When Good Investments Drift: Identifying the Real Operational Blockers
This is the first article in our series on Portfolio Performance: From Drift to Direction
The numbers tell part of the story. EBITDA is falling. Cash is tightening. Revenue growth has stalled. Forecasts are being missed.
But these are symptoms, not causes. They tell you what is happening, not why.
As a portfolio manager, you’ve likely faced this situation: a business with fundamentally sound operations, a capable management team, and a valid market opportunity that somehow isn’t translating these ingredients into the expected performance.
The question isn’t whether drift is occurring; the metrics make that clear. The real challenge is identifying what’s actually blocking progress beneath the surface.
Beyond the Dashboard: Where Operational Blockers Hide
The most significant operational blockers rarely appear on management dashboards. They hide in the spaces between metrics, in the patterns of decision-making, and in the subtle dynamics that shape day-to-day operations.
To find them, you need to look beyond what’s being measured to what’s actually happening on the ground. Here are the most common places where real blockers hide:
Decision Velocity
One of the earliest and most telling signs of operational drift is slowing decision velocity. When a business is functioning well, decisions flow at the appropriate pace. When drift begins, they start to stall.
This manifests in several ways:
Decision Elevation: Decisions that should be made at lower levels rise up the organisation. Team leaders defer to directors. Directors refer to the executive team. The executive team brings increasingly operational matters to the board.
Meeting Multiplication: The number of meetings increases, but conclusive decisions decrease. The same topics appear on agendas week after week, with little resolution.
Consensus Seeking: The threshold for agreement rises. Two-person decisions become five-person decisions. Five-person decisions require wider consultation. The pursuit of perfect alignment replaces the bias for appropriate action.
Hesitation Over Adjustment: The management team knows adjustments are needed but hesitates to make them. Small course corrections that could have been made early are deferred until they become unavoidable interventions.
A business where decisions have slowed isn’t just experiencing an operational symptom; it’s facing a fundamental blocker that will affect every aspect of performance.
Misaligned Priorities
In underperforming businesses, it’s common to find not a lack of activity, but a lack of focused activity. Teams work hard and with genuine commitment, but their efforts don’t compound effectively.
The signs include:
Resource Dispersion: Investment, attention, and talent spread too thinly across too many initiatives. The critical few priorities that could move the dial are lost among the trivial many.
Inconsistent Communication: Different functional leaders emphasise different priorities to their teams. What marketing sees as critical, operations views as secondary. What finance prioritises, sales considers a distraction.
Operational vs. Strategic Tension: Day-to-day operational demands consistently override strategic imperatives. The urgent always trumps the important.
Initiative Overload: New initiatives launch before previous ones fully embed. Teams experience change fatigue, and the organisation develops a reputation for “flavour of the month” projects that never fully deliver.
This misalignment doesn’t show up in commitment or effort. The teams are working hard. But their energy dissipates across too many directions to create meaningful momentum.
Execution Discipline Gaps
Even when priorities are clear, execution can falter through gaps in the fundamental disciplines that translate intention into action.
Look for:
The Follow-Through Deficit: Projects begin with energy but fade without conclusion. Initial progress isn’t sustained to completion. The last 20% of implementation, often the most valuable, doesn’t happen.
Accountability Without Consequences: Missed deadlines or deliverables are noted but don’t trigger appropriate responses. Explanations are accepted without adjustment. The commitment-accountability loop breaks.
The Planning-Execution Gap: Plans exist but don’t guide daily activity. Strategic documents sit on shelves (or in shared drives) without meaningfully influencing operational decisions.
Measurement Misalignment: What gets measured doesn’t match what matters most. Teams optimise for tracked metrics that don’t necessarily drive strategic outcomes.
These discipline gaps create a form of organisational friction that slows progress and dilutes impact without appearing as direct operational failures.
Management Capacity Constraints
Sometimes the blockers aren’t in the processes but in the capacity of the team itself, not necessarily in capability, but in bandwidth and focus.
Watch for:
Leadership Overstretch: Key executives have too many direct reports or operational responsibilities. Their ability to think ahead is compromised by the constant pull of immediate issues.
Missing Management Layer: A gap exists in the management structure where key operational oversight should happen. Often, this is at the middle management or director level.
Capability Misalignment: The team’s strengths don’t match the current challenge. A team built for growth struggles with optimisation. A team skilled at operational excellence lacks innovation capability.
Founder/CEO Bottleneck: Decision-making concentrates around a single leader, creating a bottleneck that slows the entire organisation. The business can only move as fast as one person’s capacity allows.
These capacity constraints often develop gradually as a business grows or as market conditions change, making them easy to miss until they significantly impact performance.
Cash and Resource Allocation Dysfunction
While cash constraints themselves are a symptom, how cash and resources are managed can be a fundamental blocker.
The patterns include:
Reactive Cash Management: Cash is managed crisis-to-crisis rather than through structured forecasting and prioritisation. The business lurches between periods of spending and periods of sudden constraint.
Allocation Inertia: Resource allocation follows historical patterns rather than current needs. Budgets roll forward without fundamental reassessment of where investment will drive the greatest returns.
Investment Paralysis: Necessary investments are deferred due to uncertainty. The business underinvests in capabilities essential for future performance while continuing to fund less critical areas.
Misaligned Incentives: Compensation structures and performance metrics drive behaviour that doesn’t align with current strategic needs. The organisation rewards activity that no longer produces optimal outcomes.
These dysfunctions in how resources are allocated and managed often indicate deeper issues in how the business understands its own economics and value drivers.
Finding the Real Blockers: A Structured Approach
Identifying these hidden blockers requires looking beyond the obvious and asking different questions. Here’s a structured approach that has proven effective:
Track Decision Patterns, Not Just Decisions
Don’t just examine what decisions are made; examine how they’re made. Track a sample of significant decisions through the organisation from inception to implementation:
- How many steps did each decision require?
- How many people were involved?
- How long did it take from recognition to decision to action?
- What patterns emerge across different types of decisions?
This decision mapping often reveals systemic blockers that no amount of exhortation about “moving faster” will address without structural change.
Follow the Meeting Trail
Meetings are the nervous system of any organisation. They reveal much about how it functions. Review the meeting structure:
- Map the regular meeting cadence across the organisation
- Examine a sample of meeting agendas and minutes
- Track how often the same topics reappear without resolution
- Note which meetings consistently run over time and which functions are over-committed
This meeting audit often reveals where the organisational metabolism is breaking down.
Conduct Reality-Testing Conversations
Have structured, one-on-one conversations with a vertical slice of the organisation, from senior leaders to frontline managers. Ask these four questions:
- “What are the top three priorities for the business right now?” (Tests alignment)
- “What’s one thing that should be happening but isn’t?” (Reveals blindspots)
- “Where do you spend time that doesn’t add value?” (Identifies inefficiencies)
- “What would make the biggest difference to your ability to deliver results?” (Surfaces blockers)
The patterns across these conversations often reveal the gaps between leadership’s perception and operational reality.
Analyse the Capacity-to-Challenge Ratio
Map the management team’s capacity against the nature and scale of the challenges they face:
- Review role responsibilities and spans of control
- Assess the proportion of time spent on operational versus strategic activities
- Identify capability gaps relative to current challenges
- Evaluate the balance between experience and fresh perspective
This analysis often reveals where management structure or capability needs adjustment to match current circumstances.
Follow the Resource Flow
Track how resources (financial, human, and attention) actually flow through the organisation:
- Compare planned allocation with actual spending
- Identify where resources concentrate versus where value is created
- Map approval processes and decision rights for resource commitment
- Assess the flexibility and responsiveness of resource allocation
This resource mapping frequently highlights disconnects between strategic intent and operational reality.
The Portfolio Manager’s Response: Diagnosis Before Prescription
As a portfolio manager, these diagnostic approaches provide insight without direct operational intervention. They allow you to form a clearer picture of what’s really happening beyond the board reports and executive summaries.
The key is to approach this investigation with genuine curiosity rather than pre-formed judgment. The goal isn’t to find fault but to identify the systemic issues that, once addressed, will unlock performance.
Only with this deeper understanding can you determine what kind of intervention is appropriate:
- Is this a case where operational support would strengthen the management team?
- Does the situation call for capability augmentation in specific areas?
- Is structural change needed in how decisions are made or resources allocated?
- Would clearer prioritisation and focus make the difference?
Without identifying the real blockers, intervention risks addressing symptoms rather than causes. With clear diagnosis, support can be precisely targeted where it will have the greatest impact.
Moving from Drift to Direction
The drift in portfolio companies rarely stems from lack of effort or commitment. More often, it comes from systemic blockers that disperse energy, slow decisions, and misalign priorities.
By looking beyond metrics to these underlying patterns, you can begin the process of bringing direction back to drift. This doesn’t require wholesale change or dramatic restructuring. It requires understanding what’s really happening and addressing the specific blockers that stand between current performance and potential.
In our next article, we’ll explore how to provide the right kind of support once these blockers are identified, support that strengthens rather than sidelines the management team.
Next in the series: The Right Kind of Support: Adding operational input that strengthens rather than sidelines management
About the Author: Trevor Parker works with portfolio managers, chairs, and lenders to bring operational grip, clarity, and progress to businesses under pressure. With over two decades of experience leading and advising companies through transition, he brings a measured, practical approach that stabilises performance without creating unnecessary noise.
This article is part of the “Portfolio Performance” series from Touchline Coach. For more insights on leadership, strategy, and performance from the touchline, subscribe to our newsletter or follow us on LinkedIn.
