In many firms, strategic initiatives lead to frustration rather than performance improvements and strategic renewal. One frequently overlooked key to driving value through strategic initiatives lies in shifting the focus from launching disconnected individual strategic initiatives to managing an integrated portfolio of initiatives. This article identifies five key management practices that allow firms to address obstacles to effective initiative management and to enhance value creation through the deliberate management of initiative portfolios.

Introduction

In many firms, strategic initiatives shoot up like flowers in the spring–—but, all too often, they are gone before long. Strategic initiatives are important, as they allow firms to tackle the various threats and opportunities in today’s fast-changing business world. Indeed, recent changes in the geopolitical trade environment have created serious challenges for firms operating internationally. Technological changes and digitalization have given rise to radically new approaches and have fostered digital platforms and ecosystems. Additionally, activist investors are pushing harder than ever for better results. However, too many firms find themselves in the following scenario. The CEO announces a new strategic initiative aimed at streamlining processes and improving operating performance, which is followed by another initiative aimed at increasing customer satisfaction. Soon thereafter, top management introduces another initiative to optimize the supplier network, after which the CEO presents an initiative aimed at implementing a new digital business model. Due to the importance of these initiatives, each announcement results in significant investments of organizational resources and management attention. However, within a few months, disenchantment and a struggle for resources take over, leaving managers to wonder what happened. Although some initiatives remain on track, many do not. In some cases, powerful managers acquire additional resources to keep their initiatives going, often at the expense of other initiatives. In other cases, ambitious managers squeeze out superficial results. In still others, initiatives come to nothing or stubborn managers keep working on them long after they were formally shut down. In short, many initiatives never deliver on their promises. Instead, they fuel power battles within the firm and bind management’s attention. Employees learn to sit them out and resistance to change grows. Finally, new initiatives are met with even more skepticism.