How do you set one strategy across very different businesses?

You do not force a bank, a retailer and a contractor onto the same plan. They do not share a market, a customer or a cost structure, so they cannot share a playbook. What they can share is a logic: the same small set of questions about where they compete, how they create value, what they will invest in, and what they will measure. Standardise the questions, not the answers, and a diversified group gets one coherent strategy instead of twelve disconnected ones.

This is the central insight of Goold and Campbell’s work on parenting advantage, published in Harvard Business Review. The corporate centre earns its right to own a portfolio by adding more value to each business than any alternative owner could. That value does not come from dictating a uniform strategy. It comes from imposing a shared discipline through which each business makes better choices.

The four questions

We have found that four questions are enough to create coherence without killing local ownership.

1. Where do we choose to win? Every business defines its target market, its ideal customer, and the segments it will not pursue. A bank answers this in terms of corporate versus retail lending. A retailer answers in terms of format, location and price point. The question is the same. The answer is entirely different.

2. What is our right to win there? This is the capability question. What do we do, or what could we build, that gives us an edge competitors cannot easily copy? BCG’s work on corporate parenting stresses that the centre should be clear about which capabilities it provides and which belong to the businesses. Shared procurement might be a real advantage. Shared marketing almost certainly is not, if your businesses serve different customers.

3. What must change this year to close the gap? This is where strategy becomes action. Each business identifies the two or three moves, a market entry, a cost restructure, a leadership hire, that will most shift its competitive position in the next twelve months. The centre does not pick the moves. It challenges them, funds them, and holds the business to them.

4. How will we know it is working? A small set of measures, financial and non-financial, that each business reports against. The measures will differ in detail, but the structure should be consistent so the group CEO can compare progress across the portfolio without drowning in incompatible dashboards.

Why this matters more in a diversified group

A single-business company can rely on a shared context. Everyone knows the customer, the product and the competitive set. In a diversified group, that shared context does not exist naturally. The McKinsey research on operating models is clear: the centre must define what is common and what is not, or it will oscillate between two failure modes.

Over-centralise and you get a corporate strategy that is too abstract to act on. It reads well in a board pack but changes nothing on the ground, because no business recognises its own market in the language.

Under-centralise and you get twelve independent strategies with no portfolio logic. The centre cannot allocate capital intelligently because it has no common basis for comparison. Each business makes its case in its own terms, and the loudest voice or the longest tenure wins the budget.

The role of the centre

The centre’s job in this model is threefold.

First, set the questions and the calendar. Every business answers the same four questions on the same schedule, typically in an annual strategy cycle refreshed quarterly.

Second, challenge and approve. The centre reviews each business’s answers, pushes back on weak logic, and makes the cross-portfolio trade-offs that no individual business can see. This is where capital allocation happens.

Third, provide shared capabilities where they genuinely add value. Shared services, group-wide talent development, and common data infrastructure are examples. But only where the synergy is real, not where it is merely tidy.

A test for your group

Pull up the last strategy submission from three different businesses in the portfolio. If you cannot compare them side by side because they use different structures, different time horizons and different definitions of success, you do not have a group strategy. You have a collection of business plans.

The fix is not a bigger corporate planning team. It is a shared logic, four questions, one calendar, and a centre that earns its right to ask them by adding value in return.