Many people will probably agree that are short-term advantages of running one’s own processes within a business function without too much interference from the others: you can plan things exactly how you want, and it is faster as you don’t have to spend time listening and aligning priorities or opinions with others. You make your plan, communicate it, and only align in case major differences are spotted. And that is another thing. In many cases, it can be difficult to spot differences if plans are done in different dimensions, volume versus value and SKUs versus brand, customers or profit centres.
Many organisations run like that, let’s be honest. Of course, there is coordination, but in reality, plans are not well-aligned, especially when it comes to integrating tactical planning all the way through Marketing, Sales, Supply Chain and Finance. Even if plans are communicated, it’s typically through a waterfall approach where information is passed on to the next department, but without a real feedback loop, and without working holistically to find the best way forward.
Three major obstacles to change
To sum it up, turning one’s old S&OP process into Integrated Business Planning (whereby tactical plans across portfolio, customers, production resources are aligned and calibrated against shared business targets) is not an easy transformation, and companies will typically find themselves struggling in at least three areas:
Collaboration requires people to behave differently
Although resistance to change is a natural human instinct, most people that start to work with IBP eventually realise that the collaborative aspect of joint planning is in fact a game-changer when you finally start to reconcile your product, demand and supply review in a monthly drumbeat – and when you come together across functions to prepare scenarios and recommend decisions to the executive team.
Of course, all of this can’t be done without the leaders of the organisation walk the talk, role modelling the commitment from the top. In this sense, leaders (and the executive team in particular) have a huge role to play in developing and communicating an IBP vision in a compelling way, while also demonstrating commitment to realising the vision, as well as identifying their own gaps in behaviour and capabilities in order to pave the way for change.
At the end of the day, organisations don’t change unless individuals do. No matter how incremental or radical a transformation the organisation is taking on, the success of any initiative ultimately lies with leaders and employees behaving differently, embedding new behaviours and telling the stories that inspire a cultural change.
Four ways to get started
Working every day with my Deloitte colleagues to help our clients implement IBP, I’ve seen organisations approach business transformation in many different ways: from progressive leadership to old-fashioned hierarchies, from behaviour-driven to IT-driven transformation, from working broadly with IBP to starting with just a few elements and working from there.
Across these different approaches and circumstances, however, here are three ways to think about change and how to embrace IBP in 2023:
And finally, creating sustainable change also means having the right reinforcement mechanisms in the organisation and feeding appropriate assessment criteria into the performance management process to hold departments accountable for their results. For some, this might sound old-fashioned in a modern, purpose-driven organisation, but all experience shows that true cross-functional collaboration is so hard to achieve, so at least we should reward those that actually foster teamwork, knowledge-sharing and transparency – and ultimately are ready to sacrifice their own agenda to see the whole organisation succeed.