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Taking a Portfolio Approach to Growth Investments

For CEOs and CFOs seeking to drive growth, one of the most powerful tools available is a company’s approach to allocate capital across its portfolio of businesses.

Capital allocation at the top value creators is characterized by two distinct practices. First, these companies take a highly differentiated approach to allocating capital among business units in the corporate portfolio. Second, they translate strategy into action by linking strategic priorities to capital allocation, financial plans, and specific growth initiatives, and by actively managing the corporate investment portfolio from the top. This approach consists of four steps:

1. Prioritizing Growth Among Business Units

2. Translating Roles into Actions

3. Differentiating Among Types of Growth Investments

4. Actively Managing the Investment Portfolio

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