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Who Makes Your Company's Most Important Decisions?

  |  November 22, 2013   |  Comments

On any given Sunday, those individuals tasked with critical decision making for billion-dollar NFL franchises make decisions based largely on instinct and historical behaviors. Is your business doing the same?

shutterstock-106597682The average NFL franchise is worth $1.17 billion dollars, according to Forbes magazine. At least one-quarter of all NFL head coaches are paid $6 million annually.

Yet, on any given Sunday, those individuals tasked with critical decision making for these billion-dollar companies make decisions based largely on instinct and historical behaviors. Often, those decisions are not only wrong in their rational basis, but they are absolved by fans and media types who don't understand the mathematical implications.

Take Andy Reid, for example. Reid is the head coach of the Kansas City Chiefs and will make $7.5 million this year; his team currently sits at 9-1 after suffering their first loss this past weekend. Clearly, Reid is doing something right with the Chiefs, but on Sunday he exhibited the kind of decision making that permeates business (and not just football's business).

In the fourth quarter, with his Chiefs trailing the powerful Denver Broncos and Peyton Manning by fourteen points, Reid faced the decision of the game. His team had a fourth down and seven yards to go. They were inside Denver territory and needed to score twice, without the Broncos scoring again to have a shot at a victory. Reid chose to punt and play defense.

The win probability for the Chiefs following that punt went to 0.2 percent. Translation: GAME OVER

Two plays earlier, the Chiefs were sitting with a 3 percent chance of winning, which means the odds were stacked against them, but they still had the proverbial shot. After the punt, the Broncos moved down the field and kicked a field goal to make it a three possession game. The Chiefs would eventually score a touchdown to make it a ten point game, but even after that score, their odds of winning were still worse than when they chose to punt.

Reid made the "by the book" move and it sealed his team's fate. It's possible a series of fluke or unexpected plays could have happened and the Chiefs might have won, but that's not what win probability and analytical decision making relies on. It is based on using data to make inform decisions.

If a man making $7.5 million in charge of the day-to-day decisions for a billion dollar franchise can be so poorly informed, what can it say about your own business?

It's safe to say there is no one making day-to-day media decisions making upper-seven figures. The individuals making media partner selections, negotiating rates and optimizing campaigns have as much data as Andy Reid did on Sunday night for their own choices. Yet, are they doing it any better? Andy Reid did what football people do. He punted.

Do the people you employ, both directly and through agencies (or even on the media partner side) do the same? Or do they evaluate risk, assess opportunity and make the tough calls based on informed statistical analysis?

All business is big to those involved in it and as such, the decisions made at any given time have ongoing implications. How you make decisions, the data used versus the reliance on gut and "the way it's always been done," may be the difference between winning and losing.

Title image courtesy of Herbert Kratky/Shutterstock.com

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ABOUT THE AUTHOR

Chris Copeland

Chris Copeland is chief executive officer of GroupM Next, the forward-looking, media innovation unit of GroupM. Chris is responsible for curating and communicating insight-focused media solutions across established and emerging platforms. Leveraging his multi-year experience with emerging media companies, Chris is tasked with stewarding GroupM Next in partnership with agency leadership from GroupM's four media marketing and marketing service agencies (Maxus, MEC, MediaCom, and Mindshare).

Guiding the Predictive Insights, Technology, Education, Research, and Communications teams at GroupM Next, Chris is responsible for overseeing the amplification of insights into opportunities that directly benefit the business of GroupM agencies and their clients. GroupM is the world's largest media investment management group and the media holding arm of WPP.

Chris was selected to lead GroupM Next after nine years of leading the search marketing practice within GroupM. Among his accomplishments include the development and integration of the global search marketing offering for GroupM agencies, GroupM Search, which manages $1.3 billion in search billings globally and has grown to more than 1,000 search marketing strategists serving 40 countries.

Chris is an active member on advisory boards at the 4A's, Google, Yahoo, MSN, and I-COM. He is a frequent speaker in global forums discussing the digital marketplace, and contributes editorial commentary regularly to Advertising Age, ClickZ, MediaPost, and MediaBizBloggers.com.

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