Cary Mailandt is a principal in the Dallas office of
Montgomery Coscia Greilich (MCG), leading the
firm’s Strategy and Management Consulting practice.
MCG is a full-service professional accounting, tax,
and business consulting firm with 260 employees
and is affiliated with Alliott Group, an international
alliance of accounting, law, and consulting firms.
Prior to MCG, Mailandt was vice president of
strategic planning for Golden Gate Capital-owned
portfolio businesses, as well as a project leader for
The Boston Consulting Group. He has an MBA from
Harvard Business School and bachelor’s degree in
electrical engineering from Georgia Tech. Mailandt
can be reached at firstname.lastname@example.org.
through the financial impact of
the plan. This offers an additional
opportunity for the business to spread
the “fewer but stronger” mantra
that will result from the exercise.
Tracking and Metrics. Going through a
customer rationalization effort requires
meticulous tracking and reporting of
metrics to maximize the probability of
success. To ensure that unit volume
ramps down appropriately, orders by
customer must be tracked daily. To
ensure that the appropriate direct labor
workers are retained, labor efficiency
metrics such as units-per-labor-hour
must be analyzed. To ensure that the
remaining customers are serviced
better than they were before, on-time,
complete, and various quality metrics
must be tracked and managed.
As the “fewer but stronger” message
is circulated in the marketplace, it is
critical that every aspect of the business
is tracked and reported, and that people
are held accountable against these
measurements. Once the appropriate
metrics are decided upon and processes
have been put in place to monitor
and report, employee compensation
must be firmly aligned with them.
Indeed, supplementing the customer
rationalization story with well-defined
and meticulously tracked metrics
can be key to instilling confidence
among lenders and equity holders,
who often find comfort in numbers.
A Powerful Tool
Rationalizing unprofitable customers
can be a very effective mechanism to
improve the economics of a business.
It’s one of the most powerful tools
a turnaround professional has to
positively impact an enterprise in
a relatively short period of time. To
implement such an effort correctly,
At the end of the implementation, a
business will have a smaller top line,
but the bottom line will be stronger.
Additionally, being “fewer but stronger”
will provide a superior foundation
to service the company’s remaining
customers and to gain profitable
market share from competitors as
they scramble to service those least
desirable rationalized customers. J
Locations across the U.S. and around the world.