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A Cause P&L Example Of Value


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An example of the way the Cause P&L diagnosis the causes of business problems

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A Cause P&L Example Of Value

  1. 1. The CAUSE P&L®<br />An Example of its Value<br />
  2. 2. A Cause P&L®<br /> Identifies CAUSES<br /> of Outcomes<br />
  3. 3. Mid-size service business gradually losingcontracts<br />Assignment: Whyis the company losingcontracts?<br />A Real Example<br />
  4. 4. The following findings are drawn from our report to this client.<br />
  5. 5. 1<br />Are customers SATISFIEDwith your overall service delivery?<br />YES<br />85%<br />Are SATISFIED/VERY SATISFIED<br />
  6. 6. 2<br />Would your customers RECOMMEND you to others?<br />NO<br />Only43%<br />Would !<br />Why?<br />
  7. 7. 3<br />Do you understand the company’s STRATEGY to offer value to customers?<br /> YES<br />Percent Agree / Strongly Agree<br />0%<br />100%<br />94%<br />Employees<br />100%<br />Management<br />
  8. 8. Mgmt & Empl’s: What is the company’s strategy?<br />4<br />Management<br />Employees<br />Customers:Which value strategy do you desire?<br /> Not Aligned<br />Percent Selecting Strategy<br />Lowest Price<br />Highest Quality/Innovation<br />0%<br />100%<br />Highest Quality & Lowest Price<br />Customized Solutions<br />Other<br />Don’t Know<br />Customers<br />
  9. 9. The company is losing contracts because it LACKS ALIGNMENT to the right strategy.<br />…internally and with customers<br />
  10. 10. What is Customer Loyalty worth?<br />
  11. 11. What is Customer Loyalty worth?<br />Typical Range <br />Increase Loyalty<br />+100%<br />5%<br />to<br />+25%<br />Change in PROFIT<br />Starting PROFIT<br />Source: The Ultimate Question – Driving Good Profits and True Growth, Fred Reichheld, Harvard Business School Publishing, 2006, p. 15<br />
  12. 12. What is Strategic Alignment worth?<br />
  13. 13. What is Strategic Alignment worth?<br />Strong Performing Companies<br />Weak Performing Companies<br />50%<br />Almost ½ of STRONG Co’s Have 100% Mgmt<br />Align-ment<br />None of WEAK Co’s Have 100% Mgmt. Align-ment<br />Almost ½ of STRONG Co’s Have >50% Empl.<br />Align-ment<br />Less than 1 in 5 WEAK<br />Co’s Have >50% Empl.<br />Align-ment<br />Percent of Companies That Have STRONG Strategic Alignment<br />25%<br /> 0%<br />Management<br />Employees<br />Source: Driving Success: The Incredible Power of Company-Wide Goal Alignment, Success Factors, 2001.<br />
  14. 14. Relevance of This Example<br />Several major studies show that in MOST companies, less than 20% of employees understand the company’s strategy …<br /> …even if they report they do.<br />
  15. 15. Relevance of This Example<br />Several major studies also show that of customers that report they are “SATISFIED” with a vendor … <br /> … 60% are actually actively looking for an alternative.<br />
  16. 16. TheCause P&L®is here.<br />WHY NOT <br />check it out?<br />
  17. 17. TheCause P&L®is here.<br />E-mail…<br />for our white paper, Even a Ferrari Has Blind Spots<br />
  18. 18. Know Why<br />