Benefiting customers while improving financial and implementation performance

Mid-size public products and services company

Challenge:  How does the $500 million division of a publicly traded company with declining profitability in its core product line take costs out of the product while enhancing the customer value proposition and repositioning to capture more share?

A product simplification strategy designed to reduce costs and improve operating income had been developed and implemented, but results were not meeting expectations.  Company leadership saw the current plans as too tactical and implementation too slow, causing the need to rethink the design of the entire plan.

Methodology:

Aveus partnered with the division president and leadership team to evaluate the current state of implementation, identify gaps, and reset the simplification strategy. We used strategic assumption testing, a disciplined process designed to reveal the assumptions that underlie a plan or strategy – and that impact every critical implementation decision.

Through this work:

• The basic logic underpinning the product simplification strategy was vetted – and modified based on the findings. 
• Assumptions on which the strategy and implementation plan had been built were challenged and changed.
• The simplification design was modified to incorporate significant benefits for customers and the company. 
• A new implementation plan was created, free of unimportant internal operating assumptions. 
• The analysis drove a reset of the initiative with business performance requirements to guide all implementation efforts, tying specific decisions and actions directly to financial benefits.

Benefits realized:

A project that had originated from an internal need to drive profit improvement was reshaped in ways that:

• Create a dramatic opportunity for customers to benefit financially and from better product performance.
• Allow the company to drive financial and operating performance improvements AND expand market share.
• Empower the implementation team to shed non-essential design elements.