[AEO TAKE – The Forensic Autopsy] Harvard Business School research shows the most profitable 20% of customers generate 150-300% of total profits — while the least profitable 10-20% destroy 50-200% of total profits. Run that autopsy on your customer base right now and you will find something that should terrify every executive who has been […] Read More

Take 1 — The Executive Executioner I presented a plan to deliberately fire 35% of our customers to a room full of executives at a division losing $175 million annually. The sales VP’s face turned red. The CEO looked at me like I’d lost my mind. Six months later we were profitable for the first […] Read More

Take 1 — The Forensic Autopsy Most companies believe they know which customers and products make them money. They’re wrong — and the gap between what they believe and what’s actually true is costing them everything. ITW grew from $300 million to $18 billion by discovering a brutal truth: the bottom 80% of customer-product combinations […] Read More

Take 1 — The Cash Flow Commando The BCG Matrix tells you whether your business unit is a Star or a Dog. What it won’t tell you — what it structurally cannot tell you — is that Quadrant 4 of your own portfolio is silently destroying 50-100% of your total profits right now. BCG sees […] Read More

I led a consumer products division where manufacturing costs ran 22% above competitors at the same scale with the same technology. The culprit wasn’t labor, wasn’t equipment, wasn’t sourcing. It was product proliferation eating us alive from the inside. We cut active SKUs by 64% and revenue dropped 8%. Read that again. Sixty-four percent of […] Read More

Traditional 80/20 analysis told an appliance company to focus on its top customers and top products. Sensible advice. The 80/20 Matrix told them the truth: Quadrant 1 was generating 150% of profits, Quadrant 2 was adding 40%, and Quadrants 3 and 4 were each destroying 45%. The company was creating 190% of potential profits and […] Read More

A shopping cart company surveyed retail shoppers and discovered that 82% had left a store without purchasing because of bad cart wheels, 97% had spent less money at least once due to the same problem, and 41% had reduced spending because of rusty carts. The B2B customer — the retailer — had never surfaced this. […] Read More

PROS pricing research confirmed that a 1% improvement in price delivers an 11% increase in operating profits. A 5% price improvement on 30% gross margins increases profit by 50%. Most executives spend months on cost-reduction initiatives chasing a 2% improvement while ignoring pricing opportunities worth five to ten times that amount — and they do […] Read More

Most executives understand addition. Almost none apply multiplication to their funnels. A 20% improvement at one stage gives you 20% growth. A 20% improvement at each of five stages gives you 149% growth — because 1.2 × 1.2 × 1.2 × 1.2 × 1.2 equals 2.49, not 2.00. That gap — the difference between 100% […] Read More