The future of decision making
What's the fix?
Consumer products companies can improve their decision-making and business performance by focusing these actions:
Defining value drivers
Drivers (including market, competitor, operational and financial) need to be quantified and linked to outcome metrics and other drivers. Tying outcome metrics to drivers mathematically creates a robust framework for planning, reporting and decision-making.
Automating variance analysis to reveal root causes
This analysis focuses on revealing root causes that may otherwise have gone unnoticed. For example, if a revenue target is missed, a driver-based analysis may reveal a root cause to be a decline in units as opposed to price based on a smaller market size, even though the market share has exceeded plan.
To accurately determine the scale and scope of a performance management program, companies need to understand their culture.
Conducting “what-if” scenarios and sensitivity analyses to improve strategic and tactical decision-making
Drivers enable fact-based evaluations of business alternatives, as well as the ability to run risk-specific scenarios.
Streamlining decision support and analysis
Traditional approaches require several management layers for ad hoc analysis and the application of intuition or personal judgment. Driver insights streamline decision-making by creating a consistent structure and basing decisions on fact, not intuition.
Facilitating a culture change
In preparing for an organizational shift, companies will need to understand their culture's ability to embrace change, how the implementation of a robust performance management program rooted in driver analytics will be supported within the organization, and the steps necessary to link the culture shift back to strategy.