Do you have the right services?
Coming out of a significant change event is a great time to reassess the various services you provide, especially if you find that your customer’s needs and interests have changed, as discussed in my previous blog. Even if you are part of a team that provides services to internal customers within your own organization (sometimes referred to as back-office functions), the needs of those client-facing groups may have also changed as they try to adjust and adapt to the changing needs of those they serve, the external or “ultimate” customer.
Gain Perspective with The Portfolio View A great tool used by for-profits for years is the portfolio analysis. However, non-profits and even departments within an organization serving internal customers can gain insights with slightly modified versions of a Portfolio Analysis. Originating as the Portfolio Matrix in the 1970s and widely attributed to the Boston Consulting Group, the tool provides a structured method for organizations to comparatively assess the products or services in their portfolio. It resembles a scatter plot where the x and y axis are used to help plot how each product or services is currently performing based on two variables. Among for-profits, these two variables are usually projected market growth and market share, however not-for-profits might use increasing / decreasing need (perhaps drawing on a recent Community Needs Assessment), and availability / unavailability of other sources of the service.
The area of the Scatter plot is then divided into quadrants, with each product or service falling in one of these quadrants based on the scores. Each quadrant has different strategic implications. For example, if a service has increasing need in the community (plotting “high” on the vertical axis), and there are no alternatives (plotting far to the right on the horizontal axis), it is positioned in the upper right quadrant, where continued high investment will contribute significantly toward fulfilling the organization’s mission. You can view a more detailed description and illustration on my web site.
The Importance of Balance Major changes or events, such as the pandemic, often result in a temporary, and sometimes permanent, shift in customer needs and interests, which may provide a solid rationale for repositioning one or more services in a different quadrant. You may even discover new customer needs that could be added in one of the quadrants representing emerging and / or growing service opportunities. As you work with a Portfolio Analysis, you might be tempted into thinking that the end game is to be heavily concentrated in that high demand / sole provider quadrant. Strategically, though, long-term sustainability of your organizations or groups is best achieved when there are services in all four quadrants. It may help to think of product and services as having an innate life cycle, beginning with discovery, then growth, then maturity, and finally decline. Having all of your services in the same life cycle stage (or Portfolio quadrant) at once, no matter what stage that is, can have very undesirable effects now or in the near future.
Do you need help is assessing your portfolio against changing customer needs? Do you need ideas on how to “re-balance” your portfolio? Contact me at your convenience.
Jeff
