Strategic Insights 12
HOW TO GET
MORE (PROFITABLE) “BUSINESS GROWTH?”
A recent survey of CEOs across industries found
that the #1 overall goal is for “business growth”.
With net-profit ranking reports for –
customers, items, suppliers, and sales territories – it is easy to focus on the
few accounts that can contribute big moves in net-profit. Every branch manager
needs to focus on about 5 accounts in three different groups: super-profitable,
super-growing, and super-losing (to fix).
How might “Joe Branch Manager” (JBM) proceed?
SHARE OF RIGHT, PROFITABLE ACCOUNTS (A Dream Scenario of JBM’s)
(Scene 1: JBM is calling on a honcho at a 5-most-profitable
- or big upside - account)
JBM: “Mr. Whale we think that if you give
us more business, then we can make more money and then grow along with your own,
innovative, organic-growth trend.”
MR. WHALE: “That’s true, but why should we
marry you? All of your competitors are begging us for the same favor with lower
prices? What is your compelling, value proposition that will grow my bottom
line better than what your competitors are offering or can quickly match?”
JBM: “Well, we aren’t mind readers about
what “best value” is for you and your company. We need your help to define the service
metrics and processes that will give you best value at two levels. For basic
service excellence, we will guarantee zero errors and 100% on-time delivery or
pay a penalty/upset fee. And, we have some ideas for more basic service metrics.
For level two, we need to understand how we should deliver what mix of products
to and through your business in what process-way to minimize all hidden procurement
costs and maximize your company’s up-time, on-time productivity and value for
your customers. We will assign whatever resources are necessary to make this
vision happen. Shall we at least work together to get to a written plan that we
MR. WHALE: ‘Interesting and unique pitch! Other
reps don’t discuss inter-business process economics, and they can’t request back
up resources to invest in making those ideas happen. How shall we proceed? (Scene fades as JBM moves toward the written plan.)
2: JBM MOTIVATES THE TEAM TO ACHIEVE GUARANTEED PERFECT SERVICE (+)
assumes that if he:
pictures of 5-10 key customers on the wall…
that every employee know them by heart…
all to practice, first-priority, make-perfect-service-happen with extra-efforts
(“heroic acts”) for these few accounts…
service excellence (+) will happen.
he can assemble special SWAT teams (with some outside part-timers) to: install,
measure, manage and maintain the new, improved procurement processes for each
But, his troops are tired and hungry. The
branch has been through 3 rounds of layoffs since the fall of ’08 and total
compensation has been cut many ways for a net reduction of over 10% and still
sliding on health care costs.
“What’s in it for me?”(WIIM) they will ask.
Why should they bust their butts to make JBM’s numbers look better?
NUMBERS + SERVICE VISION/PLAN + WIIM NET-PROFIT GAINSHARING = YES!
The fair solution to re-engaging the
“associates” is to treat them and pay them like Joe gets incented on positive
improvement in “net-profit” for the branch. He will share and explain the
branch P&L every month along with the net profit improvements in the 5-5-5
accounts. If the team achieves perfect service (+), and he and the sales reps
do their supply chain value creation work, then everyone is going to earn a
What if it doesn’t work? Joe will entertain
any better ideas. But, business as usual isn’t an option after looking at the net-profit
analytics, tracking and gain-sharing reports from Waypoint Analytics.
Net-profit insights have highlighted “the plan” and will enable its “execution”.
request a Waypoint demo or meet a lot of folks like Joe at the Fall Conference
in Chicago on October 20-21st. Request an invitation today.