A Tribute to Jonathan Byrnes of Profit Isle

Gifted mind. Generous spirit. A rare combination that immediately surfaces when thinking of Jonathan Byrnes, who died Tuesday, May 7. He was a senior lecturer at MIT for 33 years, as well as founder and chairman of Profit Isle, a SaaS profit analytics software provider and consultancy.

Jonathan was a prolific author and industry-leading consultant. While he may be most remembered for his research and insights into profitability management, he pioneered many process improvement concepts across the spectrum of customer-supplier relationships in supply chain management and distribution across more than 40 years, among them vendor-managed inventory, value creation, customer profitability and strategic pricing.

Jonathan was a deep believer in and brilliant teacher of case studies, with some of his consulting engagements among the most powerful examples. His work with the healthcare company Baxter in the 1980s was groundbreaking, which he outlined in this MDM article, “Turbocharge Your Value Proposition.” He helped develop one of the first vendor-managed inventory systems for Baxter, an innovation that changed the healthcare industry, and now is an integral part of so many distributors’ value-added services portfolio across every sector.

Jonathan was a mentor and good friend to hundreds — if not thousands — of those he taught, advised and partnered with over decades, and who today are successful leaders of global supply chain and distribution enterprises, among many other industries. In every conversation, Jonathan found a connection and always shared a thoughtful perspective, praise and encouragement.

He was a longtime and valued contributing author for Modern Distribution Management (here’s an index page of Jonathan’s MDM articles, blogs, podcasts and webinar content). In addition, he was most recently a columnist for Chief Executive Group, publishers of StrategicCFO360. He also wrote a monthly column on managing profitability, called “The Bottom Line,” in Harvard Business School’s Working Knowledge e-newsletter.

Jonathan’s keen insight saw right through conventional wisdom to get to the heart of the matter. He knew the power of great stories to illustrate business concepts. One of my favorites was one he shared in an MDM article in 2011: “Change Management: Another View of ‘Paving the Cowpaths’.”

The premise is that ‘paving the cowpaths’ is an expression often used to criticize weak change management programs, “the seemingly obvious folly of managing change by simply changing nothing of importance,” in his words. He cites the reengineering movement pushing this idea that change managers should reengineer processes rather than just automate them.

And then Jonathan flips the well-worn concept on its head: “Yet managing programs of fundamental, sweeping change requires a unique process that is almost counter-intuitive. The reason is that change management most often takes place in a well-established organizational context.”

The lesson is that paving the cowpaths is in fact a critical first step for the organization to get onboard, which is essential for creating the much larger goal of sweeping change. I hope you’ll take the time to read it; his advice is not only timeless, it is perhaps even more meaningful today as automation and AI applications proliferate, and best practice for any transformational work to start with small pilots.

He is the author of Islands of Profit in a Sea of Red Ink, which Inc Magazine named a Best Book of the Year, and was published in five languages. It was in Islands of Profit where he takes the reader through the discovery in his research of what he terms two astonishing facts:

• Nearly 40% of every company is unprofitable, by any measure.
• 20%-30% of every company is so profitable that it provides all the reported earnings — and subsidizes the losses — of the entire business.

From there, he outlines the formula for deeper analysis into the concepts of profit mapping and cost-to-serve.

He also co-authored, with his business partner John Wass, Choose Your Customer: How to Compete with the Digital Giants and Thrive, published in 2021. He served on the Board of Directors of MSC Industrial for more than a decade, and on boards of directors or advisors for several private companies.

Dr. Byrnes earned a DBA from Harvard University in 1980, and an MBA (Smith Prize for academic distinction and leadership) from Columbia University in 1974. He is Past President of the Harvard Alumni Association. He also served for five years on the Board of Directors of the Harvard Business School Alumni Association, for two years on Harvard’s Committee on Shareholder Responsibility, and for four years on the Board of Directors of Harvard Magazine. He also served on a Presidential Task Force for Columbia University.

He was deeply passionate about the value of distribution, process improvement, education and so many other interests in life — travel, hiking and the outdoors just a few in a long list and through which he found common ground with so many.

There are certain people in this world who make you better when they are in the room. Jonathan was at the top of that list. As so many are now saying, I will deeply miss our conversations and am so grateful for our friendship. His contributions raised not just one industry sector, but the much more expansive networks of supply chain, and by extension the efficiency of global economies.

View the Boston Globe’s obituary for Jonathan Byrnes here.