{"id":10225,"date":"2023-12-11T05:41:13","date_gmt":"2023-12-11T10:41:13","guid":{"rendered":"https:\/\/demand-planning.com\/?p=10225"},"modified":"2023-12-11T05:55:38","modified_gmt":"2023-12-11T10:55:38","slug":"orchestrating-consensus-with-tension","status":"publish","type":"post","link":"https:\/\/demand-planning.com\/2023\/12\/11\/orchestrating-consensus-with-tension\/","title":{"rendered":"Orchestrating Consensus with Tension"},"content":{"rendered":"
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I recently read Bob Stahl\u2019s newest book, Sales and Operations Planning \u2013 An Executive Update<\/em><\/a>, and I came away with a different perspective on a long-time problem; how to get consensus on a challenging forecast.\u00a0\u00a0<\/strong><\/p>\n

Over the course of my long career, I have been part of, or facilitated, more than a thousand consensus meetings. And while most of these sessions generated little to no organizational tension, there have been times when it has been particularly difficult getting different parties (Sales, Marketing, Finance) to agree on a forecast. Under normal circumstances, early in the year and new product forecasts tend to cause the most tension because of the significant commercial ambitions loaded into these plans.<\/p>\n

However, even these plans are often malleable with sufficient supporting data and conversation. The most difficult consensus challenges are always those forecasts that are most speculative, with little supporting data or with the greatest uncertainty.<\/p>\n

Finding Consensus During Demand Chaos<\/h2>\n

COVID created forecasting chaos for many organizations. Tension increased during consensus meetings, especially during the early phases of the pandemic when, as an example, the fortunes of different product families were trending in opposite directions. Demand felt out of control.<\/p>\n

“It was as if the pandemic froze us into inaction.”<\/p><\/blockquote>\n

The once-in-a-lifetime disruption confronting all of us made it hard to arrive at a forecast that everyone could agree on, despite having considerable supporting data. And for those product families for which orders and POS activity were down, arriving at consensus often seemed more difficult. No one wanted to \u201cgive-up\u201d on the forecast so early in the year \u2013 especially given the unknown nature of consumer behavior in disruptive times. It was as if the pandemic froze us into inaction.<\/p>\n

How I Handled Disagreements During COVID & What I’d Do Differently<\/h2>\n

When I was faced with the inability to arrive at consensus for many of the declining categories, I found myself proposing a simple approach that short-armed the forecast. I suggested looking at only at the next two to three months\u2014acknowledging the reality of a short-term decline\u2013while also holding the outermost forecast range to prior expectations.<\/p>\n

We then provided a growth ramp back to the original forecast. It was a cheat of sorts. We did not \u201cput the moose on the table\u201d as Bob Stahl might have suggested but the short arming allowed us to move forward, effectively kicking the can down the road to the next month when better or more confirming information might be available.<\/p>\n

While this tactic felt right in the moment<\/em>, it also tossed out the window some time-honored S&OP concepts regarding managing the depth of horizon of a forecast. And while it is hard to call this approach a mistake, as we were in dark and unknown waters at the time, in hindsight it would have been better to press the issue more\u2014to lean less on the crutch of uncertainty and rather push each member of the consensus group for their best (in this case, lowest) call.<\/p>\n

“Start with a plan that everyone can roughly agree on, and then further challenge the assumptions.”<\/p><\/blockquote>\n

Instead, we did not so much collaborate on a plan<\/em>; it was more like we ducked for cover<\/em>. Which brings me to Bob\u2019s book, in which he makes a pragmatic point that really resonated with me: Start with a plan that everyone can roughly agree on, and then further challenge the assumptions of that plan to get further clarity.<\/p>\n

The ‘Greatest Common Denominator\u201d Approach to Planning<\/h2>\n

Think of this as almost a \u201cgreatest common denominator\u201d approach to planning. Effectively, the consensus facilitator starts by asking everyone their estimate and supporting data before trying to seek agreement. For example, in the face of double-digit declines ask, \u201cDoes everyone agree the forecast should come down for the year ?\u201d Then follow that up by asking, \u201cBy how much, and how would you pace the decline?\u201d By asking relatively open ended questions all voices and opinions are heard, and the range of perceived opportunities are dimensioned.<\/p>\n

After reading Bob\u2019s book, it became apparent to me that by putting in a short arm \u201cdevice\u201d we avoided much in the way of thoughtful conversation. We did not seek common ground. I know this because nearly everyone walked out of the consensus meeting thinking that the forecast should have been lower. We did not reach consensus \u2013 we only postponed the hard decision by four or five months when we finally made the hard calls needed to reset the forecast lower.<\/p>\n

Some Conflict is Normal is S&OP – Embrace It<\/h2>\n

Most long-term S&OP<\/a> practitioners know all too well that at least some level of tension, conflict, and disagreement are normal in consensus meetings. In fact, some disagreement within the S&OP<\/a> process is to be expected and perhaps even encouraged. No one wants an S&OP<\/a> plan put together via groupthink and without some rigor of organizational tension applied. Unfortunately, in the midst of COVID, we avoided this tension.<\/p>\n

“No one wants an S&OP<\/a> plan put together via groupthink.”<\/p><\/blockquote>\n

One of the most important lessons to come out of the COVID crisis (and Bob\u2019s book) is to solicit more opinions and points of view as a way to put more voices into the forecasting process before trying to arrive at an agreed number. Let the opinions of the consensus team come out and bloom to see if there is a unifying or common perspective before trying to narrow the forecast. Disagreements over outcomes earlier in the pandemic would have helped avoid \u201cchasing the forecast down\u201d phenomena that ultimately occurred.<\/p>\n

If history offers a lesson, avoiding tension is, well, wrong. If we believe disruption will become more common place, this is a lesson worth learning.<\/p>\n

 <\/p>\n

To get up to speed with the fundamentals of S&OP and IBP, join IBF for our 2- or 3-day Boot Camp in Miami, from Feb 6-8. You’ll receive training in best practices from leading experts, designed to make these processes a reality in your organization. Super Early Bird Pricing is open now. Details and registration<\/a>.<\/strong><\/p>\n

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I recently read Bob Stahl\u2019s newest book, Sales and Operations Planning \u2013 An Executive Update, and I came away with a different perspective on a long-time problem; how to get consensus on a challenging forecast.\u00a0\u00a0 Over the course of my long career, I have been part of, or facilitated, more than a thousand consensus meetings. […]<\/p>\n","protected":false},"author":4866,"featured_media":10229,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[377,359,381],"tags":[244,37],"class_list":{"0":"post-10225","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-organization","8":"category-people","9":"category-sop-process","10":"tag-consensus","11":"tag-sop"},"_links":{"self":[{"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/posts\/10225"}],"collection":[{"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/users\/4866"}],"replies":[{"embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/comments?post=10225"}],"version-history":[{"count":10,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/posts\/10225\/revisions"}],"predecessor-version":[{"id":10237,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/posts\/10225\/revisions\/10237"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/media\/10229"}],"wp:attachment":[{"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/media?parent=10225"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/categories?post=10225"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/tags?post=10225"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}