g-f(2)2809 Mastering Multibusiness Strategies: Aligning for Success

 

genioux Fact post by Fernando Machuca and Copilot

Introduction

The article “Why Multibusiness Strategies Fail and How to Make Them Succeed” from Harvard Business Review, authored by Bharat N. Anand and David J. Collis, delves into the complexities and challenges faced by multibusiness enterprises. It highlights the common pitfalls that lead to the failure of multibusiness strategies and provides actionable insights on how to overcome these challenges and achieve success.

genioux GK Nugget

"Successful multibusiness strategies require aligning portfolio selection, organizational structure, and management processes with the vision of value creation across the businesses." — Fernando Machuca and Copilot, August 23, 2024

genioux Foundational Fact

The article emphasizes that many multi-business corporations fail because they focus too much on the composition of their portfolios and too little on enhancing the businesses within them. To succeed, leaders must determine where their businesses fall on the continuum of relatedness and align their portfolio selection, structure, and processes with their vision of how to add value.

The 10 Most Relevant genioux Facts

1. Common Pitfalls: Many multibusiness corporations focus excessively on portfolio composition rather than enhancing individual businesses.
2. Continuum of Relatedness: Strategies for adding value fall on a continuum from completely unrelated businesses to highly similar ones.
3. Organizational Structure: Each position on the continuum requires a different organizational structure to support it.
4. Management Processes: Specific management processes are needed to align with the chosen strategy for value creation.
5. Alignment is Key: Successful multi-business firms align their portfolio selection, structure, and processes with their vision of value creation.
6. Strategic Potential: A corporation’s scope determines its strategic potential.
7. Execution is Crucial: Aligning structure and management processes with sources of value creation is essential for successful execution.
8. Understanding Trade-offs: Successful firms understand the trade-offs involved in their strategic choices.
9. Value Creation: The focus should be on how to add value to the businesses within the portfolio.
10. Long-term Success: Proper alignment and execution lead to long-term success for multi-business enterprises.

Conclusion

The article underscores the importance of a strategic and aligned approach to managing multibusiness enterprises. By focusing on enhancing individual businesses, understanding the continuum of relatedness, and aligning organizational structure and management processes with the vision of value creation, corporations can overcome common pitfalls and achieve long-term success. This holistic approach is crucial for navigating the complexities of multibusiness strategies and driving sustainable growth.

REFERENCES

The g-f GK Context

Bharat N. Anand and David J. Collis, Why Multibusiness Strategies Fail and How to Make Them Succeed, Harvard Business Review, From the Magazine (September–October 2024).

ABOUT THE AUTHORS

Bharat N. Anand is the Henry R. Byers Professor of Business Administration at Harvard Business School and the vice provost for Advances in Learning at Harvard University.

David J. Collis is an adjunct professor of business administration at Harvard Business School and the winner of the McKinsey Award for the best HBR article of 2008.

Classical Summary of "Why Multibusiness Strategies Fail and How to Make Them Succeed" from Harvard Business Review

In the article "Why Multibusiness Strategies Fail and How to Make Them Succeed," authors Bharat N. Anand and David J. Collis explore the common pitfalls and potential solutions for multibusiness enterprises¹. They argue that many corporations with multiple businesses focus too much on the composition of their portfolios and too little on enhancing the businesses within them¹.

The authors emphasize that strategies for adding value to a corporation's businesses fall on a continuum. On one end, the businesses in the portfolio are completely unrelated, while on the other end, they have many similarities¹. Each position on this continuum requires a different organizational structure and specific management processes to support it¹. 

To succeed, leaders must determine where their businesses fall on this spectrum and align their portfolio selection, structure, and processes with their vision of how to add value¹. The article highlights that successful multibusiness firms understand these trade-offs and align their structure and management processes with their sources of value creation across the portfolio¹.

Ultimately, the authors argue that a corporation's scope determines its strategic potential, but aligning its structure and management processes with its chosen sources of value creation is crucial for successful execution¹.

¹: [Why Multibusiness Strategies Fail and How to Make Them Succeed - Harvard Business Review](https://hbr.org/2024/09/why-multibusiness-strategies-fail-and-how-to-make-them-succeed)

Source: Conversation with Copilot, 8/23/2024

(1) Why Multibusiness Strategies Fail and How to Make Them Succeed. https://hbr.org/2024/09/why-multibusiness-strategies-fail-and-how-to-make-them-succeed.

(2) Eight Reasons Why Businesses Fail In The Food And Beverage Industry. https://www.forbes.com/councils/forbesbusinesscouncil/2024/08/12/eight-reasons-why-businesses-fail-in-the-food-and-beverage-industry/.

(3) Why Multibusiness Strategies Fail and How to Make Them Succeed. https://hbsp.harvard.edu/product/R2405K-PDF-ENG.

(4) Why Multibusiness Strategies Fail and How to Make Them Succeed. https://bing.com/search?q=HBR+%22Why+Multibusiness+Strategies+Fail+and+How+to+Make+Them+Succeed.%22+summary.

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