Mini portfolios make up your corporate portfolio

Managing corporate portfolio should not only be concerned with the monolithic total organization portfolio. The company's total portfolio of projects & investments is an amalgamation of many mini-portfolios within the organization.

The management of corporate portfolio is all about managing the various small small portfolios like IT, sales, R & D.

 

WHAT SHOULD ORGANIZATIONS DO?

Organizations must work on optimizing each of the portfolios separately then roll these up into the company-wide portfolio and then do another round of optimization on this larger corporate portfolio.

 

A good example from a article of knowledge @ wharton can be quoted to explain the scenario. Managing small portfolio is like managing different brands under an umbrella. "For example look at Diageo, the drinks company. You could say they’ve got 50 brands – Baileys and various others -- and each one of those is a brand. They would have a profit & loss account and a balance sheet against each one of those brands. It’s really a portfolio of businesses that aggregate up to make Diageo as a whole, and the same for others like Unilever. They have a whole variety of individual brands that go as a portfolio. Unilever said a few years ago, they’ve got 1,600 brands. They wanted to get rid of 1,200 of them, and only needed 400. Those are the 400 that are going to create growth going forward. So they sold off the 1,200 brands. But what they meant is they are selling off 1,200 individual branded businesses to different people."

SO all set to manage your mini portfolios to extend it to corporate portfolios?