Step 1 sets a goal. That gives you the what you will do. This, in turn, points to the needed strategy: how that goal will be reached. When turnaround is imperative, simplification is the strategy. Company-wide, this means using the 80/20 Principle to identify what is working and what is not working, so that management can move resources from what is not working to what is.

Step 2 is to Create the strategy, which will position the company to earn the right to grow. A 100-day turnaround timeline goes by fast, so speed of the essence. The sooner the course correction is implemented, the sooner the cashflow bleeding will stop. Don’t expect the draft of the strategy produced in the span of Step 2 to guide the company for all time. You just need it to propel the business to Step 3, in which the executive and operational leadership puts some meat on the strategic bones and gives the business a new structure going forward, one that will enable, facilitate, and accelerate optimum focus on customer base and product offering to drive profitable growth.

Step 2 does not promise perfection, just progress. The strategy that emerges from Step 2 is intended to be modified going forward in response to the changing demands of reality. Like Steps 1 and 3, Step 2 is a step toward lifting the organization to Step 4: an action plan.

Step 2 in the PGOS unfolds in a series of meetings among members of the management team, who analyze the most recent data together with that gathered over the prior year, and rapidly design a strategic framework—more like a scaffold—on which to make the decisions that guide the business plan built in Step 3. Step 2 lays out the objectives that must be achieved to reach the company’s long-term (three- to five-year) goal. Once the objectives are articulated, the entire organization must align on them.  The articulation of the strategy must answer five big questions:

1. What is needed to achieve breakthrough growth and/or performance?
2. What are the differentiators required to win?
3. What are the strategic opportunities or issues? Consider, for example, new product development, line extension, acquisitions, and so on.
4. What are the highest-value opportunities? Consider, for example, the potential of new product lines and their affordability.
5. With questions 1 through 4 answered, ask and answer: What are the critical few initiatives to prioritize?

Step 2 applies 80/20 analysis that will be used to draft a business plan strategically aligned on a “critical few” priorities. Once this alignment is established, the next step is to frame its cross-functional execution to achieve profitable organic growth. These coordinated workflows are best plotted and presented graphically. Here is a chart I used in my company, OTC, to lay out an 80/20 PGOS strategic workflow:

Notice how Step 2 uses two processes, strategic alignment and cross-functional execution, to enable the company to invest in its profitable growth. Strategic alignment begins with data collection, which is segmented into an 80/20 quad, surfacing the “critical few” customers and products on which the company will laser-focus its resources. Through 80/20 simplification, operating costs will be lowered. Through 80/20 focused sales growth, market share and price leverage will be gained, giving the business the competitive edge required to take market share from competing companies. This will earn the company the right to grow organically—that is, using the resources it currently has. From this point, profitable growth can be increased through a combination of geographic and product expansion.

Like strategic alignment, cross-functional execution is driven by the 80/20 Principle. The task is to devise ways to optimally allocate ~80 percent of your resources to Quad 1. Begin by shifting human resources from Quad 4 to Quad 1. Beyond this, you have a range of specific 80/20 levers to consider pulling:

1. Formulate the terms and service level agreement (SLA) for each of the four quadrants, such that you always serve Quad 1 most intensively.
2. Align all value streams to Quad 1.
3. Apply Lean and other efficiency and continuous improvement (CI) standards to all operations and processes.
4. Simplify your stable of vendors, consolidating them and reducing their number, so that you can secure volume pricing.
5. Improve inventory management with such practices as just-in-time (JIT) and the like.
6.  Leverage your spend with strategic discipline.

The 80/20 principle applied to strategic alignment and cross-functional execution allows you to focus only on those product/customer segments that have the clearest path to success. While it is good to win anytime, in the 100 days process it is always best to win early. This builds both momentum and confidence.