SOURCING EXCELLENCE
DECISION ARCHITECTURE
Functions can make individually rational decisions and still make the enterprise worse off.
An end-cap promotion made the problem concrete. Sales wanted more placements because they drove revenue. Marketing cared about presentation. Procurement focused on total cost. Operations had to assemble, stock and deliver the displays.
Everyone supported the promotion. Each function experienced the tradeoffs differently.
The answer was not to force one function to absorb the burden. The system was redesigned so a distribution partner assembled and delivered the displays.
The objective stayed the same. The design changed.
Sometimes the better answer is not a compromise between functions. It is changing the system so the tradeoff itself changes.