1. The
8 Steps
to
Breakthrough
Business
Growth
Step
1.
Know
The
Game
You’re
Playing
Neil
Gillespie
Shamrock
Growth
Associates

2. The
8
Steps
1. Know
the
Game
You’re
Playing
2. Discover
Your
Core
3. Target
Additions
to
The
Core
4. Commit
to
Paying
The
Price
5. Develop
The
Core
Team
and
Culture
6. Optimize
Core
Productivity
7. Drive
Your
Business
with
3D
Marketing
8. Redefine
the
Core,
Return
to
Step
1
Copyright
©
2010
Neil
Gillespie
2

3. The
Game
of
Growth
• This
is
not
primarily
about
your
vertical
industry
niche
• This
is
about
how
to
grow
and
grow
profitably
• There
will
be
some
specifics
for
your
vertical
niche,
though
as
examples
• The
principles of
growth
are
the
same
across
businesses
• Growth
involves
the
humility
and
intellectual
curiosity
to
make
the
unknown
known
Copyright
©
2010
Neil
Gillespie
3

4. The
Fundamentals
of
Growth
1. Choose
Destinations
wisely,
align
and
tune
up
your
car
before
traveling
2. “WHAT”
is
Strategy.
That’s
Not
A
Question
3. Listen,
Decide
and
Act
to
Grow
4. How
Organizations
Work
5. The
Profit
Triad
6. Growth
is
a
Natural
8
Step
Progression
Copyright
©
2010
Neil
Gillespie
4

5. 1.
Choose
Destinations
Wisely…
a. Be
passionate
about
your
choice
of
core
markets
b. Make
sure
you
can
be
a
leader
in
your
market
c. Make
sure
you
know
how
to
be
efficient
to
make
money
d. Alignment
=
Everybody
working
toward
the
same
objectives
e. Out
of
alignment
– The
driver
and
wheels
are
aimed in
different
directions
– Results
in
high
friction
and
a
rough
ride
f. In
tune
– Responds
to
appropriate
stimulus
– Respond
at
the
appropriate
time
and
frequency
– in
“harmony”
– Performs
at
peak
efficiency:
the
ratio
of
output
to
input
Copyright
©
2010
Neil
Gillespie
5
Align
and
Tune
Up
The
Car
Before
Traveling

6. Getting
Ready
for
The
Trip
1. Find
Your
True
Core
Business
– Next
Module
– Discover
Your
Core
2. Maximize
core
position,
but
also
examine
where
your
core
position
allows
you
to
go
3. Get
all
the
wheels
(people)
aligned
in
the
same
direction
4. Make
Yourself
as
Productive
as
Possible
– Spend
less
to
produce
output,
make
more
profit
– Make
your
business
scalable
Copyright
©
2010
Neil
Gillespie
6

7. 2:
WHAT
is
Strategy
a. Strategy
is
a
self-­‐defeating word
b. Why?
It
focuses
you
two
steps
back
in
the
strategic
thinking
process
– the
“how”
c. Step
1
in
Strategy
is
the
“WHAT”
– the
outcome
or
results
you
will
deliver
for
the
customer
based
on
their
issues
and
opportunities
d. Your
products
and
services
are
the
“HOW”
e. Focus
on
The
“WHAT”
and
you
will
get
more
ideas
to
serve
customers
that
will
expand
your
business
Copyright
©
2010
Neil
Gillespie
7
That’s
Not
A
Question

8. 3:
Listen,
Decide
and
Act
to
Grow
a. Every
living
thing,
functional
system
and
organization
started
this
way
b. They
listen
to
and
understand
information,
decide
what
to
do
and
act
on
the
decision
c. Organizations
get
into
trouble
when
they
stop
listening
d. First
responsibility
of
marketing
is
listening
e. The
CEO
should
be
the
top
Marketing
Person
f. Unless
you
are
among
the
most
highly
evolved
organizations,
the
CEO
must
set
the
tone
g. Other
organization
functions
should
take
direction
from
marketing
Copyright
©
2010
Neil
Gillespie
8

9. 4.
How
Organizations
Work
Copyright
©
2010
Neil
Gillespie
9
2. Marketing
4. Operations
9. Finance
3. Suppliers8. Sales
1. Customer
5. Process Quality
6. Technology
7. Human Resources
The Basic Service Organization
Listen
Decide, Commit
Act

10. Manufacturing
MarketingFinance
Sales & Sales
Promotion
Sourcing
Engineering
Production PlanningWarehousing &
Logistics
Order Service
Strategic PlanningAfter Sale Service
Customer
•Processes
•HR
•Technologies
•Facilities
•Financing
Manufacturing
Organization
10Copyright
©
2010
Neil
Gillespie
Delivering ß à Planning
Thought&EnergyPhysicalForm

11. 5.
The
Profit
Triad
Business
Density
Per
Square
Mile
Gross
Profit
$$
Per
Order
Leadership
Productivity
Lower
Unit
Costs,
Boost
Asset
Production,
Send
More
GP$
to
Bottom
Line
The
Natural
Productivity
Advantage
11Copyright
©
2010
Neil
Gillespie

12. 5:
The
Profit
Triad
a. Works
assuming
you
made
the
right
choice of
markets where
you
can
have
a
competitive
advantage
b. Integrates
all
functions
of
the
organization
to
accomplish
the
three
most
important
profit
drivers
c. The
three
drivers
are:
a. Revenue
Density
on
your
core
investment
b. Leadership
Productivity in
delivering
value
c. High
Gross
Profit
Dollars
per
Order,
achievable
through
broader
product
mix per
customer
and
on
every
order
Copyright
©
2010
Neil
Gillespie
12

13. The Profit Triad
Leadership
Productivity
Front Room
Back Room
Asset Productivity
• Inventory T.O. & Days
• Receivables DSO
• Payables DSO
• Net Cash Flow Days
• TotalAsset TO
• Purchasing
• WHSE
• Receiving &
Putaway
• Picking
• Delivery
• Returns
• Accounting
• A/P
• A/R
• IS Sales
• Counter
• Outside Sales
• Web Orders
• EDI Order
Cost
per
Unit
of
Output
(i.e.
Line
Item)
Cost
per
Order
Type,
Units
of
Output
Per
Person
Velocity
of
moving
from
Cash
to
Asset
to
Cash
GP$ Per
Order
Product Mix per Customer
Pricing & Costing
• Avg Line Items & GP$/Order
• Counter personnel
• Inside personnel
• Web Orders, EDI Order
• Customer, Segment
• Conversion Successes by Outside
Salesperson/Line/Customer
• More high ticket item sales (project
equipment, automation)
• More direct ship smallproject
orders
• Product Data
Completeness/Accuracy: %
Units with errors in price,
UOM, base cost
• % Manufacturers with Special
Nets that provide loadable or
automapped files
• Pricing Matrix: GMROI & Pct
overrides by Product Line &
SKU
• SPA/Rebate Administration
•% Mfgrs On Loadable
Price Notifications
•% On Automated Claims
•% Orders caught with
SPA Errors/Omissions
•% Claims Collected
•Avg days to collect
•$ Uncollected by Mfgr
Business Density
• Customer Perception of Relative Value by Segment
• Sales, Market and Share Trends
• Growth Diversity: % Revenue and Margin by Growth Category
• Relative Market Share to Next Closest Competitor by Segment
• Customer Service Performance: Line item fill rate, orderfill rate, No. shipments
to complete an order, on time delivery
• Revenue Per Square Mile
• Accounts per Square Mile
Density Drivers
13
Copyright
©
2010
Neil
Gillespie
All
Rights
Reserved
Final Results
• Sales
• GP$
• GP%
• Operating Costs
• Cost per line
item delivered
• Net Profit
• Asset Turns
• Cash Generation
• ROTA
• ROE
Current,
Benchmark
comparisons
&
trends
GP$
Production
to
Expense

14. Density
• Offer
leading
value
for
your
chosen
market
• Value
is
product
lineup
plus
market-­‐leading
service
performance
– Line
item
fill
rate
– Order
fill
rate
– On
time
delivery
– Other:
return
service,
other
value
added
services
• Creates
customer
preference
for
your
products
and
services
• Resulting
in
higher
sales
• Rising
Market
Share
• But
most
important
for
competitive
advantage,
high
relative
market
share
Copyright
©
2010
Neil
Gillespie
14

15. Density
and
Relative
Market
Share
• Relative
market
share
is
your
share
in
ratio
to
the
next
closest
competitor
• Drives
density
of
accounts
and
revenue
per
square
mile
• Gives
you
a
natural
productivity
and
cost
advantage
vs
competitors
Copyright
©
2010
Neil
Gillespie
15

16. Leadership
Productivity
• Takes
advantage
of
scale
created
by
higher
market
share
• Focuses
on
making
your
operations
more
efficient
and
scalable
• Efficiency
is
the
ratio
of
output
to
input in
managing
three
key
areas:
– Front
Room
– Back
Room
– Assets
Copyright
©
2010
Neil
Gillespie
16

17. Scalability
Copyright
©
2010
Neil
Gillespie
17
VC
TC
Revenue
Profit
Before
Break
Even
FC
VC
After
Profit
After$$
Business
Unit
Volume

18. Front
Room
Copyright
©
2010
Neil
Gillespie
18
• Outside
sales
people
produce
Gross
Profit
Dollars
• Compare
this
in
ratio
to
Cost
of
producing
Sales
• Cost
=
Commissions,
T&E,
Car,
Insurance
Benefits,
Computers,
Training
Expense
• =
Gross
Profit
Dollars
to
Sales
Expense
• Examine
for
the
whole
business,
each
sales
force,
each
salesperson
• Counter
and
inside
personnel
primarily
produce
line
items
per
person
per
period
– But
may
also
have
discretion
to
change
pricing
so
measure
Gross
profit
quality
as
well
as
quantity
Front Room
•IS Sales
•Counter
•Outside Sales
•Web Orders
•EDI Orders
Sales $4,000,000
Gross
Profit $1,000,000
Sales
Expense
$
200,000
GP$/Sales
Expense
=
5.0X
More
in
Module
Six

19. Back
Room
Copyright
©
2010
Neil
Gillespie
19
• Productivity
– People
=
Units
produced
per
person
per
period
– Cost
=
Department
Costs
/
Units
of
Output
Produced
• Can
be
done
in
any
department
to
the
right
• Total
Cost
=
Cost
per
line
item
delivered
• Examine
these
and
benchmark
if
possible
Back Room
• Purchasing
• WHSE
• Receiving
• Picking
• Delivery
• Accounting
• A/P
• A/R
More
in
Module
Six

20. Assets
• Cash
goes
in,
so
cash
must
come
out
as
fast
as
possible
• Speeding
up
velocity
of
cash
in
and
out
and
monitoring
slow
items
so
you
can
never
get
cash
out
is
the
key
• Total
Measure
of
cash
investment
=
Net
Cash
Flow
Days (NCFD)
• Component
investments
=
Inventory
Days
+
Receivables
Days
less
Payables
Days
• Measure
NCFD
for
each
supplier
• Measure
GMROI
for
each
supplier
– Gross
Profit
Dollars/
Inventory
Investment
• Stratify
performance
to
take
action
with
process,
policy
and
remedial
actions
– ABCD
inventory
analysis
– 30-­‐60-­‐90+
receivables
Copyright
©
2010
Neil
Gillespie
20
Asset
Productivity
• Inventory T.O. & Days
• Receivables DSO
• Payables DSO
• Net Cash Flow Days
• Total Asset TO
• Cash Generation
More
in
Module
Six

21. Gross
Profit
Per
Order
• Biggest
Driver
of
Customer
Profitability
• Increase
it
by
selling
a
broader
mix
of
products
• Sell
a
broader
mix
through
– Converting
accounts
to
your
brands vs
competitor’s
– Offering
value-­‐added
solutions
like
Storeroom
Management
to
bundle
products
together
– Tie
in
selling
on
every
order at
counter
and
inside
sales
positions
– Training
your
people
to
do
this
– Enlisting
supplier support
for
joint
sales
and
marketing
initiatives
– Analyzing
which
accounts
are
frequent
buyers
that
cherry-­‐pick only
certain
lines
– Direct
marketing
of
related
products
to
customers
based
on
purchase analyses
Copyright
©
2010
Neil
Gillespie
21
• Get
Gross
Profit
Per
Order
Up
substantially
• Activity
Based
Costs
Per
Order
Down
Substantially
• Profit
Per
Order
Goes
Way
Up
If
You….
On
top
of
your
density
advantage,
profitability
can
increase
3X
or
4X!
More
in
Modules
6
&
7

22. 6.
Growth
is
Natural
8
Step
Progression
Copyright
©
2010
Neil
Gillespie
22
a. Musicians
first
learn
the
fundamental notes
and
scales
• Doesn’t
guarantee
ability
to
compose…
• …Must
learn
principles
of
melody
and
harmony
b. Businesseslearn
fundamentals
of
different
business
functions
• Doesn’t
guarantee
ability
to
create
integrated
plans…
• …Must
learn
how
functions
work
individually
(Melody)
and
together
to
produce
a
desired
result (Harmony)
c. The
8
Steps
unfold
in
a
Natural
Progression
a. Just
like
a
musical
“octave”
(8
notes
in
a
scale)
b. When
you
hear
the
current
“note”
in
a
scale
you
automatically
“hear”
the
next
c. When
you
have
reached
a
certain
step
in
growth
planning,
you
will
automatically
sense
the
next

23. Growth
Initiatives
“Pull”
You
in
a
Cycle
• You
identify
what
you
know
and
what
you
don’t’
know
about
where
you
want
to
go
• You
go
after
what
you
don’t
know
and
make
it
known
• You
act
on
what
you
learn…
you
take
the
calculated
risk
• You
step
back
and
redefine
what
you
are
and
your
new
opportunities
• You
prune
what
went
in
the
wrong
direction
Copyright
©
2010
Neil
Gillespie
23

24. Growth
Secrets
Revealed
• Trees
are
the
most
prolific
growers
on
the
planet
besides
besides
bacteria
• They
concentrate
energy
in
two
areas
1. Meristem
bud
cluster
cells
at
tips
of
branches
– reaching
for
the
“new”
2. Resource
distribution
cells
in
the
trunk
that
send
nutrients
to
the
areas
tips
(efficiency
&
velocity)
• They
absorb
solid
and
liquid
nutrients
(knowledge
and
inspiration)
from
their
roots
Copyright
©
2010
Neil
Gillespie
24

25. Want
To
Grow?
Make
Like
A
Tree
Copyright
©
2010
Neil
Gillespie
25

26. Requirements
for
Growth…
• Identify
your
best
growth
opportunities
using
an
expanded
view
of
possibilities
• Develop
an
efficient
resource
distribution
system
to
fuel
growth
(Operations
that
produce
CASH)
• Develop
a
culture
that
loves
learning
and
doing
new
things
• Put
a
plan
together
to
pursue
multiple
growth
initiatives
simultaneously
• Market
your
business
more
sharply
than
any
competitor
(much
sharper
J)
Copyright
©
2010
Neil
Gillespie
26

27. Next
Up
1. Know
the
Game
You’re
Playing
2. Discover
Your
Core
3. Target
Additions
to
The
Core
4. Commit
to
Paying
The
Price
5. Develop
The
Core
Team
and
Culture
6. Optimize
Core
Productivity
7. Drive
Your
Business
with
3D
Marketing
8. Redefine
the
Core,
Return
to
Step
1
Copyright
©
2010
Neil
Gillespie
27

28. Get
The
Book
Copyright
©
2010
Neil
Gillespie
28
Available soon on
Growthwizards.com
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Barnes & Noble.com