This framework is developed by a team of former McKinsey and Big 4 consultants. The presentation follows the headline-body-bumper slide format used by global consulting firms.
Explore the Rapid Earnings Expansion framework by ex-McKinsey consultants. This PPT guides P&L improvement through a four-phase methodology for swift financial turnaround. Rapid Earnings Expansion is a 18-slide PPT PowerPoint presentation slide deck (PPT) available for immediate download upon purchase.
Organizations engage in profit and loss (P&L) improvement gradually and continuously—typically aiming for incremental gains instead of major Transformation. On the contrary, activist investors push a troubled company to undergo radical Restructuring. This may cause major P&L Improvement, but the drastic cuts—neither well planned nor internally well accepted—can have negative impacts on the organization.
Organizations are at risk to activists' intrusion when shareholders' expectations for P&L performance is much higher than management's projections. If the P&L gap reaches around 20 to 30%, the company is at risk of being asked by shareholder activists to undergo radical restructuring.
The widened P&L gap warrants decisive action where the senior leadership can utilize the Rapid Earnings Expansion approach to eliminate its vulnerability in the hands of activist investors.
The Rapid Earnings Expansion approach can be instrumental in bridging the P&L gap. This slide deck takes a comprehensive look at the Rapid Earnings Expansion approach, its key phases, and its effectiveness in aiding to promptly close the P&L gap.
The slide deck also includes some slide templates for you to use in your own business presentations.
The Rapid Earnings Expansion approach is structured around a four-phase methodology: RESET Target, Strategy Development, Implementation, and Forecast Projection. Each phase is meticulously designed to ensure that the P&L gap is closed swiftly and effectively. The RESET phase involves setting ambitious yet achievable targets, often aiming to double EBIT within a one to two-year timeframe. Strategy Development focuses on assigning specific performance targets to solution teams, ensuring no P&L driver is overlooked. Implementation requires a pragmatic integration of multiple initiatives, while Forecast Projection keeps a close eye on capital spending, eliminating any financial ambiguities.
This slide deck also contrasts Rapid Earnings Expansion with traditional profitability improvement methods, highlighting its proactive and robust nature. Unlike conventional approaches that respond to external pressures, Rapid Earnings Expansion is self-initiated and driven by strategic imperatives. It encompasses the entire enterprise, ensuring concurrent, interdependent efforts. The included templates provide a practical framework for applying these concepts, making this PPT an invaluable resource for senior executives aiming to safeguard their organization against activist investors and achieve rapid financial turnaround.
Establishing a Profit and Loss (P&L) improvement target is essential within the Rapid Earnings Expansion framework. Senior leadership must recognize the need for this target to align current performance with investor expectations. A declining P&L trend necessitates a "reset" of targets to meet market demands. The process begins with a top-down analysis where executive leadership defines and quantifies improvements over 4-6 weeks, involving insights from internal and external stakeholders, including board and banker interviews. Leadership must address critical questions regarding the accuracy of the RESET target, resource availability, and competing priorities. The P&L aspirational target is attainable through a structured approach, providing clarity and actionable insights to navigate financial challenges.
This PPT slide outlines a structured approach to setting ambitious RESET targets for enhancing profitability and operational efficiency. It categorizes solutions impacting financial areas: top line, SG&A, raw materials, logistics, conversion, and balance sheet.
"Pricing and portfolio" focuses on optimizing offerings and pricing strategies for revenue management. "Zero-based budgeting" promotes a lean organizational structure for cost management and savings. "Strategic sourcing" aims to reduce external costs while maximizing supplier value for better procurement practices. The "Lean asset strategy" emphasizes optimizing asset returns by evaluating asset portfolios.
"Working capital productivity" enhances cash flow through effective inventory and accounts receivable/payable management, crucial for liquidity. "CapEx excellence" stresses improved capital expenditure strategies aligned with financial goals. Checkmarks in the P&L cost areas visually represent the impact of each solution on financial metrics, guiding leadership discussions toward decisive actions for earnings improvement.
This PPT slide outlines a structured approach to Rapid Earnings Expansion, emphasizing the need to address the profit and loss gap. The four-phase methodology includes:
1. RESET Target: Redefining financial objectives through analysis of current profit levels versus anticipated performance to set realistic targets.
2. Strategy Development: Crafting a detailed plan that leverages existing capabilities and resources, ensuring strategies are ambitious yet grounded in operational realities.
3. Implementation: Executing the developed strategies, translating plans into actionable steps for tangible results.
4. Forecast Projection: Assessing expected outcomes of implemented strategies to measure success and make necessary adjustments.
This approach can mitigate management's exposure to activist investors by demonstrating proactive financial stewardship.
This PPT slide compares 2 approaches to profitability improvement: Traditional Profitability Improvement methods and the Rapid Earnings Expansion approach. Traditional methods are reactive, relying on isolated functional benchmarks, while Rapid Earnings Expansion is proactive and strategically driven. The scope of traditional methods involves fragmented efficiency programs, whereas Rapid Earnings Expansion encompasses the entire enterprise with a single source of truth. Timing differs significantly; traditional methods operate on standalone projects without defined endpoints, while Rapid Earnings Expansion emphasizes concurrent efforts within an 18-24 month timeline. Guiding principles also vary, with traditional methods focusing on functional improvement and Rapid Earnings Expansion optimizing both costs and revenues. Finally, traditional methods rely on project-based savings, while Rapid Earnings Expansion fosters a results-oriented mindset with a no-excuses reporting culture.
Source: Best Practices in Performance Management, Business Transformation, Growth Strategy PowerPoint Slides: Rapid Earnings Expansion PowerPoint (PPT) Presentation Slide Deck, LearnPPT Consulting
This framework is developed by a team of former McKinsey and Big 4 consultants. The presentation follows the headline-body-bumper slide format used by global consulting firms.
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