Bill Canady shows how segmenting customers and products by value reveals that roughly 25% of company resources go to low-value work. Reallocating that headcount and space to high-value segments creates growth, and frontline employees gain morale and faster wins when they see the data. Leaders must handle resistance from staff protecting their existing work.
So as you segment, right, and as you go through the process, it starts getting really interesting for you, right? So as you're standing here at the beginning and you're looking at your organization, all your resources are fully spoken for and you need more. Everyone's asking you for more. I need more money. I need more people. I need more web. I need all that. Where are you going to get it from, right? So as you segment the data and you start looking at it, you start putting yourself— you wind up with actually 4 buckets, but there's 2 big buckets that you're like, These are the ones that we make money on, both customers and products, and these are the ones that we're not, right? And if you can understand fully where you're not making the money, the resources that are available in that bucket, which turns out to be about 25% of the resources of the whole company, that becomes available to go and surround your key customers and your key products, right? Because think about this, right? You look at your key customers and it's rare that you have them all, and it's rare that you have all the business that they have. So you look at a customer, maybe they've got $100 million worth of, of opportunity with it. How much of that are you getting? If you're getting a significant amount of it, it tells you a couple of things. One is they like us, otherwise they wouldn't be buying from us. And 2, they're paying their bills, otherwise we would quit selling from them. How do you find the resources to go do that? You're already limited on what you have. The only way you can get the resources is to find those areas where you're not making the money, where the customers do not value— you're just kind of a tertiary player with them. If you can capture that headcount, if you can capture that manufacturing space, if you can capture those supplies that can be moved over to it— so the greatest thing that you see when you start segmenting and you look at your team, all of a sudden they understand how they can take and go do it. It becomes clear to them, this is the path. And it becomes clear to them because they're the ones actually looking at it, right? It's not the CEO or the vice president who's doing it. It's the people in there each day slugging it out. Now, all of a sudden, they have a tool where they can see what the customers are doing and what they're not doing, what they value and what they're not, because it's just data. Once they understand that and they recognize what's actually available at the customer, they quickly see, I can do it. I can actually shift my resources over. It's a freeing mechanism from the organization. Now, the biggest challenge you're going to have to do then is you're going to have a whole set of people going, you can't do it, don't do it, it's going to break it, right? The pushback does not come from the customers because customers get it. And the customers who are buying barely don't value you anyway. They're, you know, they're someone else's A customer. For us, they're just here because we have something that maybe they want with it. It's the people inside, right? They look at it as potential loss because even though this customer area is not very valuable to us, at least it is something we have. If that goes away, how am I possibly going to get there? So from a leadership standpoint in the team, it's one, identifying it, and two, giving them the confidence and the tools to know how to shift those resources from what's not working to what is. And now all of a sudden they see a path to go grow the organization. And when that starts happening, morale improves. Customer service starts getting happier. Our customers start getting happier because now your best customers aren't kind of taken care of, they're fully getting taken care of. When you start segmenting and simplifying, that's what you start seeing. You start seeing the wins come really, really quickly, but it's scary and you have to help people get through it.
