Composite example · Wholesale distribution · ~$310M revenue · 5 branches
Composite example: a distributor that recovered 4.2 margin points without raising price
Composite example — pricing authority, an SKU-level 80/20 read and one commercial cadence moved gross margin from 21.4% to 25.6% and released $6.4M of working capital.
- Disciplines deployed
- FOUNDATION → SIMPLIFY → LEAD
- Measurement window
- 15 months
- Measures reported
- 4
Condition 07 of eight
Performance has plateaued or regressed
What worked before has stopped producing. Effort rises, margin does not.
All eight conditionsPresent reality
Every branch quoted its own price, discounting was a relationship decision rather than an economic one, and inventory was bought on branch confidence. Growth was real and margin was not.
Constraint
There was no economic truth at the point of decision: the people who set price and bought stock could not see contribution by SKU, customer or branch, so the enterprise optimized volume by default.
Intervention — architecture installed
Contribution model by SKU, customer and branch; pricing decision rights with defined thresholds and escalation; a weekly commercial cadence where price, mix and inventory exceptions are decided with evidence.
FOUNDATION → SIMPLIFY → LEAD → GROW
Mapped to the operating system
What was architected inside each discipline, and the measured consequence. Disciplines held out of scope are shown with the reason — nothing is implied by omission.
1. FOUNDATION
Build
Loaded in this engagement
Present-reality read of the order-to-cash stream with ownership assigned to each hand-off.
Result: Disputed hand-offs stopped arriving at the executive team as escalations.
FOUNDATION →2. SIMPLIFY
Focus
Loaded in this engagement
Product, customer and service complexity read at contribution level; the long tail priced or exited.
Result: Margin recovered without volume loss in the top-quartile accounts.
SIMPLIFY →3. LEAD
Execute
Loaded in this engagement
A weekly commercial cadence with owners, dates and evidence against the margin standard.
Result: Pricing decisions moved from monthly exception to weekly discipline.
LEAD →4. GROW
Scale
Held out of scope
Growth held until margin per line was defensible; adding volume first would have scaled the leak.
Result: The recovered margin funds the growth plan now in motion.
GROW →
ARC™ — the renewal loop around all four
The margin read is repeated quarterly and the standards revised where the numbers move against them.
ARC™ →Measured result — what moved, and by how much
| Measure | Before | After (15 months) | Change |
|---|---|---|---|
| Gross margin | 21.4% | 25.6% | +4.2 pts |
| Working capital tied up in inventory | $23.1M | $16.7M | −$6.4M |
| Quotes discounted below floor | 34% | 6% | −28 pts |
| SKUs carrying negative contribution | 2,180 | 410 | −81% |
Gross margin
+4.2 pts
Before21.4%After25.6%Standardized against Gross margin — Composite example. Trailing twelve months, same cost-of-sales definition.
Working capital tied up in inventory
−28%
Before$23.1MAfter$16.7MStandardized against Working capital tied up — Composite example. Month-end balance, same month both readings.
Quotes discounted below floor
−28 pts
Before34%After6%Standardized against Quotes priced below floor — Composite example. Same floor definition; exceptions count as below floor.
SKUs carrying negative contribution
−81%
Before2180After410Standardized against Items carrying negative contribution — Composite example. Same contribution model and threshold.
Price is now an economic decision made inside a governed cadence rather than a relationship concession.
Transfer — what the client now owns
Branch and commercial leaders own the contribution model, set the discount thresholds and run the weekly commercial review themselves.
Compass leaves architects, not dependency.
Client identities, brands, and locations are withheld under confidentiality. Metrics are client-reported and measured over the window shown; they describe those engagements and are not a projection of results for any other enterprise.
Start with your own present reality
Every engagement above began with an honest read of the architecture already producing the results. Score yours, or schedule a conversation.
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