Supporting Strategic Decision-Making & Profitability
The Situation
A well-known, $250MM maker of housewares products had responded to a stagnant category by launching a series of new products and new brands. Because of outdated financial systems and processes, the Company was reporting inaccurate estimates for expense allocations which led to inaccurate profitability at product, customer, and brand levels. A new COO was brought in to assess the true profitability of the new products and brands, and to rationalize brands and categories.
Services
Stakeholder Reporting & Strategic KPI Enhancement
Actionable Business Analytics
Budgeting & Forecasting Process Improvement
The Execution
Our Accordion team was brought on board to completely reconstruct product and brand-level P&Ls based on defined activity. To achieve this, our engagement entailed:
- Working across departments to build a map of resource usage over a brand and product lifecycle, from concept through design, prototyping, marketing launch and ongoing sales.
- Determining which expenses could be meaningfully allocated and building new P&Ls based on these categories, which enable senior management to focus on the real drivers of strategic decision-making
- Identifying where the workforce was spending time, by individual employee name, including non-headcount resources
- Developing a series of data-visualization tools, enabling management to quickly determine which products, down to a SKU level, were growing, which were trending more profitable and which represented the best performers.
- Building a product development roadmap to ensure new products and brands would be profitable or would be terminated before significant investment.
The Results
Over a series of board meetings, we presented our findings about where the Company’s resources had been spent for the prior several years, and by extension, which categories should be supported and which discontinued.
- In its long history, neither the Company nor its investors had produced this information or examined the business this way. The company used these findings to make a series of strategic decisions leading to increased focus and profitability.
- We left behind a series of processes and tools which the company continues to use to measure profitability, analyze leading indicators and make decisions.