I scan a lot of articles, with one of my research themes being return on investment for analytics, for which there are frustrating results.
One survey finds 70% of companies are not benefitting from their analytics investments. And it gets worse. The percentage of firms thinking themselves as data-driven has declined.
Over the past three annual 2019 Big Data and AI Executive surveys by New Vantage Partners, 37% were date-driven in 2017, compared to only 31% in 2019 (Google this survey for even more stats).
Why the analytical-insight execution gap here?
Be honest: Most individuals and businesses already know what they could do to be better. Who needs even more analytical insights for more improvement opportunities? What’s needed, instead, are more effective change-management strategies, tactics and tools. Most folks need help to be what they want to be.
How can a distributor immediately engage all employees’ minds, hearts, wallets and team spirit to move down a new path of innovation?
Try getting on this logic train
Discuss with all employees:
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Who wants more total compensation along with job security, growth and pride? The answer should be 100%, yes.
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Then, we must, at least, grow gross-profit dollars per full-time-equivalent employee (GP$s/FTEE) because only GP$s can pay for our wishes!
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What controllable input activities can we do immediately to start to move GP$s/FTEE higher by working smarter, not harder?
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Order size assumptions: No one can do two customer-related activities at the same time, such as sales calls, order-taking, quotes, picks, deliveries, invoice-paper-matching, etc.
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If for each activity the average GP$s involved was magically higher, then GP$/FTEE would rise.
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How, then, do we win more large-GP$ orders while consolidating small-GP$ orders?
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Let’s invent some new analytics. Why not rank all customers by their average GP$s/invoice along with their total invoices? And, on the side, let’s divide total orders for the year into operating expenses to find out what our average cost per invoice is.
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What do we discover? What next level of questions and new invented analytics will arise? At some point, what might be our first, easiest experiment to try?
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Scary? Is fine-tuning the status-quo, instead, a viable option?
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Help? Have other distributors ever gone down this path that we could learn from?
The answer to No. 10 is YES!
Please feel free to request a copy of my Core Renewal Roadmap by emailing me at bruce@merrifield.com.
