Recently, one of my
clients recommended that I compile a series of posts on the most important lessons I’ve learned over my 30-year career as a consultant, working with over 500 different organizations. This is one of those lessons: Most people would rather believe a comfortable lie than accept an uncomfortable truth.
That sounds so harsh, and
perhaps it is. It is, however, an observation that I have made and affirmed over and over again.
Here’s an example. In my work with B2B sales organizations, I have occasionally been involved in an exercise in which we calculate the ‘net profit’ per customer. This is an arduous effort that requires allocation of all the
company’s internal costs to each customer on a fair and equitable basis. So, the cost of the buildings, executives, advertising, etc. are all allocated to each customer and that number subtracted from the gross profit realized from that customer to yield a ‘net profit per customer.’ It’s a great way to evaluate each customer and make decisions about your relationship with each.
In one case, my client was a several hundred-million-dollar supplier of one category of product to a selection of big box stores. The company served hundreds of stores operated by 11 customers.
