Deciding how to decide!

Consider this classic story narrated by John Sculley in his autobiography
‘Odyssey’. In the 1970’s when he was the Vice-President marketing at
Pepsi, Coke dominated the soft drinks market. Sculley recalls that his executives were certain that Coke’s distinctive hour-glass shaped bottle was
Coke’s most important competitive advantage. The bottle design, they felt,
had become the product. Easy to grip and stack, more sturdy to withstand a vending machine’s drop, a part of American culture and the only company
logo which a person could pick up in his hand. Trying to compete with
Coke’s bottle, Pepsi had spent millions and many years in studying new
bottle designs.

In tackling the issue of how to compete with the Coke bottle, Sculley made
what is called a metadecision. He asked himself a few crucial questions. What is the crux of the issue? How should problems like this be
approached? He realized that the heart of the problem was not to compete
directly with Coke’s bottle (Pepsi’s focus in the past) but to nullify its
strengths. He decided to approach the problem by shifting the ground rules
to alter the whole playing field, pulling back and asking what the customer
really wanted.

Realizing that his people did not know enough about consumers to identify
what they really wanted in order to take marketing decisions correctly, he
launched a careful test to study how families actually consumed Pepsi and
other soft drinks in their homes. It became obvious that what the customers
wanted was packaging that made it easier for people to get more soft drinks
into their homes. Then Sculley moved into the first of the four stages in
decision making – framing the issue, which in this case was launching of
new larger and more varied packages. Pepsi began a new intelligence
gathering stage, and then, based on the findings, launched a new group of
larger packages and thereafter continued to refine the packaging. The results
were dramatic and Pepsi’s market share expanded substantially and almost
drove the Coke bottle out to extinction. Coke could not convert its famed
hour-glass silhouette bottle into larger containers.

What Sculley did is of immense significance to decision makers – take time
for an initial assessment, in which you ask yourself how this kind of decision
should be made. This activity of deciding how to decide is called
metadecision.

In the metadecision phase, ask yourself these questions:

1. What is the crux or primary difficulty in this stage? Which of the four
stages in the decision making process will be the most important?
2. In general how should decisions like this be made? Where do my own
strengths and weaknesses lie? Where do I need help?
3. Can I draw on feedback from related decisions and experiences that I
have faced in the past?

The four stages of decision making are:

•    Framing – it determines the viewpoint from which you look at the issue
and set the parameters as to which aspect of the subject  you will
consider important.
•    Gathering intelligence – gathering knowable facts and options, and
evaluation of unknowables.
•    Coming to conclusions – a systematic approach to taking a decision.
•    Learning from experience.

Metadecision Vs. ‘Plunging’

Meta decision should take place before you frame the issue. ‘Plunging’ into
the various stages of decision making can lead to disastrous consequences.
Not devoting sufficient time and effort to this phase may lead to you solving
the wrong problem thereby exacerbating the actual problem.

Take the case of a bank branch that was losing market share to its rivals. The
branch management decided that the only wayout was to aggressively
‘plunge’ into a marketing exercise. The officers were asked to jump headlong
into a ‘deposit mobilization’ exercise and virtually three quarters of the
branch staff were in the field all day. At the end of the two-month exercise,
the deposits actually fell further. When I was asked for advice I sat with the
branch officials and initiated a study involving customers who had closed
their accounts during the last year. The study revealed that they were
dissatisfied with the quality of customer service at the branch .The branch
thereafter decided to stop their outdoor marketing exercise and devote their
efforts to improving the level of customer service to existing customers. This
led to a significant growth in deposits.

In another instance a consumer durables maker approached me with his
problem – falling market share. His company was benchmarking against its
nearest competitor on all the major parameters and despite his quality and
other initiatives he could not improve his market share. I asked him to do a
metadecision exercise involving a survey of existing and potential buyers of
his product. This metadecision exercise turned out a new and profound
understanding of the market. The company implemented a plan of action to
solve the many hassles the buyers faced before and after buying the
product. The results were astounding. The company had as a consequence of
the insights from the metadecision, bypassed the competition.

A few insurance marketers approached me with a request to guide them on
how to market their insurance products in the face of growing competition
from the LIC and several other private sector players. They educated me on
the marketing strategy they had been taught and which they had been
following with limited success. It was apparent that they had followed a
strategy of ‘have product will sell’. They had been taught to ‘plunge’ into
action after gathering enough product knowledge, and follow the usual
marketing and selling tactics. I told them to take the metadecision approach.
They interviewed several existing and potential policy holders. This
metadecision stage revealed several insights as to what people expect from
an insurance policy—something that these advisors had not been told about.
The entire strategy had to be revamped and the majority of them have met
with commendable success.