Enterprise Redesign
When the Direct Model Stops Paying for Itself
Moving a long tail of fifty markets from direct to partner-led — without dropping the revenue.
The Situation
A corporate split left a new company running fifty long-tail markets sized for a parent that no longer existed. Around $900M of revenue ran through direct operations that no longer earned back their cost at that scale. The choice to go partner-led was already made higher up. The job wasn't whether to change — it was to pick what replaced direct, and design it so the revenue came through in one piece.
What Had Actually Changed
On paper the move looked easy — partners cost less and reach more. But the revenue didn't sit in the operation. It sat in the people and the relationships, and those can walk before they ever transfer.
The saving is never as clean as the model, because the transition is priced on coverage and lost on continuity.The Rebuild
That changed the real question: not whether to use partners, but who could carry the relationships across. An outside agency was a stranger to relationships built over years — the distributors already there were the obvious choice: already in the market, already inside the relationship, already carrying their own costs. The catch was concentration — hand a market to just one and you create a local monopoly that squeezes the smaller resellers and leaves the revenue stuck with one partner.
So I built the design against that from the start: two distributors per market, not one — a main one to run it, and a second held as backup for when the main one slipped. Two kept the power on the vendor's side and protected the resellers underneath.
The hard part was the people. About half left or were let go, and half of those who moved needed retention deals, paid through the distributors, to move at all. I treated keeping them as a real tool, not an afterthought — because the people were the revenue. The direct teams were losing accounts they'd built, so they fought the change. It only went through because a senior leader kept backing it in person.
The Outcome
Day one, nothing broke. The first half was a fight — revenue dipped about 10% as rivals went straight for the people and distributors. From the second half it delivered: revenue back on plan and growing, cost down about 20% after partner margin, share up, retention near 92%. The revenue came through whole — and the model became the template for every cleanup that followed.
The Judgment
A move to partners gets approved on cost and coverage, and lost on continuity. The revenue isn't in the operation — it's in the people and relationships, and they walk before they transfer. Budget to keep them, or the saving on paper never shows up.
Kept short on purpose. The longer version holds the harder part — the tensions, the trade-offs, and what fought back. Where it maps to something you're facing, I'll share the full account or walk you through it.