Boost Revenues 10% and Get Promoted With Amazon's Trick for Faster Client Onboarding

What’s the easiest way to increase revenue in your enterprise?

At first blush, there are only two ways to increase revenue. We can get more clients or we can increase price.

We already know that each of these options comes with problems. Client volumes are notoriously hard to change. If it were easy to attract more customers profitably, you would already have done it. Price, in contrast, is easy to raise but only at the expense of client volume. This is why large enterprises focus so much on cost reduction. We don’t feel as much control over revenue.

Luckily, for large, B2B companies, there is a way to boost revenue as much as 10% without touching price or volume.

The secret relies on a skill most of us mastered by age 5: counting.

How GlobalBank unlocked $140M annually with some basic arithmetic

First, let’s introduce GlobalBank, a fictional name for a real company serving institutional clients globally. On average, the bank earns $302 in daily fees, per client, for use of their asset management platform. With a count of 5,700 new clients each year, GlobalBank could earn upwards of $630M annually, from new revenue alone ($302/day 5,700 clients per year 365 days). That would be a tidy sum.

Unfortunately, GlobalBank leaks roughly $140M in revenue while waiting for clients to go-live. The numbers break down like this:

• Average time to go-live after deal close: 100 days

• One day of revenue from 5,700 new clients: $1.7M

• Annual revenue foregone while waiting 100 days: $170M

If the company could cut onboarding time down 80% to just 20 days, it would be worth $138M in revenue each year!

Now, isn’t it difficult to shorten a process’ onboarding time? Isn’t there some complex, structural reason for the long onboarding time? Won’t it take McKinsey, $2 million dollars, and 6 months of disruption to make a dent in this process?

Noooooooo…

GlobalBank’s fix was both trivial to implement and high-ROI. The previous year, GlobalBank started cost-cutting that led to a chain of events:

• Onboarding Operations cut 20 FTE

• The cut saved $3.9M per year, but…

• Monthly onboardings dropped below incoming clients per month, thus creating a “capacity mismatch”

• A queue started forming, which sent onboarding time from 20 days up to 100 days

Do you see the problem?

To save $3.9M in one area, the team accidentally created a leak worth $140M elsewhere. To reverse the loss would require 8 additional FTE at a cost of $1.46M. How do we know? Because we counted the number of onboardings the team can do each month. From that we can calculate the Completions per FTE which can give us the FTE required to fix the capacity mismatch.

Now, many enterprises are instinctively allergic to an FTE increase. That makes sense if you don’t have hard numbers. You have to make crude estimates on ROI which opens the door for overly optimistic estimates. In that world we follow strict rules-of-thumb to avoid runaway costs. But that’s not our world anymore! Once we start counting, we can make precise ROI calculations based on hard numbers.

In this case, we know that adding 8 FTE will produce a 94x ROI. Adding 8 FTE will allow the team to complete 10% more onboardings each month than come in. The queues will dissipate in 5.7 months and onboarding will settle back at the original time of 20 days. This will create an annual gain of $138M. Given the cost of the FTE, the solution would yield a 94x ROI ($138M revenue gain / $1.46M cost).

Insights in hours, results in weeks

The approach above took only 5 hours to identify the issue, craft the solution, and determine an iron-clad business case. Specifically, the executive made several phone calls to people with numbers on-hand. If someone didn’t know the stats, they connected us to the right person. For speed, we used our Enthoosa agent to crunch numbers and identify the solutions.

Implementing the fix took 2 weeks. At a loss of $1.7M per day, the executive didn’t want to defer implementation. They added temporary workers to increase completion rate until it was above demand. In parallel the exec started the longer process of re-hiring permanent workers.

This approach works for 80% of services that earn “recurring revenue”. Given the simplicity and impact of this solution, you might think our example the exception. Not so. It is relevant to any service that earns ongoing revenue after customer go-live. Of those services, roughly 80% of are losing revenue from trivial counting mistakes. In the vast majority of those cases, the fixes are simple, fast, and high-ROI.

If the executive followed the typical “consulting” approach, they would have lost $69M. The exec could have paid several million for consultants to come in and map the process. The mapping & redesign would take many months and focus more on the steps of the process (the 20 days) as opposed to the time between those steps (the other 80 days). In our experience this effort would not find the root cause. If it did, the consultants would spend several more cycles re-designing the process to fit within the current FTE envelope to “save costs”. Assuming 6 months of effort, the entire process would leak $69M, not including the cost of consultants (181 days * $1.7M per day).

Now, after everything we’ve discussed, you might wonder: why isn’t everyone already doing this?

“Real” executives don’t count… unless they work in a trillion dollar company

The average executive doesn’t count. Every executive we’ve spoken to is unaware of their current counts. They don’t know how many new clients come in each month, nor how many projects they complete. They are unsure of how many invoices are outstanding and have no clue how many days it takes to deliver a new product feature. This isn’t that surprising. In the days of manufacturing, it was a lot easier to find the things to count and perceive the value in doing so. In knowledge organizations, counting is less “in your face.”

However, a pattern emerges when you compare companies that promote counting vs. those that don’t. Top companies expect their executives to count:

1. Amazon explicitly tests executives on counting proficiency during interviews

2. During rapid growth at SpaceX and Tesla, executives who didn’t know end-to-end counts were fired

3. Toyota’s Taiichi Ohno essentially invented “enterprise transformation” and Lean, based on simple counting

If the world’s most prestigious executives take counting so seriously, why don’t we all follow suit?

A lot of arguments sound plausible… until you start counting

When executives first learn about the counting approach, they raise a lot of objections. From a “non-counting perspective” arguments against counting sound plausible. Some arguments even amount to “best practice” among consultants and business advice.

As soon as hard numbers enter the picture, however, common objections start to wilt:

“I need ‘data’ before I can make decisions”

You don’t need to gather spreadsheets of data. Each day you spend ‘gathering’ or ‘cleaning’ data you lose $1.7M. What’s more, that data won’t improve your answer enough to justify the wait. In most processes, you can find any problem and locate the current root cause with 1 sheet of paper and roughly ~40 hand-written numbers.

“I should delegate counting to my directs”

In a lot of companies, executives are not meant to spend their personal time on “operational” tasks like counting. They are supposed to focus on the grand “strategic” issues of the day and leave operational details to their direct reports. One CEO I know, currently running a $60B bank, will actually dismiss operational numbers as “funny math.”

This is all nonsense, of course. It arises from companies who don’t know their counts and never realize how much they lose from inaction. If you knew you were losing $1.7M for each day of inaction and that counting was the most reliable way to fix things, you might shift perspective.

That’s why you shouldn’t delegate counting at first. It is 10x faster when an executive gathers numbers personally. In most cases this requires a quick phone call with 15 subordinates across your org. Each person will grab a number from their email or their own spreadsheet which you will write down. They can send you fuller data later.

Once you get a feel for the approach, then you can let others take over.

“Counting is an inefficient use of my time”

The most sophisticated objection we hear is from executives who believe time spent counting is a bad ROI.

This argument comes in two stages:

First, many execs argue their salary cost will outweigh any gains from counting. That’s one reason we like to introduce the concept with revenue-generating processes like client onboarding. The gains are large and easy to validate. Most executives don’t make $1.7M per day in salary and, if they did, salary is a sunk-cost.

The second argument is about “opportunity costs.” Most executives instinctively believe the “alternative” uses of that time would have a larger ROI than counting. This is rarely the case.

In our earlier example, the executive would have to be generating $90B per year to justify skipping out on the counting exercise:

• Counting yielded $28M per hour ($137M value / 5 hours on phones)

• The average exec works 3,300 hours per year

• The break-even ROI is $90B (3,300 hours per year / $28M per hour)

“Any solution that involves [manual/duplication/meetings] is not real”

Most executives have built intuitions as to what constitutes a good or bad change:

• Manual is bad, automation is good

• Meetings are bad, activity is good

• Informal changes are bad, structural changes are good

• Duplication is bad, one-and-done is good

We once saved an organization $70M/year simply by clarifying informal instructions—yet the CEO questioned the fix because it didn't involve structural process redesign.

In another org the CEO dismissed an improvement worth $330M because it marginally increased duplication of some onboarding activities. The ROI was over 100x but the CEO cared more about the duplication.

Earlier we saw how executives must rely on proxies and pattern recognition in the absence of counts. The additional insight here is that many executives continue to believe in the proxies over the hard numbers counting provides. The key is to remind everyone that performance is what matters. If you can boost profits sustainably with a bunch of meetings and duplicative, manual work, investors will thank you.

To get started, set up a weekly meeting with your process or service

For those who want to get started, there are three things you can do right away:

Starting slow - In every meeting with a process owner, ask for two simple numbers. It doesn’t matter what their processes actually “process”. The approach works with clients, invoices, supplier approvals, Board packs, audit actions, and more. Whenever a process comes up in a meeting, do the following:

• Ask for the current number of “open items” (eg open mortgage applications)

• Ask for the number of items completed last month (this indicates the completion rate)

• Divide open items / completions to get the average months to complete an item

Most people won’t know the numbers, which is already revealing. If they do know the numbers, you’ll often see startlingly high process times. In one company, the exercise above revealed that projects took an average of 2.4 years to deliver. The company spent tens-of-millions developing high-ROI projects without realizing loss from slow delivery.

Moderate pace - Set up a weekly meeting with your own process and start working with counts. Most executives will find themselves in dozens of meetings each week, many of which will have nothing to do with the services that make them money. You can break that cycle by booking 1 hour, each week “with your process.” Invite others as necessary and spend that hour trying to map your counts to the approaches we used in this article.

This will feel awkward and hard. Use the “Starting Slow” approach above in the event you get stuck. You can also reference other newsletters from Enthoosa, as we release them. In general, just reason about your process with common sense. Each incoming request is like water filling up a bucket. Each completion is like water flowing out. Based on the water in the bucket (open items), how long will it take an item to go through your system? Repeat this process on each sub-process down your org.

Immediate unlock - Get a free trial from Enthoosa and have our AI agent start finding revenue leaks. Enthoosa’s AI agent will guide you through the process of gathering and interpreting counts, without the need for outside consultation. If you and the agent both get stuck, a live expert offers support 7 days a week.

Using Enthoosa AI is as easy as visiting a web page. For extra peace of mind, we designed Enthoosa to run entirely in your browser. Whether you’re using Chrome, Edge, or Safari, all your data is persistently stored in the browser, behind your company’s security protections. You’re the only one who can see the data which you can wipe at anytime using your browser settings.

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