Managers must build new businesses, adapt existing ones, continually reshape corporate business portfolios for maximum growth, and, at the same time, keep an eye on crucial strategic functions issues:

• What is the best way of inspiring employees to develop and carry out new initiatives?

• How should a company communicate with its core shareholders to guarantee that their expectations are in tune with baseline management forecasts?

• How fast or how slowly should strategic change be pursued?

Build new businesses. Managers must put considerable emphasis on building new businesses instead of focusing on core areas that could not indefinitely sustain growth that was sufficient to meet shareholder expectations.

Adapt the core. CEOs put the future performance of their companies at risk if, in addition to building new businesses, they don’t adapt core businesses to changing markets.

Shape the portfolio and ownership structure. M&A, divestitures, and financial restructurings are rightly considered to be among the foremost tasks of corporate strategists. Reshaping portfolios remains vitally important; companies must actively manage them through repeated transactions, best-performing companies balance their acquisitions and divestitures instead of having a preponderance of either.

Inspire performance and control risk. Management must guide individual and collective action so that they harmonize with a company’s overall strategy and values. Too often, attention is focused solely on formal systems and processes, such as organizational structures, budgets, approval processes, performance metrics, and incentives.

Communicate corporate strategy and values. Even if a company gets everything else right in its strategy, it risks dropping the ball if it can’t communicate effectively. The ability to anticipate the likely reactions of investors is particularly important: key shareholders have in recent years derailed the restructuring or merger plans of several companies and large declines in share prices have claimed the jobs of many CEOs who failed to manage or meet the expectations of their shareholders. Tailoring communications analyses to this constituency’s perspective can work very well. Of course, investor communications are only part of the story. Building support among external constituencies such as consumers, regulators, and media as well as internal stakeholders, which include the board of directors, senior management, and employees, is critical to executing strategy successfully.

Set the pace of change. Companies with otherwise successful plans often stumble by moving too slowly on strategy or too quickly on organizational change. Sequence and pacing are difficult to judge; the factors that affect them include management’s aspirations, external market conditions, and the organization’s capacity to execute a number of initiatives simultaneously. Decisions about the pace of change influence how many initiatives a company runs as well as their complexity. In a short-term turnaround, it is hard to run more than four or five key initiatives; in many cases, two or three are preferable. But in a two- to three-year corporate-performance program, 15 to 20 corporate-wide initiatives may be necessary.