Assess with Increasing Accuracy

Hello everyone, I'm Bill Kennedy, the 80/20 CEO, and it's great to be with you today. I thought we'd take time and talk a little bit about the thinking that is required. Each year of the business plan begins with a fresh situation assessment. In the first 100 days, this was an effort to understand the business in the present, albeit within the context of its recent history and Of course, with the intention of discerning trends based on the current trajectory of the business. At the start of each full year, under the business plan framed during the first 100 days, you assess the situation. Because you will have a growing amount of data over the coming months and years, you'll be able to assess the trajectory of the business with increasing accuracy. This assessment should be made and completed by the first month's business review each year. By the second monthly business review, the leadership team must evaluate the current business trajectory with a 3 or 5-year goal in mind. Is the present trajectory likely or unlikely to hit the target? If not, what changes need to be made? Even if the business appears to be on course, are there ways to increase the velocity of the journey towards the goal? Are there ways to even exceed the goal, to overperform? By the quarterly review, these 4 questions should be answered and At the quarterly review, management team should be segmenting data and beginning to work on moving as many Quad 4 customers and product combinations towards Quad 1 as soon as possible. At the same time, the performance of the business should be assessed by individual P&Ls within each market-focused business unit. The idea is to apply 80/20 analysis not just to the individual customers and SKUs, but to the entire business units and the markets in which they operate. Which units and markets should be allocated more resources? That is, which should be over-resourced. Conversely, which require simplification so that they can be strategically de-resourced. De-resourcing is typically achieved by reducing the complexity of sales and fulfillment processes by transitioning consultative and other human-mediated sales practices to minimum mediated processes and procedures as far as possible to a wholly automated online. Now, it may take some time to execute the actions associated with simplification, But by the end of the second quarter of each year, simplification should be mostly completed. At the third quarter business review, the impact of the major simplification actions should be assessed and tweaked and adjustments made accordingly. In the first and second quarters, while Quad 4 is being aggressively simplified and simplification actions are underway, zero exercises may begin. These proceed into the last couple weeks of the second quarter And continue well into the third quarter. The objectives of these exercises is to sharpen the execution of 80/20 by determining on a granular level just how extensively resources can be reallocated from lower to higher performer quads. The idea is to flirt with the red line without blowing your engine. The first 100 days are dedicated to earning the right to grow. Very often the great aim of these early days is to turn the business around. That is to position it to start earning the right to grow. In many cases, it would be fair to describe the first 100 days as a rescue or rehabilitation mission. Once those days are past and the business is earning the right to grow, that is, once the full year of the business plan is underway, leadership turns to identifying and assessing growth opportunities. This should begin midway into the second quarter and be used to speed Q2 and Q3 of that quarter and into the first month and a month and a half of the third quarter. It is in this third quarter of each year that the growth opportunities should be acted upon. Let the growth begin. Thank you for taking the time today to learn more about PGOS and the 80/20 operating system. And remember, together we will fly. Together we will fly.