Consumer Business: Invest in strategy AND achieve short term goals

2 February 2012

Dan Hawker

Dan Hawker

Former Head of Tobacco, Wholesale & Retail

How do you decide what to invest in today, with everything that's happening out there?

I have a client in Consumer Business who is experiencing the same challenges as all Consumer Businesses right now - intense competition, tightening consumer wallets, and all the rest of it. They are continuing to invest in process improvement, but having to choose their investments wisely and monitor them carefully. They are navigating their way through the tough times.

One strategic initiative in which this client is continuing to invest is Integrated Business Planning (I recommend Enterprise Sales and Operations Planning by Palmatier for a good overview of the concepts). It knows it can improve its processes to help Sales, Brands and Supply collaborate more effectively, and it has the courage (and business case) to commit to the strategic investment in the face of immense short term trading pressures.

Having gone live with phase 1 of this programme, I heard a very encouraging comment the other day that made me feel proud. Proud that we helped them maintain their conviction, that they had the courage to approach things differently, and that they stuck through the challenges - at some times seemingly show-stopping - to see it through. Hopefully they feel that they invested wisely.

How do you know if you've invested wisely?

So what was the comment I heard? Well...that there were no meeting rooms available that day because they were all taken up by meetings between Brands and Sales.

What this means is, there are a large number of meetings in a new monthly process that didn't happen in the same way last month, or the month before. Discussions on how to best drive demand in the market place, and how to best satisfy that demand. Discussions that surfaced conflicts in the Trade Promotions calendar that will now be resolved. Discussions that will lead to further discussions with the supply organisation on how best to align. Discussions that are aiming to satisfy all of the customers all of the time, with the limited resources available.

No doubt some of the discussions were 'animated'. I imagine that in at least one of them, somebody asked "why didn't we do this earlier?" (the answer, of course, is because there's only so much time available, and if you put up process and system barriers to doing the right thing, there are always other "right things" that need to be done).

I'm pleased for you, but what if Integrated Business Planning is not on our agenda? How is this relevant to me?

This blog isn't really about Integrated Business Planning. It's about how the current pressure on short term results creates risks on pretty much all of your strategic projects, so how do you identify which are worth focusing on.

If you're in Consumer Business, you're no doubt facing the same short term trading pressures that make all but the fastest business case a non-starter. Not least because the ability to engage the business in making any initiative a success is severely compromised as they focus on the short- to medium- term goals. Make sure this month's numbers happen, don't worry about next year's numbers.

As it happens, Integrated Business Planning probably should be on your agenda. It might already be there, under a different name (Big S&OP anyone? Demand Planning? Commercial Forecasting? All parts of the same thing).

But even if IBP isn't on your agenda it's worth taking the time to identify one or two key strategic initiatives that are worth pushing through, even in the current climate. Just check for the vital signs in amongst the noise.

So what are the vital signs on the initiatives that are worth focusing my - and my colleagues' - limited attention on?

As an example, at a relatively late milestone in the project I'm using as an example, business engagement was flagged as a risk - "there's too much going on, and we don't have the people to help you out". Process definition was fine, solution build was fine, but without engaged users, you've just got a car without a driver - doesn't matter if it's an Aston Martin, it still won't go anywhere.

But in amongst the business pressures, the right people stepped up and made it happen - in this case, people that bridged between IT and the business. And now we have a situation where the business is so engaged, you can't find a meeting room for people running activities within the new process, and we have enhancement requests coming out of our ears - particularly around intelligence out (reporting).

Business engagement can happen, if you have the right people involved, and a clear rationale for completing the project.

So, if you're worried that the current pressures are forcing short term decisions at the risk of the long term future, you're probably right to be worried. And this is what you should do:

  1. Look hard at your current portfolio of projects - does each of them have a clear business case? The ones that don't, need to be looked at again.
  2. If the business case is missing, don't throw the project out immediately. Use the wealth of benchmarking and business case building tools out there to see if there is one. For example, SAP's VLM service.
  3. If the business case takes longer than a year to pay back, look hard at it, but again, don't put it on the backburner immediately. Look at the rationale for the project. Is there a deeper narrative at play that means it's worth prioritising above shorter paybacks? If there's a really clear Vision that your people can line up behind, the project can not only deliver its business case, but can re-energise a business around its short term goals, as well as a more strategic one
  4. Make sure the right people are on the bus. Look at your project managers, your key business resources, and your IT partners. Which of these is really going to make it happen? There are probably one or two key people who always make it work, no matter what happens. You know who they are. They have great relationships with the business, a track record in your business of getting things done, and a knack for persuading people to get with the programme. If you can't name those people, then your project is going to struggle to get airtime within the business at the present time.
  5. Have courage. It's going to take an extraordinary amount of conviction and persistence to push anything through at the moment. But if you have a goal that you really believe in, and the knowledge that you've got the right people to achieve it, you WILL make that goal a reality.

In the words of Henry Ford:

"If you think you can do a thing or think you can't do a thing, you're right."

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