Corporate Portfolio Strategy: Where to Put the Capital [EN]

This course contains the use of artificial intelligence.

Every organisation has more places to put money than money to put there. The decision gets made anyway, usually by whoever argued most confidently in the room.

Capital allocation is the highest-leverage decision most executives make and the one they are least often trained for.

Where allocation decisions go wrong

The proposal arrives with a benefit and no discount rate, so nothing can be compared against anything else. The acquisition is valued on a multiple somebody heard was standard, and the integration cost is discovered afterwards. Pricing is set at cost plus a margin because that is what the spreadsheet does, and elasticity is never tested. The budget is built by adding a percentage to last year, which encodes every past mistake into the next twelve months.

And the approved project then runs without scope boundaries, so the number that justified it stops being achievable in month two.

Twenty lessons from the finance chair

Forty-two lessons. Twenty of them from the perspective of a chief financial officer: how the function is structured and how it works with a board, strategic planning and forecasting, currency and interest rate exposure, preventive and detective controls, the cash conversion cycle and free cash flow, mergers and acquisitions from due diligence through valuation to integration, budgeting and rolling forecasts including the case for having no budget, six pricing models with elasticity, capital budgeting with net present value and payback, cash management, investment instruments, raising money through debt and through equity, credit ratings, the argument for and against going public, exchanges, investor relations, public reporting, stock plans, and the technology underneath all of it.

Modelling, and turning capital into delivery

The next twelve cover the business model itself: what an efficiency-driven business is, how models evolve from start-up to corporation, translating mission into financial targets, finding process inefficiency, goal-setting people believe, the strategy pyramid, budgeting that supports decisions, indicators across four dimensions, Lean Six Sigma in a finance function, scaling, and what follows efficiency.

And the final ten cover turning an approved investment into a project that delivers it. Business case, charter, stakeholder mapping, scope boundaries, work breakdown, network diagrams, Gantt, a three-stage budget, risk assessment, matrix team structure, control and a closure that actually happens. An allocation decision is only as good as the delivery underneath it, and this is where most of the value is lost.

Who is teaching this

Mike, the number one HR instructor on Udemy. More than 1.6 million course enrolments, over 150,000 professionals trained, PHRi and SHRM-CP certified, HRCI representative in more than 10 countries. I built the people function of the unicorn Preply and worked at Wargaming, Alfa-Bank and iDeals — companies where capital allocation decisions were made in front of me and occasionally by me.

What is included

• Lifetime access to all course materials

• Active instructor support in the Q&A section

• Udemy Certificate of Completion

• Practical assignments and real business cases

• A section with additional courses, tools and resources

A test for your next proposal

Take the last investment your organisation approved and ask what discount rate was used and what the payback period was. If nobody can answer either question, the decision was made on confidence rather than on arithmetic, and the same will be true of the next one. Enrol now and start the first lesson today.