Portfolio Analysis - Session 4

I really enjoyed Kearn's chapter "Analyzing Your Organization's Portfolio" this week. In my Marketing for Nonprofit Organizations class this summer we spent a lot of time going over how to do a SWOT analysis (Strengths, Weaknesses, Opportunities & Threats), but we did not talk specifically about doing a portfolio analysis. The portfolio analysis instantly appeals to me, because so many non-profits (and companies in general) have lots of different programs. If you don't separate the programs out and analyze them one by one, it is much harder to analyze either the internal or external environment. Separating out the programs and examining them one by one makes it easier to see the different competitive environments your organization operates in, and also allows you to be more critical and decisive in your analysis. By analyzing things one by one it is much easier to see exactly what programs are working well, what programs need to be improved, and which should be discontinued altogether.

As usual, I found myself thinking a lot about Malawi Children's Village (MCV) as I read this chapter. Before, if you had asked me to identify MCV's competitors, I would have a hard time saying who they were. When I look at MCV's portfolio on a program by program basis however, it becomes very obvious. MCV's health clinic competes with Koche Hill Clinic down the road, MCV's secondary school competes with other schools in the area, MCV's village out reach program competes with organizations that care for orphans in orphanages.

The various portfolio analysis matrixes that Kearns describes seem like they would be particularly useful in doing a portfolio analysis of MCV. I like these matrixes because they take into account things like social value and program attractiveness in addition to financial or competitive success (p. 119 & p. 124). For MCV, these things are critical to keep in mind when analyzing our programs. For example our outreach program has been struggling lately, but the fact that it would rate highly on "program attractiveness" and "social value" would eliminate suggesting it as a program that we should divest. On the other hand, MCV's health clinic doesn't necessarily rate as highly on "program attractiveness" because it isn't essential to our mission, so we could think about ending this program and instead relying on a partnership with another organization.

Thinking about program attractiveness helps you to remember an important thing to keep in mind when doing a portfolio analysis. That you need to tie it all back together at the end. As Kearns says "all of [your programs] should work in concert to support the organizational strategy." (p. 111) This makes a lot of sense and helps make sure that you stay focused on your mission when conducting your portfolio analysis. For example it wouldn't make sense for MCV to discontinue the health clinic if we decided as an organization that the mission should focus primarily on the health needs of the orphans.

I hope to encourage MCV to do some strategic planning in the future, and I will definitely advocate that we analyze our internal strengths and weaknesses one program at a time by doing a portfolio analysis.