Bill Canady explains how CEOs ensure segmentation success through disciplined processes and strict meeting cadences. He emphasizes the 80/20 rule, focusing on one or two high-impact initiatives, and shares how one company saved itself during a pandemic by taking command-and-control over pricing after thousands of unauthorized changes had been made.
Yeah. So looking at it through the lens of the visionary, the CEO, which is how I think about it, my job is to make sure is one, that we actually go through the process. It sounds so simple and straightforward, but you'll be amazed at how many people want to take a shortcut. It's like, ah, we don't need to know that. You know, part of it's mechanical, right? It's just math. The other part is that experience of someone who's gone through it. So the CEO, the visionary's job is to make sure it's absolutely done and it's done correctly. More often than not, you'll find it's going to be a little bit of an iterative process with it. The second piece is that they got to make sure we're on pace on this thing. You can get bogged down into it, and we use terms like progress, not perfection. And what we're trying to say is, hey, this is where we are. What decisions can we make right now? It's going to become really blatantly clear really early on. We're losing money on some of these things. What can we do about it? We're not collecting freight, and freight is costing us 20%, 30%, 40%. Maybe it's costing us all of our profit. How do we solve that right now? Don't wait to solve those problems. As the CEO, those things are important and critical that we go through that and deal with it. And the way that we are making sure we do it, we have these monthly meetings. So you're gonna find there's daily, weekly, and monthly meetings. The team who's going through it, they might be meeting every day, looking at it, getting the data, massaging it, making it make sense, and putting it through their lens, right? The leadership team, the operators are going to be looking at that weekly saying, are we actually happening? Is it actually going on? Are we on pace? The CEO, that leadership team, the— how you— whether you call it the, uh, executive, you know, leadership team or ELT or SLT, whatever you call it, they're typically going to be looking at it monthly. One, it keeps you so you can see the big picture, and it asks, are you actually on, on cadence with And 2, you got to have measurements, right? So, and the measurements that we're looking at the beginning may change over time, but things like, are we in the meat of the company, right? Are we really with the 80% that's doing it? Have we got it focused down? One of the things, people will bring it back to you and they'll say, it's so much bigger than we thought, which is very normal. And they'll have 1,000 things to go do. That is not helpful. You cannot do 1,000 things. You got to pick 1 or 2. Just as we said before, you got to segment. You got to pick a couple of things that you actually can get done. And you actually have to go do those things. So things that we see early on that you would think would be so obvious, would you got to go, well, clearly we're not making money here. How do you actually make that happen? It can be so complex. Do you have the ability to price discriminate? Do you have the ability to have, in other words, 2 different prices of a product for different customers? A lot of systems can't handle that. Another thing that'll happen is you'll put pricing in and they'll have people who have access to the general ledger, the GL, they'll go in and change it. We were in one and we took it, we went and put in the pricing and it wasn't sticking and we could not figure out why. And we looked and there was 11,000 price changes every week going into the system. It's like, how do you have 11,000 prices? Who's actually even doing that? It turns out everyone had access to the system. We spent the next year just eliminating people's access. It was way harder. You think, How could it be? Well, we had like over 25 different ERP systems. Everybody had codes to it, and it went on and on and on and on. You find that as you're doing it. As the CEO, the biggest change I made when we did OTC was I said, we're gonna get pricing if we get nothing else. And once I made that decision, the entire company swung itself around it and we solved the pricing issue. Without it, we would've gone outta business. And here's why. We were going through a pandemic at the time. Our pricing was increasing at greater than 10% run rate annually. We were getting hundreds of price increases in each and every month. We were recovering less than half of it. We would get it in and the salesman or a customer service or with the greatest intentions would not put the price increase through. By getting command and control of the system, we actually saved the company. It took us a little while to get there. So it's interesting about what type of companies struggle. I don't know that it's a unique, uh, like, like, hey, it's manufacturing versus distribution. I think it's more legacy and culture. Businesses that consider themselves to be successful and have long-term, like, employees and all that typically will struggle the most to change, right? They're like, look, we're successful. It's worked for the last 20 years. Why am I going to change anything with it? The other thing that you'll find is a business that has a very strong founder Or has a legacy of a very strong culture, they'll go, we do it this way because our founder did it this way, and this is how we do it. This is our sacred cow with it. Those type of things that have these stories that tie back to great successes in the past they've had with it, those are challenging, particularly if the markets change. A business goes through a natural cycle. When you start out, maybe it's yourself, maybe it's you and your buddy, you'll take any order you have to. It's survival, right? Whatever comes at you, you take it. You figure it out and go. You continue doing that right up to the moment you can't do it anymore. It exceeds your capacity. Either maybe you don't have the time or your team doesn't have the time, but mostly where it shows up is you quit making money. It takes a huge amount of overhead to satisfy all these needs, and you're not particularly good at any of them. Now you've got to decide, well, I can't be all things to everyone. It's what got me here for sure. I couldn't have survived if I hadn't figured it out. But now I got to figure out what I'm actually good at and can make money at. This is that next cycle that they go through. So businesses run in cycles. You need the tools that are appropriate for it. 80/20 will tell you what you are good at.
