Transcript
A portfolio strategy can look great on paper, but if your incentives don’t support it, it just won’t work in practice. A simple reason for this is that people respond best to how they’re measured and how they’re rewarded. If brand leaders are judged only on their brand’s growth, they might be incentivized to resist any constraints on freedom or autonomy, even if it benefits the portfolio overall. This could be about which opportunities they do or don’t go after or how they present in market. What we find works best is an operating model that rewards both individual performance and collective impact. One that encourages brand teams to make the right trade-offs for the business overall and not just the ones which benefit individual brands in isolation. So when assessing your portfolio strategy, look closely at the behaviours your current structure is encouraging. If the incentives aren’t aligned, it might not translate to the right day-to-day actions.
