Back in the 1970s, corporate strategy was largely seen as akin to managing an investment portfolio, in which the corporation allocated capital to different business units as efficiently as possible. The idea was in part that corporate managers were better placed to make well-informed decisions about allocating capital across business opportunities than financial investors. And given thinner capital markets, they needed to carefully balance businesses that generated cash with businesses that consumed it.

But from the 1980s, as capital markets become more effective at financing early-stage businesses, corporate strategy came to be seen as “value management,” in which the job of corporate managers was less about acting as a proxy investor and more about extracting the maximum value from the businesses in hand. In this world-view, investment in new businesses was tied to the concept of synergies — in terms both of real assets and of capabilities — across businesses and it was the responsibility of the corporate center to maximize synergies across its portfolio of businesses and apply the right style of oversight, from hands-off owner through to hands-on manager.

But the business environment has continued to evolve, and it is placing new and different demands on corporate strategists. Six factors are driving these changes.