GGOB Basics // Critical Number Heather Reinkemeyer Darin Bridges - PowerPoint PPT Presentation

GGOB Basics // Critical Number Heather Reinkemeyer Darin Bridges Crew & Community Relations Manager Vice President GGOB Internal Coach The Great Game of Business Vital Farms Springfield, MO Springfield, MO

Agenda • Introductions • Define • Benefits • Choosing • New Practitioner Story • Old Practitioner Story • Rolling it Out • New Practitioner Story • Old Practitioner Story • Other Examples • Call to Action • Questions

Introductions Darin Bridges Heather Reinkemeyer • Pre-Med • Kansas • Mfg./Dist. • Optometry • GGOB Fail • GGOB • SRC • Vital Farms • GGOB for Real • Internal Coach

Critical Number Definition

The Critical Number™ An operational or financial number that represents a weakness or vu vuln lnerabilit ity that, if not addressed and corrected, will neg egatively im impact the overall performance and long-term security of the business.

The Critical Number™ If you don’t address & measure, bad stuff can happen.

The Critical Number™ If you do address & measure, good things should happen.

The Critical Number™ A Rallying Point!

The Critical Number™ • It’s ‘The One Thing’ … that at any given time, is going to have the greatest impact on your business • It’s ‘The One Thing’ … you must achieve or nothing else you achieve really matters much • It’s ‘The One Thing’ … that clearly defines winning!

Critical Number Benefits

The Benefits • Provides a ‘Focus’ around what’s most important & critical to success • Rallies everyone around a ‘Common Goal’ • ‘Educates’ the team

Creates Line of Sight

Vital Farms Supply Chain Operations Talent Grower Support Sales & Marketing Finance, Accounting, & IT

Vital Farms 1 st shift 2 nd shift SUPPLY CHAIN 3 rd shift Recruiting TALENT Shipping HR Maintenance OPERATIONS Crew Experience Food Service MARKETING GROWER SUPPORT Content COMPLIANCE SALES Brand Ambassadors Innovation FINANCE IT ACCOUNTING

The Benefits • Clydesdale effect • All pulling ‘Together’ the same direction • Exponentially greater power than alone

Choosing a Number “New Practitioner Story”

Choosing a Number • The Appraisal Pro rocess • Employee Perspectives • Management Perspectives • Financial Analysis • Industry Comparisons • The High-Involvement Pla lanning Pro rocess 1. Sales & Marketing (Market, Competition, Strategy) 2. Prepare Projected Financials 3. Analyze Projected Results 4. Identify Critical Number 5. Design Incentive Plan

Choosing a Number People le support what they help lp create! Mag agic Number? The real magic isn’t in the number, it’s in the process of getting to the number.

Choosing a Number “Where do you start?” By confronting the brutal facts… A searing scientific debate - With smart, tough-minded people ex examin inin ing hard fa facts and de debating what th those fa facts mean . The point isn’t to win the debate, but rather to to co come up up wit ith th the bes best an answers .” – Jim Collins

Vital Farms Number Going to back to your “why” • Educate your crew • Actions, attitudes, and behaviors moved the needle • Build a financial foundation . . . Cost per Dozen $$

Choosing a Number “Old Practitioner Story”

SRC Heavy Duty Number

SRC Heavy Duty Number • End d of f 2017 • Have gro rown fro from $25M to to $85M • 240% in in 7 Years • Fue ueled by by Passion • Ja Jack ste teps in in as as our ur VP

SRC Heavy Duty Number

SRC Heavy Duty Number • Two Large Contracts • Projecting $90M fo for 2018 • Well ll on our way to to $100M Goal • But ut we e were not Suc uccessful • Bec ecause, we e were not t Profitable

SRC Heavy Duty Number

SRC Heavy Duty Number • The Appraisal Pro rocess ✓ Employee Perspectives “What can we do to make $?” ✓ Management Perspectives ✓ Financial Analysis (Previous Sli (Pr Slide) ✓ Industry Comparisons (PBT = (PB = 5% 5% - 10 10%) • The High-Involvement Pla lanning Pro rocess ✓ Sales & Marketing Confi Co nfidence in n the the mark rket, , ✓ Prepare Projected Financials stra strategy, sale sales plan plan, ope pera rations & our ur cap capabilities ✓ Analyze Projected Results • Identify Critical Number • Design Incentive Plan

SRC Heavy Duty Number • Set et a a pla lan to to make $3.5 .5M in in Profit • Set et a a goal to to make $5.5 .5M in in Profit • In Ince centive ba based on an anything ove ver $3.5 .5M • How to to get et th there? • Note: : W We wer ere tra trackin ing 3% Net et Pro rofit it by by YE2017

SRC Heavy Duty Number • Se Set a pla lan to to make $3.5 .5M in in Pro rofit • Se Set a go goal to to make $5.5M in in Pro rofit (We had an aggressive team) • How to to ge get t th there? Redo Re o Sales Sales Pla Plan? Inc ncre rease Ne Net t Pr Profit Marg rgin? or or $125M 125M @ 4% 4% Net Net Pr Profit Marg rgin $90 90M @ 6% 6% Ne Net t Pro Profit Marg rgin

Rolling it Out “New Practitioner Story”

Rolling The Critical Number Out 1. Leverage your design team 2. Explain the why and then the how 3. Connect the dotted lines by starting on their side of the table

Vital Farms Number Cost per Dozen $$ → On Time In Full (OTIF) →

Rolling it Out “Old Practitioner Story”

SRC Heavy Duty Number 6% PBT (N (Net Profit Mar argin) “People tend to support what they help create”

SRC Heavy Duty Number

Creates Line of Sight

SRC Heavy Duty Number

SRC Heavy Duty Number

Critical Number Other Examples

Other Number Examples • 2010 – Ear arnin ings • 2011 – Ret eturn on Assets • 2012 – Ear arnin ings & Sale les / / Emplo loyee • 2013 – Ear arnin ings & On-Time Delivery • 2014 – Ear arnin ings & Net Promoter Score

Other Number Examples

Call to Action

Call to Action • New Pra ractit itioner ✓ What’s the link that connects your business to your people? ✓ How will it educate your teams to move the needle? ✓ What’s your why? • Experie ienced Pra ractit itioners ✓ Think outside the box, get creative ✓ Use line of sight to refresh the game ✓ Connect to HIP, what’s your long -term strategy?

Questions?