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Distributors' Perspective: The importance of keeping it simple

Volume 27/Number 24; March 31/April 7, 2014

By David Powell

powell_davidNapoleon Bonaparte once said, “Nothing is more difficult, and therefore more precious, than to be able to decide.”

Colin Powell’s formula for decision-making is as follows:

“Part I: Use the formula P = 40 to 70, in which P stands for the probability of success and the numbers indicate the percentage of information acquired.

Part II: Once the information is in the 40 to 70 range, go with your gut.”

Powell believes that there is a sweet spot for good decision making that requires you to get enough information to make a good decision, but not too much so you don’t run the risk of analysis paralysis and delay making the decision, or don’t make the decision at all (which is still a decision, just not a good one). If you wait until you are 100% sure, it is almost always too late to capitalize on that opportunity being offered to you or to avoid the problem you are dealing with. Putting off making a decision in order to procure more and more information tends to confuse the issue at hand and makes the decision process more difficult than it already was.

As distributors, we are frequently—sometimes daily—sent offers from new suppliers to carry their product lines. Without a good decision-making process, we could potentially pass up a great opportunity or make very bad decisions to take on product lines that aren’t a good fit for our companies.

I’ll also add the K.I.S.S. principle to this equation: “Keep It Simple, Stupid.” The U.S. Navy asserted this as a design principle back in 1960. The idea is that systems work best if they are kept simple and not allowed to become overly complicated. This principle can be applied to almost anything in our personal and professional lives, and certainly can be applied to the decision-making process.

With so many data points coming at us via the Internet, trade publications, news outlets, business partners, customers, etc., it’s tough to keep it simple and stay true to an effective decision-making process.

The NAFCD trend reports are an excellent way to get key data points in a simple, straightforward manner to help you and your management teams make better decisions. For example, the most recent iteration of the Distributor and Manufacturer Executive Trends Index provided by NAFCD provides an easy-to-read summary report that touches on all key data points contained in the main report. Our company utilizes these trend reports extensively, as well as the other tools NAFCD provides (like the Profit Improvement Report) to supplement our decision-making process regarding opportunities and threats in our markets. These reports provide data in a simple format to aid us in good decision-making practices.

Upton Sinclair famously said, “It’s hard to get a man to understand something if his paycheck depends upon him not understanding it.” Sometimes you need to “call the ball,” like Maverick in “Top Gun.” If you know the right decision and you’ve followed the steps above, go ahead and make it. If you always wait for everyone to be in agreement, important decisions will not be made.