Comparison of alternative
approaches to profit improvement consulting
Relatively modest one-time
fees. Usually just a few percent of the
Significant initial consulting
fees. Significant ongoing project costs.
Timing of profit impact
Immediate (days to a few months)
Near term (months) to longer term
Cash return on consulting
A few weeks to a couple of months
to cash flow break-even.
A few months to several quarters -
sometimes much longer
Near term cultural impact
Employees experience this as a
positive approach as they are given some
control, influence, and responsibility over
their futures (as determined by corporate
This may be seen as a negative
approach as outsiders dictate what is to
happen. Employees are out of control and usually
in the dark.
Long term cultural impact
Employees know they are part of
the solution. Morale improves.
Employees work in a cost-effective manner.
Employees may worry that they are
part of the problem. Morale may
deteriorate. Employees look out for
Employees learn and practice
cost-effective thinking. Profits improve
even outside of specific improvement projects.
Long term profit impact
New projects and annual goals keep
profits improving. Momentum builds.
Impact from initial projects fades
over time. Nothing to keep up the
Interaction with revenue
The Profit Improvement Process is
as much about revenue growth as it is about cutting
costs and losses.
Essentially all focus on cutting
losses and costs - sometimes without due respect
for the negative impact on revenue.
figure shows how a variety of profit initiatives
interact with the profit equation. The Profit
Improvement Process is the only one that supports
revenue growth while addressing costs and losses.
This next figure shows the relative financial and
non-financial benefits of a variety of profit initiatives.
The ideal approach will result in high non-financial
benefits as well as improved profits.
Non-financial benefits include improved managerial
practices and improved morale.
The key is for you to choose your approach in full
consideration of the following points:
We will be happy to help you evaluate your needs and help
you select the proper approach to meet them.
If you are an internal company expert and/or leader, click
here for more.
If you are an established "external"
business consultant, click
here for more.
*Our fees are variable depending on company
work is guaranteed to pay for itself. They
range from about ten thousand dollars for a small
company with less than a hundred employees where we
would train a dozen on more staff to over one hundred
thousand dollars for a company with a few thousand
employees where we would train hundreds of staff.
In any event, your cash flow return on this investment
is very rapid. Other consulting firms usually
start charging in the hundreds of thousands of dollars
and work toward millions. In one situation, for
example, we quoted $150,000 and the competitive estimate
from a "big international consulting firm" was
$2,000,000 just for the evaluation phase. We
trained 250 staff across the country and generated
$5,000,000 in increased profits during the first six
months. The backlog of potential projects at the
end of six months was in excess of $100,000,000.
We can even start out with a simple approach that is
guaranteed to make you money! A two-day Power
Idea Session with your key staff is guaranteed
to produce at least $50,000 in profit projects.
This session will make
you money while you evaluate your cost reduction and
profit improvement options.
What a deal!