Why Industrial Portfolio Management is More Than a Financial Exercise
We’ve all heard the saying “Don’t put all your eggs in one basket.”
But what if your problem isn’t too few eggs — it’s too many baskets?
That’s the challenge many industrial businesses face when managing complex portfolios. Think:
- Multiple SBUs with vastly different dynamics
- Product lines operating under the same umbrella but with unequal performance
- Regional strategies that follow legacy patterns rather than customer logic
- Sales reps achieving wildly different price points for the same product
And what makes it even harder? The true performance often hides in the details.
🎭 Cross-subsidies: The Hidden Performance Killer
Too often, businesses run with blended P&Ls that obscure the profitability of individual portfolio components.
I’ve seen it repeatedly:
- High performers carry the weight of low-margin products or regions
- Headquarters allocations are spread evenly, with no correlation to actual value creation
- IT, accounting, and sales & marketing overheads wash out product-level insights
- Net sales price deviations go unnoticed or unchallenged
The result? Poor decisions, wrong investments, and missed opportunities.
🔍 The Case for Granular Portfolio Analysis
If you want to improve portfolio performance, you need to treat different parts of your business differently.
That requires:
- Breakdown of overheads to the lowest reasonable unit — be it product, region, or customer segment
- Inclusion of true supply chain cost — from procurement to storage to shipping
- Identification of price realization gaps — not just list price vs. net price, but actual value delivered
Portfolio analysis should start high — for example at the SBU level — and then cascade:
- From product groups to individual products
- From global view to regional profitability
- Across multiple years to identify trends, not snapshots
📈 From Insight to Impact: Portfolio Management as a Transformation Driver
Industrial portfolio management is not just a financial transparency exercise — it’s a strategic transformation lever.
With real, reliable profitability data:
- You can scale the stars — and feed them with the right attention and resources
- You can fix or exit the underperformers — often with dramatic impact on margins
- You can re-align sales and pricing strategies — where people are leaving money on the table
- You can inform make-or-buy decisions — and optimize your footprint
Too many businesses live with complexity they neither understand nor manage.
🤔 How do 𝙮𝙤𝙪 manage your industrial portfolio?
Are you confident that your eggs are in the right baskets?
Can you clearly see which ones are golden — and which might be starting to rot?
If that question makes you pause, it might be time to take a closer look.
Let’s talk about building the visibility you need to take better decisions — with less guesswork.
If you’re about to kick off a transformation and want to get it right from Day One, let’s talk. I work with senior teams to structure, drive, and sustain transformation efforts—with clarity and traction from the start.