Category Archives: Profit Analytics

82. Culture Eats Strategy for Breakfast

Distribution Strategy, Index, Profit Analytics, WayPoint Analytics

What’s your culture?

My title is a quote that had 83,000 Google hits. The quip – attributed to Peter Drucker – is business mainstream. Have you defined your culture? Have you tested your culture against present realities?

To help, search Google for “how to define your culture”. It’s tedious, but worthwhile. Uncovering what you already suspect you are guilty of is the first step towards a culture of innovation and being able to execute well. Like fish, we don’t know we are in water, and getting out of your own pond can lead to great things. As humans, our familiar pond includes cognitive biases like group-thinking and informational obeisance (Google “Emperor’s New Clothes” to learn more).

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60. Opportunity: Be Rid of Large, Unnecessary Credit Costs in Distribution

Distribution Strategy, Index, Profit Analytics

How do you measurably increase a customer’s value, keep and win a larger share of their business, and improve the net profitability of the account? A first step should be to purge the bad habits underlying high credit activity customers and rid your company of unnecessary credit costs in distribution.

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59. Measure Your Vital Intangibles in Distribution

Distribution Strategy, Index, Profit Analytics

The law dictates that you must be able to show financial numbers based on things that are easy to see, count, tax and borrow against. Because financial numbers are ultimately downstream, aggregated symptoms or by-products of your business activity, you won’t find any powerful insights within them or their sliced and diced derivatives.

Why Not Your Measure Your Vital Intangibles in Distribution?

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58. Ranking Sales Reps in Distribution by Their Potential to Switch to a Competitor

Cost-to-Serve Math, Index, Profit Analytics

Many distributors resist vital changes out of vague fears that some sales reps might not like change or its compensation implications. Some fear losing their sales reps in distribution to a competitor and all their loyal customers along with them. Of course, there are many factors that will determine what will happen, including how strong your reps are, whether you can afford to lose a few customers based on the projected new sales, and how many of your customers have integrated contracts. Ranking sales reps in distribution by their loyalty and account profitability is a good place to start.   Continue reading 58. Ranking Sales Reps in Distribution by Their Potential to Switch to a Competitor →

51. Warren Buffet’s Favorite Metrics

Distribution Strategy, Index, Profit Analytics

There are limits to financial analysis. Financial analysis measures what’s easy to see and count in the past, and “the numbers” are all symptomatic outcomes of your controllable input decisions. So, using financial reports to be cost, asset, and cash flow efficient is smart, but you can go one step further and uncover financial blind spots with your own invented models and metrics.

Would Warren Invest in You?

Warren Buffet places big investment bets.  He buys companies that have super-profitable niches, or moats, with a focused strategic effectiveness. These are companies that throw off free cash flow, have great management and a leadership that plans to protect, grow, and leverage the moats. They are also companies that have systems that will scale their moat’s strategy for growth.

How do you measure intangibles like effective strategy, management, and systems? Here’s how.

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