Tuesday, November 28, 2023
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The ProAction Group’s 9-Box System

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Owners and CEOs are constantly working to improve EBITDA and trim waste at portfolio companies. However, no matter how proactive you’ve been in the past, it’s possible to reach a plateau. When you’ve addressed every clear opportunity to reduce waste, but it’s often difficult to identify next steps. This can leave you feeling frustrated, your efforts diluted as you do shallow dives into different aspects of your business looking for places to streamline.

It’s natural to find the process overwhelming, because correcting it requires a deep dive into your company’s data. When your focus is on the day to day running of operations, you may find yourself thinking, “How will I carve out the time?” Your best intentions end up being derailed by more immediate matters. That’s understandable– and that’s why we developed the 9-Box tool. It’s designed to find the dormant potential in your company, through three key ideas:

Triangulation: We begin by looking at your business from multiple vantage points. We’ll draw knowledge and insight from a variety of stakeholders (from the line workers to the C-Suite). In this way, we can provide you with the practical and raw insights you’ve been seeking even if you’ve been trapped under the hood– and we can identify exactly where your hidden, untapped capital might be. Triangulation gives you a sober direction in which to move.

Segmentation: Customers are not equal or the same.  Products are not equal or the same.  Many companies, in fact, treat customers and products the same.  This leads to companies making good money in some segments and actively giving it back in others.  By segmenting your business we expose the patterns and give you clarity.  Clarity that will help you tailor your approach and retain what you earned.

Experience: Theories and models are great, and they can be dangerous.  Decisions about how we treat customers, plan inventory and set pricing should not be left solely to a model.  Experience ensures that practical choices are made and poor decisions are avoided.  During the analysis stage of the 9-Box process, we’ll bring key players in your organization together, combining their expertise with ours to make the bold leaps that will consistently yield the increase in EBITDA you’ve been looking for.

So many companies are draining their own capital without realizing it.  Perhaps their pricing controls need attention, or maybe they’re maintaining the same level of inventory in every item across the board. The company might be giving equal attention to segments of the market that account for very little of its revenue. Somewhere, your company has capital tied up in resources on which you won’t see a return. We can find and free up those resources.

We’ve worked with more than 30 private equity firms, and 170 of their portfolio companies, to tackle this challenge. Let the 9-Box tool be the offensive line that cuts through everyday distractions, and creates room for you to charge forward and make the bold moves that will drive your EBITDA up and working capital needs down.

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