The Strategy Element
The Manufacturing Leadership System™
The Strategy element provides clarity about the company’s products, services and customers. It articulates how the company will compete and differentiate itself, and it puts the pencil to paper on how it will make money. This is NOT academic. It is a pragmatic look into the future, often for the next 3 to 5 years, to set a course that focuses the efforts of the organization.
The Growth Plan is a strategic plan is the document that captures the strategic direction of the company. It is typically 2-3 pages long, which is long enough to capture the key points, without becoming too long and burdensome.
The Profit Analyzer is a tool to peel back the proverbial onion on the costs, pricing and real margins associated with customer and product groups. It provides a different lens than a typical gross margin report generated by your ERP software.
The Growth Plan captures the key elements of a strategy. The exact format and length can be customized, but I have found that keeping the plan to two pages forces conciseness and clarity, while still allowing for enough room to describe the essence of the plan.
Elements of the two-page strategic plan:
- Target Market
- Products & Services
- The Competition
- Differentiators / Your Edge
- Marketing & Business Development Strategy
- The 3-year Vision & Plan
The Growth Plan is needed if:
- The prior plan is out-of-date.
- There have been significant changes to the business or markets since the last plan was developed.
- The leadership team is not fully aligned and committed to the strategic plan.
- 4 4-hour sessions to:
- Define market position
- Create 3-year framework
- Define marketing & business development plan
- Share with the entire company
This covers the 4 4-hour sessions, and they can be done remotely or in-person.
The Profit Analyzer
Companies need a formula for how to make money. Often, in the early stages of the company the formula is obvious, but as the company grows, and customer relationships evolve, the formula and clarity for how to make money can erode. Unfortunately, conventional accounting metrics about profitability can be erroneous and misleading.
The purpose of The Profit Analyzer is to provide renewed insight into the profitability engine of the company.
While each company is unique, the underlying concept is to apply costs to products as directly as possible. The analysis is often enlightening, and it can have a significant impact on the strategic direction of the company.
The Profit Analyzer is need if:
- You tend to win only highly complex jobs.
- Profits are eroding despite sales growth.
- Product gross margin is the primary measure of product, customer, and company profitability.
- Gather product cost data.
- Conduct interviews with department leaders to find cost drivers
- Develop a financial model of product/customer profitability
- Develop the go-forward plan
These projects can vary from being relatively straightforward to quite complicated. I’ll work with you to develop a scope that provides the information you need at a cost that is acceptable.
These projects are among my most expensive, but they have an enormous impact on strategy and financial results.