Does your S&OP or IBP process need a reboot?
Have you ever looked around and wondered if your S&OP or IBP process is delivering as expected? Is it becoming a bit stale and need some reinvigoration? Or may be you are even questioning whether or not you need it?
Some pruning may be needed, but pause for thought before stopping it completely. Some simple questions may help you re-invigorate the process and get secure the financial gains you were looking for.
By the way, if you are wondering what is the difference between S&OP and IBP this article might help:
So what is the difference between S&OP and IBP? - and does it matter?
For the rest of this article we shall refer to them both as IBP.
Let’s take Sinek’s Golden Circle Method of “Why – How – What” approach to reinvigorating the IBP process. Indeed, I believe many failed IBP implementations have their root causes in too much focus on what IBP is, some on how it is executed, and too little on why it is needed. Some ideas to think about.
Are you aligned on "The Why"?
It may well be that the “What?” has come to dominate the “Why?”. Do people understand that you have an IBP process to enable the execution of strategy? Challenge yourself with the following.
- Does the business have clear objectives?
- Are the same objectives clearly understood by everyone across the business?
- Is your IBP process designed to monitor progress against achieving these objectives – and does it enable decision making to help secure these objectives?
When was the last time anyone started a review meeting on “Why are we doing this”? Try it and listen carefully for the answers. Do not be surprised if the expected clarity and alignment is not there!
So if there is no clarity, it is possible that a strategy refresh would be helpful – or at least major effort in communicating your strategy framework including objectives. Have a look at the following articles for some more pointers;
IBP is designed to support the execution of strategy, but if the nested triads of
- Objective
- Bottleneck to achieving the objective
- Strategy to overcome the bottleneck
are not clear then do not expect the IBP process to deliver.
Without clarity on “The Why” expect the slide decks to bloat as more and more data is collected, KPI dashboards expand, all in the hope of catching the magic metric to success. Teams will drown in analysis paralysis before meetings, lose focus during reviews and may well try corrective action on KPIs that will not impact on results.
And of course, if there is clarity on “The Why” brains are primed for change.
Is it "The How"?
- Culture
Think of culture has “how things get done around here”. Culture and change management are very often vastly under-estimated issues. Successful IBP requires a strong focus on collaboration, transparency and accountability across the organisation. Discussion is needed, but decision making is essential.
Are you, as a leader, consistently demonstrating these behaviours to drive a successful IBP process? Are you prioritising time to be present and proactive at meetings – or are you letting other issues dictate your schedule. Your team will see these choices made and act accordingly.
Do you have an IBP leader tasked to address cultural barriers to success with skills in influence management to clear roadblocks to change and motivate buy-in?
All initiatives require change management. More insights on the article;
- Meeting Management
- Is key meeting material shared with participants in good time?
- Do meetings start and end of time?
- Is the agenda clear?
- Do decisions follow discussions?
- Are all participants contributing to the decision making process? If not why are attendees present?
- Is there a real effort to limit the number of charts to help concentrate on decisions – and send information charts to back up?
- Are charts effective visualisations quickly enabling shared understanding? Or a “sea of numbers” pasted from Excel?
- Are people held accountable to deliver on follow up actions?
- Is there a team reflection process to drive continuous improvement?
- Approach to data
Having “One Set of Numbers” is a pre-requisite for success. Nevertheless there are limits to data quality.
A quest for perfect accuracy in forecasts, models and scenarios, rather the aiming to be “roughly right”, can have negative impacts on decisions. As well as the opportunity cost associated with the hours of excessively complicated forecasting approaches and model building, the team may “loose sight of the forest for the trees”. The key drivers, or x’s, that can be managed to drive change may have importance diluted as they are combined with the multiple other factors that have limited impact on results. The wisdom to insist on a “good enough” approach is key – after all who can really forecast the future?
- Capability
Hopefully time and money was invested during the implementation of IBP to ensure that your people were trained in the needed skills. Nevertheless, bad habits emerge over time, and the make up of the organisation changes. Are new members learning from good habits or bad? Would the team benefit from some refresher training on how to execute the process (as well as a reminder on the why)?
Is it "the What?
- Using the wrong tool for the job.
IBP is a planning process focussed on the 24 month planning horizon. At least 70%, if not more, of the process should be looking at the 4 month plus planning horizon.
IBP does not have the right process, cadence or participants to focus on short term execution decision making. That is the role of S&OE – sales and operations execution.
By force-fitting too much execution decision making into IBP the organisation loses twice:
- The wrong process for short term execution
- Inadequate time to decision making over the 24 month horizon.
It may get things done – but the wrong process might be the most efficient route to delivering decisions. As described in this article there might be more important levers than working on the process alone.
Mark Blackwell
Mark Blackwell is the founder of Arkaro, a consultancy that helps organisations develop and implement practical, effective strategies. Unlike traditional consultants who ‘do it for you’, Arkaro works alongside clients to build lasting strategic capabilities.
Arkaro
Arkaro is a consultancy specialising in Strategy, Innovation Process, Product Management, Commercial Excellence & Business Development, and Integrated Business Management. With industry expertise across Agriculture, Food, and Chemicals, Arkaro’s team combines practical business experience with formal consultancy training to deliver impactful solutions.
You may have the ability to lead these transformations with your team but time constraints can often be a challenge. Arkaro takes a collaborative ‘do it with you’ approach, working closely with clients to leave behind sustainable, value-generating solutions—not just a slide deck.
