

I agree with your point about the psychology. Large companies are inherently more conservative than start ups, so we shouldn't expect them to show the same "do or die" attitude. They do need to show more persistence rather than giving up too early. Narrower portfolios will help with this.

The approach to portfolios can learn from small entrepreneurs. Firstly, I agree there should be more focus on a number of options that can be resourced appropriately. Second, allocate leaders who are passionate about the options. Third, learn as much as possible, as soon as possible. Last, rely more on judgment and belief and less on "facts".

I think pivoting is less of an issue with large companies; after all, they have more options!



Thanks for a great post.

One of the other challenges of both techniques is that core purpose of the organisation can be muddied in the spread of the portfolio or the direction change of the pivot.

Success will come to organisations that focus on purpose and adapt to deliver a strong and common purpose. Opportunism is not an effective replacement for focused & purposeful adaption.

Rohan Jayasekera

A startup that does a good pivot isn't just taking a random new approach; typically the market has told it what its true strength is and it's responding accordingly. For instance, Game Neverending contained a photo-sharing feature that turned out to be more popular than the game itself, and it became Flickr while the game was shelved.

And for a startup, a "ten to twenty year strategic direction" is not an available alternative.


Good post John. I think that both approaches still have value - but only in the correct context, the classic complex systems story. Pivots still make sense in very early stage startups, but are dangerous in more established organisations, for exactly the reasons you lay out.

I think that the critical issue with the portfolio approach is that it works across a programmatic approach to learning/experimentation. So you can't build a portfolio like a financial investment portfolio, because then you run into the problems that you identify. But a narrow portfolio across a specific problem still makes sense, I think.

To me, the big problem here is seeing these tools touted as one-size-fits-all, and with fairly broad/fuzzy definitions.

The comments to this entry are closed.