Why deploying Integrated Business Planning is so hard..

Conceptually, integrated business planning isn’t complicated to discern and as a result, many organizations readily take on this journey of enlightenment. This prospective planned utopia of enlightenment that provide a regular cadence for aligning plans between our product portfolio, commercial demand and supply chain that enables business leadership to orchestrate the necessary business decisions for the achievement of strategic growth over the long horizon.  How hard can it be, right?  Unfortunately, for those that have led an organization through such a journey, it is by far one of the most challenging roles to undertake and definitely not for the faint of heart.  Having survived such a journey and have come out the other side, I am frequently asked why implementation is so difficult.  It is a simple question, but one that is difficult to answer with a concise explanation.   Often you will hear others talk about the challenges of incapable processes, like demand planning or ability to understand capacity constraints, or lack of aggregate supply planning or inability to align sales and marketing to a statistical forecast and the list can go on for days and they would all be correct responses but one aspect that is often overlooked or at least not frequently talked about, which is the most fundamental, and that is the organization culture.  And that starts with Leadership.

Recently I was asked what it was like being an IBP Leader during a deployment and I explained it like this.  Imagine an organization has been convinced that being vegan was going to be good for business.  Consultants have come in and highlighted all the business benefits of being vegan and readily the entire leadership team affirms their commitment.  To facilitate this journey the business brings in a vegan leader to deploy all the concepts of being vegan and help coach the organization on this journey.  During the leadership session in preparation for the first management business review the vegan leader presents the plans and the leadership team readily accepts the direction with overwhelming support and the business leader openly declares their support.  It all feels good.  Then the business leader sits down and says, ‘I am fully on board with being vegan, however for us to make it work in this business we must have bacon and eggs for breakfast every day.”  Another member of the team chimes in with, “and ice cream.  we definitely need to have ice cream and not that fake milk kind.” And another proclaims the need for steak on Fridays and another wants fish to be an exception.  As the vegan leader, you desperately try to explain the rules and requirements of being vegan and again you are met with the response of yes, we want all the value of being vegan as you describe but for our business, we need these exceptions.  Once again, you explain that any compromise with these rules then the value associated with being vegan will deteriorate.  After the meeting, feeling disheartened, your manager then delivers the message that the leadership team is concerned with your ability to think outside the box in being creative with making this work for the business.

Contextualizing this with real business acumen, it transpires like this:  The business leader fully articulates support for IBP and is convinced on the value it can bring to the business, but then says, “I know IBP is about the longer horizon, but this business isn’t capable of predicting next month, never mind 3 years out.  So, before we start the longer term, we need to demonstrate that we can accurately predict next month.”  Finance then chimes in with, “I know you talk about these bottom-up plans to drive the IBP numbers for the financial forecast, but there really is no reason for all that work as I can more accurately develop a top-level forecast.” Another leadership member adds, “I know you want to talk about gap closing to our strategic plan, but that really isn’t necessary because we change that every year and we will have those discussions once a year in another forum.”  And supply chain, not to be outdone by the other functions provides their insight by suggesting that all the business really needs is a better forecast.

Changing a culture is hard.  And if the senior leaders only superficially embrace the behavior changes required then deploying IBP will feel like pushing an elephant up a hill, and that is what it is like.