QualPro Improves Sales and Custs Costs for Multiple Companies
Key To Turnaround May Be Only A Click Away
With oil prices surging and the market declining,
more and more companies are trying to devise
creative ways to navigate the choppy economic
waters, and one company believes it may have
the answer.
Though the old saying goes “nothing ventured,
nothing gained,” such a gamble could prove
fatal for a company in as tough financial times
as these.
On Wednesday, Oregon real estate developer
Legend Homes Corp. filed for bankruptcy
protection, joining the ranks of numerous busi-
nesses that have fallen prey to the struggling
real estate and credit markets in the past few
months.
Recent filings include California developer Em-
pire Land LLC, Kimball Hill Inc., Levitt & Sons
LLC and Tousa Inc., all of which were forced to
take shelter in Chapter 11 rather than remain
stranded in the current economic wilderness.
But as businesses work to assess their risk and
determine how best to stay afloat, the key to
solving this problem and more may be just a
click away, according to process improvement
company QualPro Inc.
Though the Tennessee-based company has
been in business for nearly 30 years, its
multivariable testing process is garnering more
attention these days than ever before.
“Multivariable testing addresses the risk,” said
David Cochran, the vice president of QualPro.
“It takes the risk out of their actions and does
not betray the company on something they
tried.”
The MVT software allows the company to test
dozens of ideas at once and assess whether it
will help, hurt or make no difference to the busi-
ness, according to QualPro.
Management bonus plans, newspaper insert
timings and radio advertising message are just
a few of the numerous factors that the program
tests, trying to figure out what is a waste of
money and what is worthwhile, the company
said.
“Out of 14,000 ideas, maybe 25% will turn out
to be great ideas,” said Cochran. “It’s not that
people don’t know business. It’s just that the
world is a complicated place.”
After implementing the results of the MVT, com-
panies have seen a noticeable spike in sales,
thanks to the ability to see which ideas work
and which fall flat in a safe space.
“The objective for any company is how to
improve,” said Cochran. “You test hundreds of
ideas and see which ones are easy and fast to
implement. For distressed companies, this is
very attractive.”
Lincoln Paper & Tissue bears witness to this
testimonial, with the former debtor having
become one of MVT’s biggest champions. After
ducking into bankruptcy in 2004, the Maine-
based paper company turned to QualPro in
hopes of determining how to return to profitabil-
ity and has been thriving since emerging more
than two years ago.
“Business trends don’t last forever, and we
needed a way to stay ahead of our competition
by addressing complex problems without a lot
of people and money ... MVT is going to be a
way of life for us, and it is going to be one of our
key tools to drive improvement,” said Keith Van
Scotter, the president & CEO of Lincoln Paper,
recently.
But Cochran insists that even though MVT can
be considered a “turnaround tool,” the software
can help companies well before they find them-
selves in such dire straits.
Over the years, big names like ExxonMobil,
Verizon, Saks and Lowe’s have all turned
to QualPro to try out their business theories
in hopes of hitting a “home run,” according to
Cochran.
“It helps businesses operate more effectively,”
said Cochran. “If you have more productivity
and a better performing company, then you are
going to serve the customers better.”
Cochran believes that QualPro is second to
none in terms of its ability to discover real-world
solutions for companies in need.
“There is nobody who can do what we do,” he
said. “It’s a model that nobody’s been able to
copy.”
Part of QualPro’s success over the years is due
to happy clients like Lincoln Paper singing its
praises, but Cochran believes that the compa-
ny’s reliability and the immediacy of their results
are what keep people coming back.
“There is no smoke and mirrors — we have
never had a failure in 25 years,” he said.
But some in the bankruptcy and restructuring
world remain skeptical about the usefulness
of the tool, arguing that it will do little to help a
company struggling to escape from Chapter 11.
“It is nice but it will not solve a crisis,” said Ken-
neth Yager, a managing director of turnaround
firm Morris-Anderson & Associates.
The problem lies in the fact that MVT revolves
around a series of assumptions that often don’t
account for the complex, human element of
bankruptcies, according to Yager.
“If you are trying to navigate a bankruptcy, we
still do not have the ability to solve for human
emotion and intelligence in the microcosm of
daily details, and so this software would not
help,” he said.
Once the company is in free fall, Yager main-
tains that even if the company proceeds with
days or weeks of testing various assumptions
and theories, it will not help to address the situ-
ation already under way in court.
“In the meantime, oblivious to the results of
this intensive testing, the legal and business
battle with hundreds of stressed and distressed
stakeholders rages on, changing on an hourly
basis and violently jerking in many directions,”
he said.
Yager does believe, however, that such soft-
ware could be useful as part of a long-term
reorganization strategy, assuming the business
has enough foresight to start looking for solu-
tions to its problems early enough.
“If I could trend, then test and validate, then
load assumptions and review again with a
meaningful time between assumption changes,
this would be solid software for restructuring,”
he said. “If you were trying to advance the sci-
ence of z-scores (two-to-three-year predictor
models), this is good stuff.”
Cochran insists that there is no turf war be-
tween QualPro and the restructuring profession-
als, maintaining that the software can help them
as they try to evaluate a company’s options
going forward.
“We often come in after the consulting compa-
nies,” he said.
At the end of the day, both have the same goal,
which is saving the business and helping it
to run more efficiently, he said. “We can help
people to turn around their business.”