Each year I look forward to the World Business Forum held in NYC. The collection of business and thought leaders is a unique and valuable experience. The importance of innovation to business was underscored by the choice of the first speaker, Clayton Christensen (architect of disruptive innovation). But it did not stop there, as innovation ideas intertwined many of the speakers’ insights. One that I took notice of was during Trish Regan’s (Bloomberg Television) interview of two CEOs of large companies.
Denise Morrison is CEO at Campbell Soup Company, the international food and drink company. Maggie Wilderotter is CEO of Frontier Communications, a telecommunication company. Further, they are sisters, raised in a home where business and innovation was frequently discussed. When Regan asked them about leadership, the sisters responded with…
Leadership is more about saying no than saying yes.
You have to decide what you are good at, what are your competencies, what is your focus and decide your path.
The CEOs discussed how organizations always have more ideas than they can execute. Leadership involves choosing what actions to take, which also involves choosing those actions to ignore. This is the core of portfolio management — selecting and monitoring the projects most important to the organization. Portfolio management involves four tenets:
- selected projects must advance the strategic direction of the organization – they align with the mission and vision
- the highest priorities of the organization are addressed – projects not supporting priorities are killed
- resources are efficiently allocated only to the most important projects – they are not spread thinly over too many projects
- projects are frequently reviewed and the portfolio adjusted to maintain the optimal mix of high-value projects – projects not meeting the other tenets are stopped (killed), put on hold, or redirected
Proper portfolio management means saying no many more times than saying yes. As the CEOs shared, you have to decide what your organization’s focus is. We all have been in or seen organizations that attempt to work many more projects than they have resources for. Instead of getting the projects completed that can really move the business forward in as little time as possible, the high-value projects get mired with the many important-but-not-critical projects and everything takes too long. Opportunities are missed, markets change, and competitors get better – all because the portfolio management is weak or nonexistent.
While the CEOs addressed the importance of saying no in the context of leadership, how this tactically occurs in an organization is the realm of effective portfolio management.