PORTFOLIO OPTIMIZATION TO MAXIMIZE IMPACT
1 How does your business strategy lead or inform your brand portfolio?
2 What is the relationship between the different brands and entities?
If in doubt, know that any portfolio program needs to start by asking these four questions:
> renewable energy power increasing— the big players are offsetting commercial risks and ensuring resilience for the future. But changing the shape of an organization’s portfolio isn’t a simple task. There are myriad challenges and considerations to take into account, from securing internal stakeholder buy-in to ensuring coherence and consistency in market. As a brand’s services and products become increasingly complex within a business, the process of optimization is key. In the simplest, most straightforward terms, portfolio optimization means organizing your portfolio in a way that makes it easy to navigate and buy from—maximizing its market impact and value. To diversify successfully and optimize their portfolio, the critical connection between business ambition and brand strategy must be made. Energy companies have to think carefully about how they organize around the long-term goals of the business and the evolving needs of their customers. So, what are the considerations needed to get there? CLARIFY YOUR LONG-TERM VISION Any portfolio optimization program must begin with a clear understanding of the business’s long-term vision. Leaders within the organization need to be aligned around its strategic ambitions and crucially, have a shared understanding on how the company will respond to emerging market opportunities or customer needs. Is it through acquisitions? Divestment? Internal innovation? To define that vision, a thorough analysis of the business’s role in the wider landscape is needed. Any vision must be suited to the market as it is today and as it is likely to evolve in future, and it must act as a guide for the business as new market opportunities arise. UK-based energy supplier Octopus Energy’s vision is to ‘make energy fair,
clean, and simple for all using technology’, for example. NextEra Energy’s is to ‘help lead the decarbonization of the US economy’. Both examples are clear, precise, and can underpin any portfolio- related decision—providing a lens through which to connect all services, solutions and new ventures. In conducting that analysis, you might find that your company’s vision is no longer fit for purpose. This was the case for Norwegian energy company Statkraft, Europe’s largest producer of renewables. Its former vision—’providing pure energy’— didn’t reflect the business’s considerable ambitions as it expands its footprint, nor the passion, drive and expertise of its people. Deciding it was time to clarify its role in the world and set a clear forward direction, Statkraft enlisted Brandpie to engage over 180 stakeholders across the organization and help align the Executive Team around a new future. Together, we landed on a vision to ‘renew the way the world is powered’. As a shared direction for the entire organization, it reflects Statkraft’s unique expertise and capabilities—but also the long-term value and positive impact their solutions create. The response was overwhelmingly positive and led to the business’s highest- ever operating result post-launch. Clarity of vision also has a crucial role to play in uniting the different brands and teams within sprawling energy firms, breaking down silos and ensuring every employee is pulling in the same direction. In two recent Brandpie Energy Voices webinars, industry leaders identified a siloed mentality as one of the most prominent challenges they face today. In short: beginning the strategic process of portfolio management and optimization must begin with alignment around long-term objectives. Leaders need to identify a future-fit structure that gives every product, service and offering a clear, contributing role in the wider portfolio.
Any portfolio optimization program must
begin with a clear understanding of the business’s long- term vision.
28 Brandpie Energy - Issue 2
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