prioritizing profit driving initiatives

www.breakthroughmaster.com

Prioritizing Profit-Driving

Initiatives

APIC

September 17, 2013

www.breakthroughmaster.com 2

•Only 13% of companies are achieving

modest levels of sustainable and profitable

growth

•Typically, 40% of business is unprofitable

Chris Zook, Profit from the Core and Beyond the Core

Jonathan Byrnes, Islands of Profit In a Sea of Red Ink

Are you beating the odds?


Place a Bet 3:1—A Good Bet?

3-1 means 3 times less likely to win. If you bet a dollar, and he does win, you win 3 dollars. You win more money because it was a longshot, less likely to win.


Your Odds? 3:1

25% of investments in growth initiatives

actually result in creating value


WHY?

The odds of getting to CWS 210:1

The odds of getting to CWS if have never gotten there before

Runs scored and created > Home runs


ROI odds low because:

1. Not on strategy

2. Not enough vetting

3. Not well planned/implemented

4. Not well funded

5. Not enough time


Improving the Odds

Odd Inhibitors

1. Off Strategy

2. Not vetted

3. Poorly implemented

4. Not properly funded

5. Too many other priorities

Odd Enhancers

1. On Strategy

2. Case study justified

3. Properly planned

4. Funded adequately

5. Clear priorities


1. What is your Strategy?

Clear identification of strategy relative to others in the market as seen through the eyes of the customer.

Price Meals Lounges

Seating

Choice

Hub

Connections Friendly Speed Frequency


Typical Competitive Map Example

#3

#2

#1

High

Low

Techn Cap

RelnProduct Breadth

Lead Time

Tech Spt

QualityRaw Mat

GlobalPrice


2. Case Study Justified

Vet each initiative or idea against what matters most to the success of the organization and pursue those that rank the highest


Decision Criteria

Maximize Business Value

Strategic Fit Consumer Acceptance

Ability to execute Financial Implications

i. Appeals to target ii. Strong and timely

demandiii. They own the risk

i. Strategic Positionii. Value Propositioniii. Consistent with brand

i. Timing of product in product cycleii. Do we have the skill set/capability? iii. Resource/Time requirediv. Opportunity Cost

i. Size of Opportunity (revenue)ii. Net Present Valueiii. Size of investmentiv. Riskv. Margin


Decision criteria:

Opportunity evaluation (rank 1-5; 5 is top)

Write in criteria Option 1 Option 2 Option 3 Option 4 Option 5 Option 6


3. Properly Planned

Determine activities and schedules as well as resources required

Number Initiative Owner Duration Start End 2012

Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

1 Measures 184 7/1/2012 1/1/20131.1 Establish dashboard measures 153 7/1/2012 12/1/20121.2 Communicate measures 15 12/1/2012 12/15/20121.3 Develop accountability measures for goals at leadership level 26 11/19/2012 12/15/20121.4 Approve goal measures and input into system 16 12/16/2012 1/1/2013

2 Performance Management ∞ 9/1/2012 12/31/20132.1 New meeting procedure 511 8/7/2012 12/31/2013

2.11 Review meeting recommendations 115 8/7/2012 12/1/20132.12 Communicate new meeting structure (assumes project mgmt) 30 12/1/2012 12/31/20132.13 Implement new meeting structure (track through proj. mgmt) 90 1/1/2013 3/30/20132.14 Revise meeting structure to meet needs 30 3/30/2013 4/30/20132.2 Develop training programs for select individuals 60 11/1/2012 12/31/2013

2.21 Research training options (skil ls, leadership) 50 11/1/2012 12/20/20122.22 Discuss training plans with individuals 30 1/1/2013 1/31/20132.23 Formalize training plan; integrate with corporate training 30 1/1/2013 1/31/20132.34 Implement and track 330 2/1/2013 12/31/20132.35 Review and adjust as needed 60 6/1/2013 9/1/20132.3 Implement goal measurement (see 1.4) 16 12/16/2012 1/1/2013

2.31 Quarterly review of goal measures 3 3/31/2013 12/31/2013

Consider implementation of performance management tool 146 8/7/2012 1/1/2013

3 Top Account Profitability Plans 511 7/1/2012 12/31/20133.1 Communicate template to sales reps accountable for identified

top nine accounts

5 11/26/2012 11/30/2012

3.2 Review plan drafts in a one day session 90 12/1/2012 2/1/20133.3 Final plans due 60 2/1/2013 3/31/20133.4 Track plans monthly in sales meetings 240 4/1/2013 11/30/2013

4 Outside In 395 12/1/2012 12/31/20134.1 ID of info available and potential applications revised per budgets 30 12/1/2012 12/31/20124.2 Cross train other users (PM) 30 12/1/2012 12/31/20124.3 Review data applied; ID additional data needs; make budget rec. 150 6/1/2013 11/1/2013

5 Product Life Cycle Management 511 7/1/2012 12/31/20135.1 ID categorization criteria 31 12/1/2012 1/1/20135.2 Run data into template 31 12/1/2012 1/1/20135.3 PM categorizes products 15 1/1/2013 1/15/20135.4 Review categorization with sales and PD 15 1/16/2013 2/1/20135.5 Update template based on use 31 5/1/2013 5/31/2013

Categorize product again and review with sales and PD 31 6/1/2013 6/30/2013

2013

.


4. Adequately Funded

What is the source of funds? Must you stop something else before you invest? What can you stop that no one will miss and you do for ego or tradition?


5. Specific priority ranking

Initiative Importance Urgency Champion

1. Front End Product Identification Study trends and product

performance history

95.1 H Pat

2. Product Development Process Stage gate Process of quotes from factory

95 H Kari

3. Price Strategy and Quotes 90 H Sandy

4. Sales Plan Target customers International

89 H Don

5. Well Defined Roles-Organizational Structure Job descriptions Document key tasks

57 H Don

6. Brand Strategy Plan 85 H Erin

7. Resource Allocation: People Time 78 H Sandy

8. Order Management 76 H Cameron and Leigh

9. Info Sharing on Product in Pipeline 55 H Kari

Imperative to assign a rank to each initiative to manage resources and return


Ranking Initiatives

Initiative Impt Urgency Champion

1.

2.

3.

4.

5.

6.


Competitive Map (proprietary)


Questions?

• 7 Questions to Ask Before You Hire a Strategic Planner

• Blog Sign Up

• Master Breakthrough Growth Minibuk Series

http://youtu.be/j-NU6eFs8aM

http://youtu.be/j-NU6eFs8aM

http://breakthroughmaster.us1.list-manage1.com/subscribe?u=1ff31ba54b9459b3bb9fcb676&id=10f3427d2d

http://www.breakthroughmaster.com/our-products/master-breakthrough-growth-minibuk-series/


