Our Methods: Profit Enhancement and Growth Strategy

Profit growth begins with finding your business’s best assets. Which products or services are truly profitable for your company? Which customers would you consider your “A” customers — those that are most valuable and reliable? When you step back and take a discriminating look at your business, what part is the 20% — the critical core — that leads to all of your profitability?

Asking these questions—as well as many others—is the first and most substantial step in creating a smart plan for enhancing growth. Once you discover where your company’s real value is, you can focus your resources there, zeroing in on your best-performing and highest potential offerings, and then travel a clearly defined path to a business performance transformation.

Living 80/20: Optimize your Business with the Pareto Principle

What is the Pareto Principle? It's so simple to understand, but for most businesses, so hard to apply. Approximately 80% of a company’s value (measured by revenue) is derived from only 20% of its resources or efforts (its product lines and customer base). Pareto called it the law of the "trivial many and the critical few."

Strategex’s Profit Enhancement experts eat, sleep, and breathe 80/20. They have implemented this concept successfully time and time again. The approach is strictly empirical and data-driven, free of bias or canned recommendations. After researching and assessing your fundamentals, Strategex will prescribe strategies to simplify your business and generate both immediate and long-term profitability.

Simplify — Avoid the Most Common Business Mistakes

The Pareto Principle has been widely touted as a business axiom for over a century, but few people appreciate its implications or implement it correctly. Unfortunately, 80/20 is often discussed at length, applied selectively, or even misunderstood. Consequently, few companies who believe they're following the principle see any benefit.

You Can't Grow Your Way to Profitability

That may sound like heresy to many, but it's been proven time and again in every industry. Choose your business goal: do you want to just get bigger and bigger — more products, more customers, more employees, more factories — or do you want real earnings growth? If true profitability sounds like the correct objective for you, let us show you how to get there.

Lean is Great, But It's Not Always the Solution

We have plenty of respect for lean manufacturing and its adherents, but lean is not Step One to profitability. Why? True profitability is based on being highly selective in your business efforts and focusing on your best resources. Applying lean practices to nonperforming resources can, at best, reduce your losses.

Simplify and Improve First-Pass Yield

Maintaining a wide array of products or services can stretch your resources thin and limit quality, making it nearly impossible to reach Six Sigma. We show businesses how to improve sigma levels and reduce overhead costs through the process of Product Line Simplification (PLS). Once you've simplified your offerings and have begun to produce better quality products, you can then apply lean principles to make those manufacturing processes the most efficient they can be.

Our PEGS Process

Our experts have extensive experience assessing and developing custom strategies to significantly improve top-line and bottom-line growth; they have had proven success hundreds of times. Through a trusted partnership, Strategex works with the client to teach them how to maintain the growth and keep ascending to the next tier of profitability.

Through three phases — Assessment, Prescription, and Execution — Strategex’s Profit Enhancement experts will dramatically drive your earnings growth. Our PEGS process includes:

• A robust analysis of the company’s business performance and results (including customers, products and services, SG&A expenses, margins, profit and loss, employees, manufacturing, and operations).
• A proven means to sort the business based on business performance (including quartile analysis, quad analysis, and zero up).
• A common language and understanding for the entire organization to make decisions that directly impact business performance with access and authority in each and every functional area within an organization.
• A set of prescriptions that significantly improve business performance (including target selling, business and market segmentation, pricing practices and policies, simple systems, minimum orders, compensation designed to change focus and behavior, and outsourcing).
• A holistic approach to managing the business for record-level business performance. The entire organization will have clarity on the language, principles, policies, mission, vision, goals, and culture that optimize business performance.
• A transformation and equipping of the leadership with new skills and capabilities that relentlessly focus on business performance (including operating income, growth and acquisitions, and competitive differentiation).
• A sustainable process to drive business performance for a lifetime. 80/20 never ends; profitability is sustainably high, business performance and results transcend economic conditions and business valuation rises with dramatic proportions.

Your business will have an acute understanding of your critical customers’ needs and develop a clear path to new product innovations and new market opportunities. Our assessment includes:

• Analysis of past three years of P&L's
• Analysis of your customers and products
• Touring the manufacturing facilities and understanding manufacturing cycles
• Understanding the sales cycle
• Analysis of administration and accounting practices
• Understanding the current culture of the organization
• Basic training of the 80/20 philosophy

Implementation of our recommendations may use a combination of the following tools:

• Zero Up
• Product Line Simplification
• Segmentation
• In Lining / MRD
• Outsourcing
• Direct Costing
• USa (Understand, Simplify, Act/Automate)
• Target Selling
• Raving Fans Programs

True Business Transformations — The Strategex Difference

Strategex’s PEGS consulting services are unique. We devise complete and tailored strategies. Starting from the ground up, we thoroughly analyze your business’s offerings, production and selling methods, customers, and management. Our strict adherence to in-depth analyses and acting on that data sets us apart from all other growth consultancies. We pass our knowledge and skills on to our clients, enabling them to sustain profit growth on their own.

Let the Data Do the Talking

We believe heavy research and analysis leads to the development of strong, accurate, and effective strategies. We don’t just offer up advice; we reform the way you approach production, selling, and planning.

Some of the data that we assess includes:

• List of customers, by revenue, for the most recent full-year period
• List of products, by revenue, for the most recent full-year period
• “Cross tab” of customer/product purchases (who bought what) for the same most recent full-year period
• P&L’s from the three most recent years
• Balance sheets from the three most recent years
• Company incentive programs
• Transaction data on invoices, payables, receivables, etc.

Time-Tested Success

Our seasoned experts aren't theoreticians, lecturers, or workshop leaders. They've had years of real P&L responsibility, with track records of earnings and profitability growth in once-stagnant businesses. We teach clients not only how to enhance the value of their business, but to maintain a continuous growth path on their own. Strategex’s ability to empower management teams with the knowledge and skills to sustain a returns-oriented growth culture is an invaluable advantage that most other firms can’t provide.

Building Strong Partnerships & Providing Invaluable Experiences

Strategex takes pride in the relationships we build with our clients. Our experts will learn everything about your business — where it’s been and where it wants to go. We deploy small, dedicated teams of senior-level principals — often on-site for much of the execution phase of a project — to provide your company with unparalleled attention.

Our one-on-one coaching helps clients understand and fully embrace the methodology and solutions that lead to success, allowing the client to “own” the transformation process. This is key to the long-term success of Strategex’s recommendations.

Committed Clients, Great Outcomes

We’re committed to our clients. Dedication, partnership, and cooperation are core values at Strategex and are key to achieving successful outcomes. We believe it’s critical for our clients to be equally committed to improvement through partnership.