It’s almost inevitable: to boost growth when a company reaches a certain size and maturity, executives will be tempted to diversify. In extreme cases—the United States during the 1960s and 1970s, for example—a corporation with a sharp focus on its core business can end up as a mix of strange bedfellows. One global oil enterprise famously acquired a computer business, another a retailer. And a major US utility once owned an insurance company.

Although a few talented people over time have proved capable of managing diverse business portfolios, today most executives and boards realize how difficult it is to add value to businesses that aren’t connected to each other in some way. As a result, unlikely pairings have largely disappeared. In the United States, for example, by the end of 2010 there were only 22 true conglomerates.¹ Since then, 3 have announced that they too would split up.