Cost-Benefit Analysis Techniques

𝗧𝗼𝗽 𝗙𝗠𝗖𝗚𝘀 𝗮𝗿𝗲 𝗾𝘂𝗶𝗲𝘁𝗹𝘆 𝗰𝘂𝘁𝘁𝗶𝗻𝗴 𝟭𝟬-𝟯𝟬% 𝗼𝗳 𝘁𝗵𝗲𝗶𝗿 𝘁𝗮𝗶𝗹 𝗦𝗞𝗨𝘀. 𝗠𝗼𝘀𝘁 𝗙𝗠𝗖𝗚𝘀 𝗮𝗿𝗲 𝗰𝘂𝘁𝘁𝗶𝗻𝗴 𝘁𝗼𝗼. 𝗕𝘂𝘁 𝘁𝗵𝗲𝘆'𝗿𝗲 𝗸𝗶𝗹𝗹𝗶𝗻𝗴 𝗴𝗿𝗼𝘄𝘁𝗵, 𝗻𝗼𝘁 𝗰𝗿𝗲𝗮𝘁𝗶𝗻𝗴 𝗶𝘁. → Like it or not, Shrink to Grow is happening. → Cutting strategically creates growth. → Cutting randomly kills it. Yet, most are doing it wrong! They risk destroying their mid-term competitive opportunities. In the past year, I deployed these approaches with 3 FMCGs. ↳ Accelerated growth: +3-4%. ↳ Working capital freed: €150M+. 𝗧𝗵𝗲 𝟵 𝗮𝗽𝗽𝗿𝗼𝗮𝗰𝗵𝗲𝘀 𝘁𝗵𝗮𝘁 𝗮𝗰𝘁𝘂𝗮𝗹𝗹𝘆 𝗱𝗲𝗹𝗶𝘃𝗲𝗿: 𝟭. 𝗣𝗼𝗿𝘁𝗳𝗼𝗹𝗶𝗼 𝗗𝗶𝗹𝘂𝘁𝗶𝗼𝗻 = €𝟱𝟬𝗠 𝗵𝗶𝗱𝗱𝗲𝗻 𝗰𝗼𝘀𝘁 ↳ Your bottom 30% SKUs drain focus and funds. ↳ One client cut them. Reinvested in top performers. ↳ Result: Double-digit revenue growth on 70% of SKUs. 𝟮. 𝗢𝘃𝗲𝗿𝗹𝗮𝗽𝗽𝗶𝗻𝗴 𝗕𝗿𝗮𝗻𝗱𝘀 = 𝗖𝗮𝗻𝗻𝗶𝗯𝗮𝗹𝗶𝘀𝗮𝘁𝗶𝗼𝗻 ↳ Your brands fight for the same consumers. ↳ Merge overlaps. One strong masterbrand beats five confused ones. ↳ €80M saved in marketing. Share grew 2-3%. 𝟯. 𝗜𝗻𝗻𝗼𝘃𝗮𝘁𝗶𝗼𝗻 𝗕𝗹𝗼𝗮𝘁 = 𝟴𝟱% 𝗳𝗮𝗶𝗹𝘂𝗿𝗲 𝗿𝗮𝘁𝗲 ↳ Launching for launching's sake. Nothing sticks. ↳ Implement "2-in, 3-out" rule. Focus + discipline. ↳ Innovation success rate jumped from 15% to 42%. 𝟰. 𝗚𝗲𝗼𝗴𝗿𝗮𝗽𝗵𝗶𝗰 𝗢𝘃𝗲𝗿𝘀𝘁𝗿𝗲𝘁𝗰𝗵 = 𝗕𝗹𝗲𝗲𝗱𝗶𝗻𝗴 𝗰𝗮𝘀𝗵 ↳ You can't win everywhere. Stop trying. ↳ Tier markets by RTW and Value at Stake. ↳ Pull from bottom-left. Double down top-right. 𝟱. 𝗖𝗵𝗮𝗻𝗻𝗲𝗹 𝗖𝗼𝗺𝗽𝗹𝗲𝘅𝗶𝘁𝘆 = 𝗗𝗶𝗹𝘂𝘁𝗲𝗱 𝗶𝗺𝗽𝗮𝗰𝘁 ↳ Not all channels deserve equal investment. ↳ Focus on penetration drivers. Cut the vanity plays. ↳ Return improved 45% with 30% fewer touchpoints. 𝟲. 𝗧𝗮𝗹𝗲𝗻𝘁 𝗠𝗶𝘀𝗮𝗹𝗹𝗼𝗰𝗮𝘁𝗶𝗼𝗻 = 𝗪𝗮𝘀𝘁𝗲𝗱 𝗴𝗲𝗻𝗶𝘂𝘀 ↳ Best people managing dying brands. ↳ Move the top 10% to the biggest 20% opportunities. ↳ Growth acceleration: 3x in 18 months. 𝟳. 𝗠𝗮𝗿𝗸𝗲𝘁𝗶𝗻𝗴 𝗦𝗽𝗿𝗮𝘆 & 𝗣𝗿𝗮𝘆 = -𝟮𝟱% 𝗥𝗢𝗜 ↳ Stop budgeting by habit. Rebuild around value-at-stake. ↳ Shift 25% to power cells. Cut the rest. ↳ Same spend. 40% better results. 𝟴. 𝗩𝗮𝗹𝘂𝗲 𝗦𝗽𝗮𝗰𝗲 𝗘𝗰𝗼𝗻𝗼𝗺𝗶𝗰𝘀 = 𝗖𝗼𝘀𝘁 𝗲𝘅𝗽𝗹𝗼𝘀𝗶𝗼𝗻 ↳ Every extra SKU adds €200K unseen cost. ↳ Map to demand spaces. Kill redundancy. ↳ Efficiency gains funded innovation. 𝟵. 𝗟𝗲𝗮𝗱𝗲𝗿𝘀𝗵𝗶𝗽 𝗕𝗮𝗻𝗱𝘄𝗶𝗱𝘁𝗵 = 𝗘𝘅𝗲𝗰𝘂𝘁𝗶𝗼𝗻 𝗳𝗮𝗶𝗹𝘂𝗿𝗲 ↳ 15 priorities = 0 progress. ↳ Limit to 3-5 cross-functional goals. ↳ Clarity compounds. Confusion kills. 𝗧𝗵𝗲 𝗵𝗮𝗿𝗱 𝘁𝗿𝘂𝘁𝗵: Cut clutter. Focus firepower. Win where it matters. Every week you delay, you lose millions in lost opportunity. Your competitors started >12 months ago. 𝗜𝗳 𝘆𝗼𝘂'𝗿𝗲 𝘀𝘁𝗶𝗹𝗹 "𝗮𝘀𝘀𝗲𝘀𝘀𝗶𝗻𝗴 𝗼𝗽𝘁𝗶𝗼𝗻𝘀": You're behind. Turn bloat into growth: DM me. ___________ 👋 Hi, I am Filiberto. Follow me for sharp FMCG strategic insights. If you like this post, you are going to love my newsletter: https://lnkd.in/dFwbrjwG

🎄 Day 12 of the #AdventOfOR 2025! When stakeholders ask you to "balance profit and risk," they're not asking for a weighted sum. They're asking for a conversation. You've built the "Max Profit" model. Now, the stakeholders want to balance that profit with Risk. This is where multi-objective optimization gets tricky: how do you balance two things measured on fundamentally different scales (profit in dollars vs. risk in squared units)? You can try Hierarchical #Optimization. Step 1: Maximize profit to find the ceiling, P*. Step 2: Minimize risk subject to a constraint: Profit ≥ alpha * P* (where alpha is a target like 70% or 90%). This approach eliminates the need for impossible normalization weights and replaces it with an interpretable business question: "What is the minimum risk if I accept 90% of our maximum profit?" This is the essence of #DecisionOps: We push the model to the Nextmv platform, exposing alpha (the profit target) as a simple UI slider. Stakeholders can now generate an entire risk-return curve in minutes, exploring scenarios like "the risk penalty for 95% profit" without touching a single line of code. That's the difference between optimization as a report vs optimization as a product. 🫵 Your turn: How do YOU handle multi-objective problems when objectives have completely different scales? Weighted sums, hierarchical, or something else?

Engaging in a #stakeholder mapping exercise is crucial for identifying opportunities. Start by pinpointing broad stakeholder groups, then drill down to specific stakeholders within those groups, assessing their influence, effects, and material needs that drive value creation. Boards should follow a simple flow: 𝟏. 𝐃𝐢𝐬𝐜𝐨𝐯𝐞𝐫 𝐬𝐭𝐚𝐤𝐞𝐡𝐨𝐥𝐝𝐞𝐫𝐬: 𝐒𝐭𝐚𝐫𝐭 𝐰𝐢𝐭𝐡 𝐛𝐫𝐨𝐚𝐝 𝐠𝐫𝐨𝐮𝐩𝐬, 𝐭𝐡𝐞𝐧 𝐢𝐝𝐞𝐧𝐭𝐢𝐟𝐲 𝐠𝐫𝐚𝐧𝐮𝐥𝐚𝐫 𝐬𝐭𝐚𝐤𝐞𝐡𝐨𝐥𝐝𝐞𝐫𝐬. 𝟐. 𝐃𝐞𝐯𝐞𝐥𝐨𝐩 𝐚 𝐬𝐭𝐚𝐤𝐞𝐡𝐨𝐥𝐝𝐞𝐫 𝐭𝐡𝐞𝐬𝐢𝐬 𝐛𝐲 𝐚𝐝𝐝𝐢𝐧𝐠 𝐬𝐞𝐯𝐞𝐫𝐚𝐥 𝐝𝐚𝐭𝐚 𝐩𝐨𝐢𝐧𝐭𝐬:   - 𝑬𝒇𝒇𝒆𝒄𝒕: Assess the material effects of the stakeholder.   - 𝑰𝒏𝒇𝒍𝒖𝒆𝒏𝒄𝒆: Evaluate the stakeholder's influence over the company or other stakeholders. - 𝑽𝒂𝒍𝒖𝒆 𝑪𝒓𝒆𝒂𝒕𝒊𝒐𝒏: Identify the value the stakeholder brings to the company.  - 𝑶𝒖𝒕𝒄𝒐𝒎𝒆: Measure the outcomes of value creation with tangible metrics. This approach ensures a comprehensive understanding of your stakeholders, leading to strategic #valuecreation and measurable success.

Stakeholder Engagement and Materiality Analysis Framework 🌍 Another great visualization from Enel’s 2023 Sustainability Report, showing their process to develop the materiality analysis. It starts with stakeholder engagement as the foundation. The process begins by mapping both internal and external stakeholders, ensuring that a wide range of perspectives are considered. Stakeholder participation is essential as the basis for any materiality analysis. It ensures that the company captures diverse expectations, concerns, and insights that reflect real-world impacts and risks. Enel uses multiple engagement methods, from surveys and focus groups to direct consultations, led by different corporate functions with varying levels of responsibility. This allows for a continuous and active dialogue. Once stakeholder input is collected, ESG topics and megatrends are identified and assessed. This step is critical to align the analysis with evolving environmental, social, and governance priorities. The next phase evaluates the relevance of these topics to stakeholders, as well as their priority, satisfaction, and impact levels. This helps distinguish between emerging issues and long-standing priorities. A core element is the identification of potentially material impacts, risks, and opportunities (IROs). These are assessed through the lens of both impact materiality and financial materiality. Impact materiality considers how the company’s activities affect the economy, the environment, and people, including human rights. It focuses on the outward consequences of operations. Financial materiality looks at how ESG factors can influence the company’s financial position, performance, cash flows, and access to capital over the short, medium, and long term. Both dimensions are essential to comply with evolving regulations such as CSRD and ESRS, which require a double materiality perspective in sustainability reporting. The outcome is a set of material topics that inform sustainability objectives, guide decision-making, and strengthen stakeholder relationships. This structured approach ensures that sustainability planning is grounded in real-world priorities, balancing stakeholder expectations with the company’s strategic goals. Source: Enel #sustainability #business #sustainable #esg

🔍 Can we really predict the impact of research, or is it all just speculation? A new study by Ohid Yaqub and colleagues seeks to understand this, comparing anticipated (ex ante) and realised (ex post) research impact claims using data from the UK's Research Excellence Framework (REF) 2014 and comparing it to grant applications. They present some interesting findings: 👉  Research impact is to some degree predictable – 76% of cases showed alignment between anticipated impact (in grant applications) and actual impact reported in REF. 👉 Stakeholder and topic alignment is common – 89% of cases identified the same general type of stakeholder, and 83% showed topic alignment. 👉 Co-production strengths predictability – 54% of cases involved co-production (collaborative research with end-users), which correlated with higher impact predictability. 👉 Disciplinary differences stood out – AHRC-funded research had the highest stakeholder alignment (61%), while MRC-funded projects were less predictable. So while research impact isn’t entirely random, but we must maintain a balance between setting up structured impact pathways, but also remaining open to emergent, unforeseen outcomes. 💡 What does this mean for researchers? ✅ Engage stakeholders early – Build relationships with beneficiaries from the start. ✅ Be realistic in impact statements – Avoid over-promising; focus on mechanisms for ongoing engagement. ✅ Use co-production strategies – Work with end-users (such as policymakers, industry, civil society) to enhance usability. ✅ Document unintended impact pathways – Unexpected outcomes matter, track them to better understand research influence over time. #ResearchImpact #ImpactEvaluation #KnowledgeExchange #ResearchFunding

Impact evaluation is a crucial tool for understanding the effectiveness of development programs, offering insights into how interventions influence their intended beneficiaries. The Handbook on Impact Evaluation: Quantitative Methods and Practices, authored by Shahidur R. Khandker, Gayatri B. Koolwal, and Hussain A. Samad, presents a comprehensive approach to designing and conducting rigorous evaluations in complex environments. With its emphasis on quantitative methods, this guide serves as a vital resource for policymakers, researchers, and practitioners striving to assess and enhance the impact of programs aimed at reducing poverty and fostering development. The handbook delves into a variety of techniques, including randomized controlled trials, propensity score matching, double-difference methods, and regression discontinuity designs, each tailored to address specific evaluation challenges. It bridges theory and practice, offering case studies and practical examples from global programs, such as conditional cash transfers in Mexico and rural electrification in Nepal. By integrating both ex-ante and ex-post evaluation methods, it equips evaluators to not only measure program outcomes but also anticipate potential impacts in diverse settings. This resource transcends technical guidance, emphasizing the strategic value of impact evaluation in informing evidence-based policy decisions and improving resource allocation. Whether for evaluating microcredit programs, infrastructure projects, or social initiatives, the methodologies outlined provide a robust framework for generating actionable insights that can drive sustainable and equitable development worldwide.

Your evaluation was rigorous. Your report killed it. You designed the methodology carefully. You interrogated the findings until you were confident they were right. Then you wrote a 80-page document. It buried the most important finding on page 34, and.. submitted it to a stakeholder who read the executive summary on a flight and never opened it again. The evaluation was good. The report undid it. And this isn't a personal failing. It's a sector-wide one. The development sector produces thousands of evaluation reports every year. Most of them change nothing. The writing is why. Not the data. Not the methodology. Not the sampling strategy or the theory of change. The writing. 𝗖𝗹𝗲𝗮𝗿. 𝗖𝗼𝗻𝗰𝗶𝘀𝗲. 𝗖𝗼𝗺𝗽𝗲𝗹𝗹𝗶𝗻𝗴. 𝗣𝗶𝗰𝗸 𝗮𝗻𝘆 𝘁𝘄𝗼, 𝗺𝗼𝘀𝘁 𝗲𝘃𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻 𝗿𝗲𝗽𝗼𝗿𝘁𝘀 𝗺𝗮𝗻𝗮𝗴𝗲 𝘇𝗲𝗿𝗼. They're dense where they should be direct. Cautious where they should be bold. Written to demonstrate expertise rather than to communicate it. And the people who needed to act on the findings... the minister skimming between meetings, the programme manager already stretched thin, the donor trying to decide whether to renew, they encountered a wall of jargon, a forest of tables, and a recommendation section so hedged and generalised it could apply to any programme anywhere. So they didn't act. Or they acted on instinct instead of evidence. Because the report didn't give them a choice. Here's how to do better... 1. Write for a real audience, not an abstract one ↳ Not “stakeholders” ↳ The specific person who will use this ↳ The minister with 5 minutes ↳ The programme manager under pressure ↳ The donor deciding on funding If you don’t know who you’re writing for, you’ll default to writing for yourself. 2. Start with the decision, not the methodology ↳ What needs to change because of this report? Write to that. 3. Lead with the answer ↳ Don’t make people work for the insight Page 1 should tell them what matters 4. Design for use, not submission ↳ A report is not the final product A decision is ---- Want insights like this directly in your inbox? Sign up for my mailing list. It's FREE! 👉 https://lnkd.in/ec8mqV2M

The most dangerous mistake in change management? Believing everyone is “on your side.” Support in the room doesn’t always mean support in reality. That’s why stakeholder assessment is non-negotiable. Here are the steps to conduct stakeholder assessment: Step 1: Identify Stakeholders Start with a wide net. → Brainstorm across teams → Review organizational charts → Look at records from past projects Step 2: Assess Impact & Influence Not all stakeholders matter equally. Plot them on an Impact/Influence Matrix. Step 3: Understand Needs and Concerns Data is your ally. Collect both facts and feelings. → Run surveys → Conduct interviews → Hold focus groups Step 4: Prioritize Stakeholders Use the ABCD model to focus your energy: A → High Influence, High Impact B → High Influence, Low Impact C → Low Influence, High Impact D → Low Influence, Low Impact Managing Stakeholders in Practice 1/ Identification ↳ Build a stakeholder register. ↳ Capture their role, influence, and level of interest. 2/ Analysis ↳ Plot them on the Power–Interest Grid. ↳ Use colors, quadrants, and visuals to see patterns quickly. 3/ Engagement Plan ↳ Tailor your approach. ↳ Decide how often, how deeply, and through which channels you’ll engage. 4/ Participation ↳ Bring them into the process. ↳ Offer clear opportunities to share, challenge, and co-create. -- Follow me, Daniel Lock, for practical tips for leading change, consulting & thought leadership.

Most evaluation methods are designed to measure what we planned for. But in complex systems, the most important changes are often the ones nobody anticipated. This brilliant How-To Sheet on Ripple Effects Mapping (REM) is part of the 360 Systems Guide by UNDP Food Systems. It's a a practical, end-to-end resource. I'm a long-standing advocate for REM and this guide captures why it's so valuable. It provides a clear introduction to the four core elements (appreciative inquiry, participatory approaches, interactive storytelling, and mind mapping) and how they work together to surface relational, behavioural, and cultural change that logframe metrics will never catch. There's a readiness checklist to help teams assess whether REM is the right approach for their initiative, covering programme scope, stakeholder engagement, types of outcomes, and practical requirements. It includes a step-by-step facilitation template, including paired appreciative inquiry interviews, a collaborative ripple mapping session, and group reflection, with probing questions like then what happened?, who else was affected?, and how have relationships or community conditions changed? Finally there's a coding and reporting template to convert the visual ripple map into structured data, enabling both qualitative and quantitative analysis, and making findings usable in grant proposals, strategy sessions, and community reporting. REM works best once early change is visible, but not yet fully understood. It's a tool for making sense of emergence not for proving a predetermined theory.

Participatory Evaluation and Research Participatory research and evaluation (PR&E) shifts the traditional power dynamic of inquiry by treating "subjects" as co-researchers. Rather than conducting research on a community, it is conducted with them to ensure the findings lead to direct social action or organizational improvement. ## Core Principles of Participatory Approaches The foundation of this methodology is the belief that those experiencing a reality are the best equipped to analyze it. * Shared Ownership: Stakeholders are involved in every stage, from designing the evaluation questions to data collection and analysis. * Capacity Building: The process is designed to leave participants with new skills, such as interviewing techniques or data literacy. * Action-Orientation: The primary goal is not just "knowledge for knowledge's sake," but using evidence to solve local problems or influence policy. * Democratization of Knowledge: It validates "lay knowledge" or lived experience as being just as significant as academic or "expert" data. ## Common Methodologies PR&E often utilizes qualitative or mixed-methods approaches that facilitate group dialogue and collective reflection. (See attached) ## The Participatory Evaluation Matrix When designing a participatory framework, the following matrix helps define the level of engagement: * Design Phase: Do stakeholders help define what "success" looks like? * Data Phase: Are community members trained as enumerators or peer interviewers? * Analysis Phase: Do participants help interpret the results to ensure they aren't being misrepresented by external evaluators? * Dissemination Phase: Are findings shared in accessible formats (town halls, radio, infographics) rather than just technical reports? ## Key Challenges to Consider While empowering, these methods require significant time and ethical rigor: * Power Imbalances: Dominant voices within a group may silence marginalized members during participatory sessions. * Time Intensity: Building trust and consensus takes much longer than standard survey-based evaluations. * Objectivity vs. Subjectivity: Critics often question the "bias" of participatory data, though proponents argue that all research has inherent bias and PR&E is simply more transparent about it.