My journey with IBP began on Halloween in 2013. A day to remember as that was the day of the first MBR workshop with the leadership team and it was a day full of challenges, contention, and even hope.
Oliver Wight consultants did their best to keep this group together while being challenged from every imaginable angle but never faltering from the barrage of questions thrown at them like cannons in a war zone. With much of the tension centered around trust, alignment, behaviors that would need to change for a fully functioning IBP process, and after much deliberation the leadership team collectively agreed to take on the challenge.
In addition to education and workshops, the organization had to modify systems to facilitate 3 years of data and developing the capability to obtain the right level of information at the right time, as well as moving from a finance owned demand process to a sales and marketing owned process.
We were never short on issues; technical, capability, and behavioral challenges that all had to be resolved. Some easy, some difficult, and Just when I think I have encountered every failure mode possible a new surprise finds me just around the corner, I now have quite a list of lessons learned. Leading this type of change in an organization isn’t easy as you began to bring visibility to issues that have long been hidden and not all discoveries are well received.
After a long journey the process today still has challenges but it also has many successes and the process is completely embedded within the organization as simply how the business works. A few of my lesson learned points to consider before beginning the implementation of IBP:
- In order to establish an effective IBP process, the business needs to have some primary goals over the longer horizon. If you don’t know where you are going then IBP will not help you get there. Without these business ambitions clearly defined, either growth or profitability then your IBP process will likely only focus on the short-term horizon. Too often I see businesses use their IBP process to manage their short-term budgets leaving the more aspirational elements of the business to fall outside of the process.
- The people the business selects as the chair and facilitator are significant factors in the success of IBP and this needs to be accomplished thoughtfully. The Chair is ultimately accountable for the performance and output of the review and the facilitator’s role is a critical position for ensuring the right conversations in each step of the review are prepared. Think about the facilitator as being your 2nd in command, the person that has enough experience in the organization that can synthesize the different inputs and develops an agenda with critical impacts for discussion identified and possible solutions.
- The structure of the IBP process must align with how the business is wired unless you plan on rewiring the business, which most businesses don’t. What this means is that your financial forecast process must integrate with the IBP process. The business financial Profit and Loss and balance sheet must be able to be derived from IBP. If this is not integrated then the key business decisions for the organization will typically not be made in the IBP process but outside it and IBP will appear to be more tactical and used for information sharing and many may lose interest or become frustrated.
Implementing IBP in an organization is a challenging experience that can be both alienating and rewarding. Those that are on this journey, I hope my experiences will make your path easier. Check back frequently for more information or contact me directly if you have specific questions. Thanks for reading.
