Sales and Operations Planning: Are Executives Killing Collaboration?

killing Sales and Operations Planning: Are Executives Killing Collaboration? Why do some executives feel inclined to make substantial forecast changes based solely on their own judgment? There’s no doubt the typical executive has keen insights into the business she directs. Yet, when that executive chooses to override other inputs, she undermines the integrity of the collaborative process.

“Why should I put any effort into creating a forecast when I know he will change it anyway?” This quote came from a client with whom I worked. The clear message was that their company’s collaborative forecasting process was not supported by the senior executive who had the final say in what the “consensus” plan would be. His actions unintentionally conveyed a message that the Sales and Operations Planning process which led to his desk had little merit in his eyes. The prevailing sentiment shared by S&OP participants was that their work was unimportant.

Opportunity lost! Executives must understand that S&OP can be successful only when they are engaged and supportive. Trumping the collaborative output sends a demoralizing signal. Empowered participants deliver superior results.

An effective S&OP process leverages inputs from across functional disciplines and at various levels of responsibility. Most decisions should be made prior to the Executive S&OP meeting. Executives should focus on setting policy, reviewing lower level decisions, breaking ties and making critical, strategic decisions.

Don’t kill collaboration. Empower participants and achieve better results.

By the way…the executive who applied his own final forecast values achieved forecast accuracy levels worse than if they had used the statistical forecast alone. Lots of analysis and meetings with nothing to show for it!

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