Decisions Fuel – What Is It?

Decisions Fuel – What Is It?

The success of any business comes from the decisions it makes and ability to execute them. The choices of what to do, and the team’s ability to do it. While true, at 50,000 feet of altitude, it’s a long way to the ground level where the rubber meets the road. It’s easy to say, but truly hard to do.

At ground level dealing with customers, employees, product and more, things get messy. To make important decisions, you need to both know there’s an issues and understand the why behind an issue to make the decision. You can think of getting to why as decision fuel. So let’s dig into an example to think this through.

We’ll use a made up company, the Awesome Clothes Co (Awesome Co for short) to help us. They sold $10M in 2021 as a 5 year old Direct to Consumer (DTC) clothing brand.

The decisions that the Awesome Co team makes as they plot their course for 2021 and beyond, will define their outcomes. Decisions are their choices to do or not do some particular thing. The decision to act or not, and what specific course is taken. Decisions may be about marketing campaigns, outsourcing service or a thousand other factors. Based on a company’s strategic plan to grow 30% in 2021, decisions big and small pave the road from today to the future where they’ve crushed plan and celebrated their win.

Or the opposite. 

The ultimate success or failure of your businesses outcome lives in two different places. It’s found in the collections of all of the decisions that you and your team make, but also in the outcome of those decisions they failed to see or act on. Some might call these the hands of fate. In today’s fast moving business world, with competition on all sides, businesses are working in a more dynamic market than ever before and it’s really easy to miss subtle signals through all the noise that could be the key to discovering unseen risks.

Let’s say Awesome Clothes is doing really well and on track to reach their plan. In this case, the leaders aren’t looking to change the business in a big way, but will be vigilant to newly discovered risks that come up. It might be changes in consumer behaviour, new competitors, supplier issues or other issues the leaders need to either address or ignored.

New risks, if unaddressed, may undermine the businesses momentum and take them off plan. There may be issues with products, customers, policy mismatches or thousands of other things. But out of all the possible ones, let’s consider just one. Awesome Clothes may experience slowing growth of a top 3 selling product that contributed $3M last year! Given the size of its portion of overall sales, left unaddressed it alone could sacrifice meeting plan.

While a change in a product’s revenue growth is easy to see with Shopify Plus, understanding its root cause is another much harder problem. 

To recap, we have a big risk to this years plans, but without understanding why it’s happening, it’s not clear what decision can be made to change it. Once we know there IS an issue, then comes time consuming research and meetings to uncover why. Only with the why in hand can you figure out your options and make the call. The information behind the why is Decision Fuel. It’s the data + context + options = decide.

To make our story even more interesting, let’s add some drama. The product is both a $3M annual contributor, but is also a seasonal spring favorite! 80% of the annual volume is in April and May.

This short window of time makes this really tricky. From the point that the slowing sales growth is seen, the clock is running. Though about another way, the fuse is lit. If Awesome co hasn’t prepared to get to Why quickly, a slow and clunky process will likely mean that they won’t known Why until the spring season is over. Their decision  won’t change the impact on 2021. The damage is done. This means that you both need decision fuel and need it quickly. You need to, as the Boy Scout saying goes, “Be prepared”.

This example also shines a bright light on the reality of timing in decisions. Decisions are like dairy products, they have a shelf life. If a decision is made too late, the impact of risks is unavoidable. To fuel decisions, leaders need to both see and understand risk as early as possible, know the why quickly, to make their decisions with as much time to act as possible. Your time to act is your runway, it needs to be long enough to get the plane in the air.

That’s really the bottom line on performance, what choices got made.