How CPG Leaders Can Make Better Decisions

How CPG Leaders Can Make Better Decisions

CPG Leaders Can Make Better DecisionsThink about the time when the doctor dilated your eyes in an eye exam after which you walked around for a few hours trying to do life’s very basic things to no avail. This situation feels very similar to how many leaders feel when asked to make some of business’s most basic strategic decisions. How can this be? CPG leaders have some of the best information available to anyone in an industry such as shelf data, customer pricing, consumer trends, etc. In addition, we find these leaders are smart, rational decision makers so why is decision making so hard for them?

The truth is that too many smart consumer products leaders try to “tough-it-out,” thinking it is normal to make “hard” decisions. Most of the time the tough decision is only tough because those tasked with collecting or presenting the facts haven’t gathered or presented the right information.

CPG leaders are typically given only part of the data needed for them to make decisions and must demand the right information to make better decisions to improve results.

Making decisions without the right information has the same debilitating effect to our decision-making as it does to our eyesight. Leaders need to stop trying to hone their good guessing skills and hire people qualified to gather information they need and present it in a way that supports better decision making. When we work with leaders on a decision, we not only collect and present data, but we also focus on fixing three major problems we commonly find in team decision systems:

1. People are comfortable with relatively few research methods or data upon which to base decisions

Most people involved are very bright but are typically most comfortable with only one or a few types of data to make a decision. This means they focus on say market research and operations capabilities, but miss the financial factors or competitor/market reaction. Even if all areas are covered, there is no acknowledgment in the weakness of some data presented. Market research is the most common data set that is either the strong data set presented without financial/competitor context or is merely vast in amount but misses answering several key strategic questions needed.

Solution: Ask for and test facts that provide you insight into the various data necessary to make a decision. Watch for distractions or too much superfluous data in one area. Ask what key questions need to be answered to make this decision and ensure they get it for you.

2. People do not consider what they don’t know in making decisions

Know what you don’t know : simple statement; profound meaning. Teams sometimes present leaders with conclusions that have no basis in fact. They are “educated” guesses at best and more likely, when you look through this lens, you’ll find they are merely one’s opinion presented strongly or confidently. When pressed, they might use a bullying tactic –fight or flight by speaking strongly or shrugging off discussion. They might also cover up the answer by including irrelevant facts or deflecting the question such as steering the conversation in another direction.

Solution: Call out the elephant in the room. Engage and ask clarifying questions such as, “What are the facts to support this point?” Coach the team to embrace discussion around weak data, uncertainty in outcomes and alternate conclusions. Sometimes it is easiest to merely ask, “What happens if we are wrong in this assumption and what is the plan?” assuming the alternative situations/answers turn out to be true or happen. You will always have uncertainty in decisions, but how you handle and plan for those uncertainties or unknowns is what you must do well as the leader.

3. Leaders don’t engage at the front-end of the project properly or at all

Some leaders think they should leave the details in preparing for these decisions to direct reports. If it is your decision, ignoring which questions the team will explore during setup is not empowerment. Typically, by the time you get the information presented to you, if it is wrong you will not have the time or money to have it redone. Even worse, direct reports might try to chide you as the leader accusing you of micro-management when you try to discuss upfront what the right questions are. They might even try to argue that this will delay time to completion, or that this should be solely their decision.

Solution: Do not spar on any of these points, just act. These are situations where you have the ultimate responsibility for the strategic decision and likely the best vantage point from which to see how to make this decision. Great leaders discuss ahead of time the right information necessary for a strategic decision in which they are involved prior to the team getting started to collect data. They also promote a culture of truth-seeking in data collection and limiting bias in presentations. They realize the real costs in these situations stem from the results of making a bad decision not the cost of added data collection. Find people who consider multiple research and data collection methods, tie disparate data together in a story and explore how to handle uncertainties. Get the information you need to feel comfortable you are making a well-balanced fact-based decision.

If there is one thing we can leave with you, it is this: Engage with the team early to think through to the end. Thinking through to the end is rooted in all our decision-support processes since our firm began solely as a strategy consulting group and it is one of the core values of our firm. You will find that the whole decision process becomes easier because everyone focuses on the right questions. Resist giving in to inexperienced teams who might try to skip this hard, but critical thinking at startup (for more insight read Framing the Problem).

In conclusion, fix your decision-making sight. Demand proper information so you can start making better decisions and be a more successful leader. The Valen Group is a growth and innovation firm with integrated services in strategy and innovation consulting, market research and strategic brand licensing. The principles presented herein are the principles by which our firm designs and executes projects. We provide integrated insight methods across strategic, financial and consumer research methods to help you make better decisions.

If you’d like to learn about how we might help you gather the right information to make a better decisions, please contact us at +1 513 842 6305 or