Partner & Director, BCG Henderson Institute Fellow
Ever since BCG’s Bruce Henderson introduced the growth-share matrix in 1970, the concept of corporate portfolio management (CPM) has revolutionized how CEOs and corporate boards think about corporate strategy. Over the years, the discipline of CPM has evolved considerably, with the introduction of new concepts and criteria for portfolio management such as shareholder value maximization and parenting advantage.
But to what extent do today’s corporations actually apply these principles? More fundamentally, how do diversified companies analyze and manage their corporate portfolios? What processes have they established and who is responsible for them? Most important, how satisfied are today’s companies with their current approach to CPM?
To answer these questions, BCG, in collaboration with Freiberg University in Germany, recently conducted a comprehensive global survey on the practice of corporate portfolio management. We received responses from more than 200 CPM specialists representing 196 of the world’s largest global companies in 20 industries.
The results of the survey were recently published in the Journal of Applied Corporate Finance. (Download the pdf here.) Among the key findings are the following: