Recognizing the value of using profit opportunities to drive growth.
For over thirty years, Publishing Concepts Inc. (PCI) of Dallas has partnered with top-tier colleges and universities, including Harvard, Princeton, Texas A&M and Iowa State to support their alumni membership efforts. Its services include alumni data collection, alumni directory publication, apparel sales and innovative fundraising programs.
When PCI acquired its largest competitor, their size doubled, and the PCI management team recognized the value of having an outside perspective to create additional value from the acquisition. Additionally, the team understood that profit identification could self-fund future growth initiatives making the new business even stronger. Its owner was a Stagen Business Leadership Program alum and knew Mark Hess well and wanted Maven’s specialization in assisting niche companies to guide PCI through the process.
Maven and PCI agreed to begin with the profit identification process. Recognizing that companies often have profit optimization ideas not yet explored, Maven facilitated a brainstorming session with PCI to bring those ideas to the surface. Those along with the Maven’s thoughts were prioritized. Maven then analyzed the top ten ideas to better understand their full potential.
During the six-week profit hunt, the Maven team followed a proven Bain methodology to deep dive into PCI’s business, processes, and cost structure. Maven returned to the team with business cases built for those opportunities that showed the greatest potential for improved profitability. The five highest potential ideas spanned a range of business areas, and included; a redesign of the customer call center experience, improved sales team effectiveness, refined pricing strategy, improved P&L tracking for better management decision-making, and improved marketing efficiency.
Once the profit improvements were identified and handed off for actioning, Maven was then able to begin to uncover the growth opportunities.
Maven often applies a Profit From The Core approach to growth initiatives. Profit From The Core is a business book written by Bain partner Chris Zook which outlines several Bain methodologies for uncovering growth opportunities. This main focus is leveraging existing strengths and core founding principles of the company before looking more broadly. Dismissing core strengths during growth initiatives is common among mid-market businesses. As an outsider, Maven considers all options and brings in experiences from other companies and industries. Similar to the process employed during the profit hunt phase, Maven brainstormed and prioritized the big opportunities and then went away to determine the best growth opportunities. They returned with a business case and roadmap to capitalize on those options.
The top five growth opportunities recommended were to add more SKUs and reduce delivery times for the apparel business, to include personalized alumni stories in the alumni directories in an effort to appeal to the changing audience demographics, improve fundraising efforts, and new activities to increase alumni organization membership. Beyond the ideas and the business case delivery, Maven added value by providing a roadmap and metrics for success, as well as project management and accountability to see the projects through completion.
Publishing Concepts Inc. understood that profit and growth go hand-in-hand with profit improvements funding growth initiatives. It also understood that it required an outsider’s perspective to filter the less rewarding and to highlight those likely to succeed. This two-pronged approach catalyzed the business following a major acquisition as well as set it up for continued organic growth.