Most Portfolios Are Just Guilt, Organised
Nobody kills a SKU for strategic reasons. They keep one alive for emotional ones.
A portfolio review I sat in last year had forty-one SKUs on the table. Four of them mattered.
Not four out of forty-one because the other thirty-seven were bad products. Most of them were perfectly fine. They simply were not doing anything for the business that the four winners were not already doing better. And yet nobody in that room was proposing to cut them.
I want to explain why that happens almost everywhere, and what to do about it.
Last week I wrote about the reaction trap, the habit of mistaking a fast response for a real decision. This is that same habit’s slower cousin. A guilt-driven portfolio is not built in a single reactive afternoon. It is built one reasonable-sounding deferral at a time, over years, until nobody in the room remembers why any of it is still there.
The hoarder’s shelf
Walk into a hoarder’s house and you will not find chaos. You will find order. Everything has a place, a reason, a story attached to it. The newspaper from 2014 is there because it might be useful someday. The broken lamp is there because it was a gift. Nothing in the house is random. Every object survived a decision, and every decision felt reasonable at the time it was made.
Most FMCG portfolios work the same way.
I call this the guilt portfolio. It is what accumulates when a company stops asking whether a SKU earns its shelf space and starts asking whether killing it would upset someone. The person who launched it. The regional team who still hits their number partly because of it. The founder who has an emotional attachment to the flavour nobody buys anymore. None of these are business reasons. All of them are human ones, and human reasons are exactly what keep dead weight alive in a portfolio for years past its usefulness.
In the Execution Gravity Model, this sits under Force 6, Portfolio Overload. The white paper’s own definition is precise. Brands, SKUs, and innovation pipelines exceed what the commercial organisation can meaningfully carry, because sales representative time and distributor attention are both finite. One line from the research says it better than I could. If a sales rep has four hundred SKUs to sell, they sell none of them. They sell what is easiest.
That finding is about capacity. What I want to add here is the mechanism sitting underneath the capacity problem. Capacity alone does not explain why the overload persists once it has been identified. Overload is rarely a launch problem. It is almost always a subtraction problem, and subtraction is the single hardest discipline in commercial management. Subtraction requires someone to say out loud that a decision made in good faith three years ago was wrong.
That sentence is harder to say than it looks. Killing a SKU is never just a spreadsheet exercise. It is an admission. Someone championed that product. Someone built a career milestone around its launch. Someone in the room today may still be that person. So the portfolio grows a defensive shell around its own history, and every new review inherits the accumulated guilt of every review before it.
How the guilt accumulates
The mechanism is almost never dramatic. It is death by a thousand reasonable exceptions.
A SKU underperforms in its first year. Nobody kills it, because launches take time to mature and the team argues for patience. Reasonable, on its own. The SKU underperforms in year two. Nobody kills it, because a promotional calendar is already booked around it and cancelling mid-year looks worse than letting it run. Also reasonable, on its own. By year three the SKU has become part of the furniture. Killing it now would mean admitting three consecutive years of a wrong call, not one. The size of the admission grows every year the decision gets deferred, which is exactly why it keeps getting deferred.
Compare this to how the same company handles a genuinely dead product line, one with an obvious, undebatable failure. Those get cut quickly, almost gladly, because nobody’s judgement is really on trial. The failure was so visible that killing it reads as competence, not confession. It is not the worst performers that clog a portfolio. It is the ambiguous middle. The SKUs doing just well enough that killing them requires a judgement call, and judgement calls are where guilt hides.
There is a second mechanism working alongside the first, and it is structural rather than emotional. Most reporting systems measure a SKU against its own history, not against what else the shelf space could be earning. A product growing three per cent a year looks healthy on its own trend line. It only looks like a problem once you ask a different question. What would a stronger SKU generate from the same distribution slot, the same trade budget, the same limited shopper attention. Almost no monthly report asks that question. It requires comparing what exists against what could exist instead, and most systems are built to track only what exists.
This is worth sitting with for a moment, because it explains why smart, well-run companies still end up with bloated portfolios. Nobody is being lazy. Nobody is failing to read their own reports. The reports themselves are structured to make a mediocre SKU look acceptable, because they measure the wrong comparison. A portfolio review built entirely on individual SKU trend lines will pass nearly everything. Trend lines answer whether something is going up or down. They never answer whether it deserves the space it occupies.
You are reading this because you are the person in the room who asks the second question. Everyone else is already satisfied with the first.
That is not a comfortable position, and it should not be. It is also the only position from which a portfolio actually gets fixed.
The four-question test
The white paper’s own prescription for Force 6 is Mandatory Subtraction. For every SKU added, one must be removed, with a hard cap on active SKU count per representative. That rule is correct and it is the one to enforce at the point of launch. What it does not do on its own is tell a leadership team which existing SKU to remove. That is the narrower problem the four questions below are built to answer, the one Mandatory Subtraction assumes has already been solved.
Here is a way to separate a strategic portfolio decision from a guilt-driven one, run against any SKU under review.
First, does this SKU do something none of the others do. Not something slightly different. Something genuinely distinct in occasion, format, or customer it reaches. If three other products in the range already cover the same job, this one is not diversifying the portfolio. It is diluting it.
Second, if this SKU launched today for the first time, would it get approved on current numbers. This question strips out sunk cost entirely. A product’s history is irrelevant to whether it deserves future investment. If the honest answer is no, the only thing keeping it alive is the fact that it already exists, which is not a strategic reason. It is inertia wearing a business case.
Third, what specifically would the shelf space, trade budget, and marketing attention produce if redirected to the strongest SKU in the range. If nobody in the room can answer this with a number, the review has not actually weighed the SKU against its real alternative. It has only asked whether the SKU is bad in isolation, which is the wrong question, for the reasons above.
Fourth, whose discomfort is actually driving the decision to keep this SKU alive. This is the uncomfortable one, and it is the one that matters most. If the honest answer names a person rather than a customer, you have found a guilt portfolio entry. The SKU should be treated accordingly, regardless of how the first three answers came out.
Run all forty-one SKUs from a real portfolio through these four questions. Typically, as I did, you will find that four or five earn a clean pass. The rest survive on some combination of habit, politics, and a reluctance to relitigate old decisions. None of that is a strategic reason to keep them.
What this actually costs
The cost of the guilt portfolio is not the SKUs themselves. It is everything they are quietly taxing.
Every underperforming product still needs forecasting. It still needs a line in the trade plan, shelf negotiation, and someone’s attention in every monthly review. None of this shows up as a single dramatic cost. It shows up as friction, spread thinly across the organisation, on every SKU that does not deserve the attention it is receiving. A commercial team spending twenty per cent of its planning time on products generating two per cent of profit is not a hypothetical. It is close to the median in most portfolios I have reviewed.
There is also an opportunity cost that rarely gets named in the room, because it requires imagining something that does not yet exist. Every SKU occupying a shelf slot for sentimental reasons is a slot not available to a genuinely new idea. Innovation budgets get cut before legacy SKUs do, almost everywhere. Legacy SKUs have defenders. New ideas do not yet have a track record to defend them with. A guilt portfolio does not just carry dead weight. It actively starves the part of the business that would replace the dead weight with something better.
I saw this play out clearly in a mid-sized snacking business a couple of years ago. Nineteen SKUs, three of which generated over seventy per cent of profit. The other sixteen were not disasters individually. Each one had a defensible-sounding reason to stay. A loyal but small customer base, a listing with a retailer nobody wanted to jeopardise, a flavour the original founder still personally loved. None of those sixteen reasons were about the customer. All sixteen SKUs survived the annual review regardless, for a third consecutive year. Meanwhile the innovation pipeline for genuinely new formats sat frozen for lack of budget. The company was not short of money. It was short of the willingness to admit that money was already spoken for, by products that had stopped earning it.
None of this requires a dramatic culling exercise, and I would actively discourage one. A portfolio purged all at once in a single meeting usually reflects something else entirely. It reflects a new leader’s need to be seen making bold moves, not a considered read of what the four questions above would actually produce. The discipline that works is smaller and more boring. Run the four questions on a rolling basis, a handful of SKUs every quarter. Let the guilty ones surface on their own schedule, rather than forcing a confrontation everyone will resent.
The Execution Gravity Model exists to help operators see forces like this one before they calcify into permanent features of the business.