Pride = profits

Pride Marine Group of Bracebridge, Ontario, Canada, hosts company-wide meetings on an annual basis. And management uses the time to focus its team on the most pertinent issues and to create a call to action.

The theme of this year’s meeting was “212 Degrees,” the title of a book written by S.L. Parker. The book, which proffers the importance of that one extra degree that takes water from merely being hot to boiling, has been adopted by many marine dealers as an inspirational message for their staffs to understand how making the extra degree of effort in the business can make all the difference.

But Pride took the concept much further.

Company management knew that the appreciating Canadian dollar could wreak havoc on the expense structure of the company. A boat that cost $30,000 the year prior, for example, and retailed at a 25-percent gross margin for $40,000 would cost $24,000 in 2008 and retail, at the same gross margin percentage, for $32,000. The company’s expenses — manpower, overhead and all other costs — remain exactly the same on both boats, however, and the difference in the value of the dollar leaves the dealer with $2,000 less available income with the 2008 boat.

So the company proactively created a cross-company committee to examine where it could save 20 percent of its expenses — without sacrificing customer experiences.

“This is where the ‘212 Degrees’ rally cry began,” explains Paul Nickel, president. “Operating at ‘212 Degrees’ meant that not only were you maximizing your own efficiency, but you were also making an effort to help others streamline their efficiency through your actions.”

The company meeting began with the definition of available income — a term and focus taught by its 20 Group moderator, Spader Business Management — and an explanation of the difference between it and revenue. It evolved into how the company can align itself, its goals, its budgets and its crew members with driving available income or gross profit. Each department made a presentation, and the team was challenged to come up with 212 ideas to implement to help improve available income.

“All of these things are easier said than done,” Nickel says. “But we are always reminded that the most profitable years of many corporations are as they exit a difficult economic cycle. Without being in a positive mind frame, you will miss that opportunity.”

Here are some of the resulting ideas
generated by the 212 Degrees Challenge:

  • The yard staff at one location agreed to pack and deliver the daily garbage to the dump rather than paying $12,000 a year in waste bin rental and tipping fees.
  • The company began offering menu-pricing for its health benefits, and now employees have a customizable health care plan which includes items that are important to their family, and it reduces costs for the company by not doubling up on benefits that employee spouses may have.
  • Delivery truck drivers now check with sales managers when moving boats from one location in an effort to fill an “open” trailer going the other direction. This has saved time, resources, fuel and more.

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