--- name: portfolio-rationalization-prioritizer description: "Evaluates business units, product lines, or assets against a strategic fit and value creation matrix with financial overlay (ROIC, growth, margin) to assign each a Hold / Invest / Divest / Partner action, ranked by expected value impact, with a sequenced execution roadmap. Use when rationalizing a business portfolio, deciding which units to divest or double down on, preparing a portfolio review for the board, or building the analytical case for a corporate development action." argument-hint: "[business-units] [financials]" allowed-tools: ["Read"] --- # Portfolio Rationalization Prioritizer ## Purpose Plot every business unit or asset on a strategic fit × value creation matrix, overlay financial performance (ROIC, growth, margin), and convert the analysis into a defensible Hold / Invest / Divest / Partner recommendation per unit — ranked by value impact and sequenced into an execution roadmap the board can act on. Replaces gut-feel portfolio debates with a structured, financially grounded case. ## When to Use Invoke this skill when the user asks to: - Rationalize or streamline a portfolio of business units, product lines, or assets - Decide which businesses to divest, invest in, hold, or partner around - Prepare a portfolio review for the board or an annual strategy offsite - Evaluate a specific unit that's underperforming or absorbing disproportionate capital - Build the analytical justification for a divestiture or bolt-on investment thesis - Reallocate capital across a multi-business corporate structure ## Inputs Required Before starting, collect: - **Business units/assets**: List of the units, product lines, or assets to evaluate (names + 1-line description each) - **Financial metrics per unit**: Revenue, growth rate, EBIT/operating margin, ROIC (or best available return metric), capital employed - **Corporate strategy/thesis**: The parent company's stated strategic direction and where it intends to win - **Strategic fit signals**: For each unit — synergies with the core, shared capabilities, brand/customer overlap, cross-sell - **Market attractiveness signals**: Market size, growth, competitive intensity, structural trends per unit - **Constraints**: Regulatory limits, contractual lock-ins, employee/political sensitivities, minimum cash needs - **Time horizon**: Planning window for the rationalization (e.g., 12 / 24 / 36 months) If ROIC is unavailable, use ROA or operating margin as a proxy and flag the substitution. If a unit's strategic-fit inputs are thin, infer from the corporate thesis and note the assumption. ## Instructions ### Step 1: Score Each Unit on the Two Axes Rate every unit 1–5 on each axis, with an explicit rationale. **Axis A — Strategic Fit (1 = peripheral, 5 = core to the thesis)** Weight and score these sub-factors: - Alignment with stated corporate strategy (40%) - Shared capabilities / operating synergies with the core (25%) - Customer and brand overlap / cross-sell potential (20%) - Cost of separation vs. integration (15%) — high separation cost raises fit inertia, flag it **Axis B — Value Creation Potential (1 = value-eroding, 5 = value-compounding)** Weight and score these sub-factors: - Market attractiveness — size, growth, structure (35%) - Competitive position — right to win in this market (30%) - Return trajectory — ROIC vs. WACC, and direction of travel (35%) Show the weighted composite for each axis to one decimal. ### Step 2: Apply the Financial Overlay For each unit, classify against three financial lenses and label the pattern: - **ROIC vs. WACC**: Value-creating (ROIC > WACC), neutral (±1pt), value-destroying (ROIC < WACC) - **Growth**: High (above corporate average), moderate, declining - **Margin**: Above / at / below portfolio median Combine into a one-line financial signature per unit (e.g., "High growth, value-creating, sub-median margin — reinvest-to-scale profile"). ### Step 3: Place Each Unit in the 2×2 Matrix Map composite scores onto four quadrants (split at 3.0 on each axis): - **High Fit / High Value → INVEST**: Compound the winners. Prioritize capital, talent, and M&A bolt-ons here. - **High Fit / Low Value → FIX or HOLD**: Core to identity but underperforming. Hold with a defined turnaround thesis, or divest if turnaround has no credible path. - **Low Fit / High Value → HARVEST or PARTNER/SPIN**: Valuable but non-core. Extract maximum value via partnership, JV, or a well-timed sale at peak multiple. - **Low Fit / Low Value → DIVEST**: Exit. Free capital and management attention. Reconcile the quadrant call with the financial signature — where they conflict (e.g., high-fit unit destroying value), state which signal governs and why. ### Step 4: Assign the Recommended Action per Unit For each unit, deliver a decision block: 1. **Action**: Hold / Invest / Divest / Partner (one word, no hedging) 2. **Rationale**: 2–3 sentences tying the axis scores and financial signature to the call 3. **Value at stake**: Directional capital freed, reinvested, or created (order-of-magnitude estimate) 4. **Key risk**: The single biggest thing that could invalidate this action 5. **Trigger to revisit**: The metric or event that would change the recommendation ### Step 5: Rank by Value Impact Order all recommendations by expected value impact (capital freed + return uplift + strategic clarity), highest first. Separate "act now" moves (clear, high-conviction) from "stage/watch" moves (dependent on triggers or timing). ### Step 6: Build the Execution Roadmap Sequence actions across the planning horizon: - **Phase 1 (0–6 months)**: Quick, low-dependency moves — clear divestitures, obvious reinvestments - **Phase 2 (6–18 months)**: Partner/JV structures, turnaround checkpoints, staged capital deployment - **Phase 3 (18+ months)**: Value-timed exits (sell non-core at peak), M&A bolt-ons around invest units For each phase, note capital flows (in/out) and the one decision gate that must clear before proceeding. ### Step 7: Capital Reallocation Summary Net the whole portfolio: total capital freed from divest/partner actions, total capital directed to invest units, and the resulting expected shift in portfolio ROIC. State the one-sentence strategic outcome of the full rationalization. ## Output Format - **Structure**: Per-unit scoring table → financial overlay → 2×2 matrix placement → per-unit decision blocks → value-ranked action list → phased roadmap → capital reallocation summary - **Length**: 1,100–1,500 words - **Format**: Structured document — scoring and financial signatures in tables, decision blocks as labeled bullets, roadmap as phased lists - **Sections**: Axis Scoring → Financial Overlay → Matrix Placement → Recommendations (per unit) → Value-Ranked Priorities → Execution Roadmap → Capital Reallocation Summary - **Tone**: Corporate development principal — analytical, decisive, board-ready; no hedging on final calls ## Quality Checklist Before delivering output, verify: - [ ] Every unit has a numeric score on both axes with a stated rationale — no unit left unscored - [ ] Each unit's financial signature explicitly references ROIC-vs-WACC, growth, and margin - [ ] Every unit is placed in one of the four quadrants and assigned exactly one action (Hold / Invest / Divest / Partner) - [ ] Conflicts between quadrant placement and financial signal are called out and resolved, not ignored - [ ] Recommendations are ranked by value impact — not listed alphabetically or by unit order - [ ] The roadmap sequences actions into phases with capital flows and decision gates ## Notes - The most common error is over-weighting emotional attachment to legacy units — the strategic-fit axis must reflect the *forward* thesis, not historical identity - A high-fit unit that persistently destroys value (ROIC < WACC for 3+ years with no credible turnaround) should move toward Divest despite fit — capital discipline governs - Non-core assets are usually worth most to someone else; recommend Partner/sell while performance is strong, not after it deteriorates - When scores cluster near the 3.0 boundary, treat placement as provisional and lean on the financial overlay and revisit-triggers to break ties --- ## How to use this skill This file is a Claude Code skill in [Anthropic's standard format](https://docs.anthropic.com/en/docs/claude-code/skills) — markdown with YAML frontmatter at the top. **Installing in Claude Code:** - `~/.claude/skills//SKILL.md` — auto-loads in every session anywhere on your machine (recommended for skills you'll use across multiple projects) - `/.claude/skills//SKILL.md` — auto-loads only when working in that project (recommended for project-specific skills) Restart Claude Code or open a new session to register. **Using in Claude.ai, ChatGPT, Gemini, or other AI tools:** 1. 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