Companies spun-off from parent organizations are often burdened with legacy margin structures. To drastically improve margins, an organization needs to take a holistic and urgent approach to revamping its profit and loss (P&L) structure.A.T. Kearney's approach to this is through a Rapid Earnings Expansion, or RESET. RESET starts with a clear and bold target developed by senior leadership. This target is given to a series of solutions groups (vs functional teams) that are tasked with how best to achieve their portion of the goal. This effort must encompass all drivers of P&L and some solutions may include:Pricing and Portfolio - boost profitability through offering optimization and rapid revenue and pricing managementZero-Based Budgeting - drive leaner organizational costs with zero-based budgeting and best shared servicesStrategic Sourcing - reduce external cost and increase value from suppliers through advanced strategic sourcingLean Asset Strategy - increase return on assets through optimized portfolio of high performing assetsWorking Capital Productivity - free cash from balance sheet through inventory and AP/AR managementCapEx Excellence - optimize fixed asset spend through improved CapEx strategy and spending processesBy defining P&L improvement in terms of solutions (as contrasted with the customary focus on functions and units), Rapid Earnings Expansion pursues major opportunities in the space between the organization’s silos—opportunities often overlooked. Assessments conducted solely within functions typically uncover savings potential in the 3 to 5 percent range. In contrast, by tackling the friction between functions as well as the inefficiencies within them, the solution team approach regularly unlocks improvement opportunities of 20 to 30 percent or more.To read more about A.T. Kearney's RESET approach, please visit our website here.