I have been fortunate in my career to serve a wide range of large businesses globally across several complex industries, including retail, IT, telecommunications and entertainment. While diverse in many ways, enterprises in these industries all can be classified as what I call highly transactional businesses.
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Nurturing a culture of awareness, adaptability, resilience through innovation

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Whatever the products or services offered, such businesses conduct commerce through many, many transactions. Some run on a large assortment. Some sell consumables (read: high-frequency). Others offer goods or services that drive very frequent customer interactions. All share, in my view, a kind of operational complexity. Whether because of complex supply chains, uncertain demand, changing competition, high volatility or all of the above, these businesses must confront and manage the operational complexity to survive.

One of my early mentors used to say (I am paraphrasing a bit here):

The keys to initial success in business are identifying a differentiable niche and forming a coherent strategy to offer products and services to that niche in a profitable way.

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This always seemed true to me, and still does. I would add, though, that the key to continued success is to execute on that strategy in a manner that is highly aware, adaptive and resilient.

Highly transactional businesses, in my view, survive and thrive based on three key factors:

• how often decisions are made (and challenged) by data and insights
• how well they anticipate and quantify uncertainty in planning and goal-setting
• how well they instill a culture of awareness, adaptation and resilience in execution

In effect, my grandmother (and perhaps yours) might have asked in a simpler way:

How well do these businesses make lemonade out of the lemons that life gives then?

In my years supporting analytics, demand modeling, and price optimization systems for many of these firms, I have had the opportunity to see firsthand how different enterprises around the world make both strategic and tactical decisions. While difficult to rank or rate in any absolute sense given the vast diversity of situations, I’ll be so bold as to say that I have observed in these engagements what one might call a continuum of efficacy. Put another way, I have seen what I would call good, great, and exceptional execution. As no enterprise of this kind survives for too long making bad decisions repeatedly, I have not seen many cases of poor execution!

I have been reflecting a lot lately on how to foster and nurture this culture of awareness, adaptation, and resilience, especially for organizations that are large, complex and diverse. With a nod to Tom Peter's classic In Search of Excellence: Lessons from America’s Best-Run Companies, what makes these firms exceptional?

Any highly transactional business, by definition, has to make a lot of decisions. Nearly all leaders must balance top-down and bottoms-up management thinking, delegating authority and granting autonomy while still enforcing adherence to strategy and compliance on legal and ethical matters. So what did I observe that made the difference?

It isn’t that, in my view, the exceptional businesses made more decisions. Instead, they made more impactful decisions, more quickly. In the context of these highly transactional businesses, a more impactful decision tends to be a larger-scale decision.

Rather than make thousands of small, individual decisions about different parts of a product category or system in an attempt to “micro-optimize”, the most exceptional firms, in my observation. form a strategy, set rules for tiering and assortment and let their systems cascade the "big" decisions automatically to cover the full range in a predictable, logical way. At the same time, they are ready to adapt that decision as conditions change with a deliberate and regular effort to gather data and insights that could challenge their original assumptions. The very best firms I observed go even further. Knowing some of their assumptions will not hold, they make specific plans for what to do when (not if) demand doesn't match supply. Instead of "dealing with it", they calibrate their financial assumptions with these contingency plans from the start.

Easy to say, and hard to do, right?

On the premise that culture must be framed by leaders, I started thinking about what individuals like me should do to make more impactful decisions that are well-informed by data and insights. We have only so much bandwidth on any given day, so we must think about scaling ourselves if we are to scale our organization.

Taking lessons from my work with these clients across industries and geography as a start, I then did some rigorous self-reflection on my own projects and programs, and on how I had driven the decision-making and review processes. I analyzed areas where I was not happy with my performance or that of my teams. With that introspection, I found some common patterns. My assessment of performance through a complex project was far less about the number of surprises or setbacks; but rather, more about the manner in which my teams and I put work and deliverables in order. For my projects, at least, the riskiest and hardest to measure elements were all front-loaded in the program - regardless of whether it was convenient or not. In these cases, we built trust in the data first and ensured there were rigorous and thorough acceptance tests before moving that data into the larger systems where business users could review.

Putting all this together, I distilled my analysis into a framework that I call “Focus, Frame and Act.” Capturing the best of what I observed from work with clients and the lessons from my own work, I offer this in the form of five questions:

Focus, Frame, and Act

A Decision Optimization Planning Framework for Leaders

1. What data do we need? What other data might we want? How do we acquire it all at the pace and scope that we need?
2. What insights do we need from this data, so we know which things don’t matter?
3. How will we successfully confront the full scale and velocity of the data as early as possible to front-load risk and avoid delays later?
4. How will we ensure that this initiative drives "directional review", using data‑driven insights to quantify uncertainty and to challenge past assumptions and decisions?
5. How will this initiative enable my team and me to scale ourselves to make fewer, more impactful decisions?

I am passionate about the art and science of decision optimization. I believe that innovation in this area - across both processes and systems - can enable individuals and organizations to be more successful, especially in times of rapidly changing business conditions. Powerful systems and tools to acquire data, to generate insights, and to inform key decisions are broadly available - at relatively low cost. I see a tremendous opportunity for organizations to increase their successful use of these tools to become more aware, adaptive and resilient in the face of volatility and uncertainty.

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