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How Danone became a global top performer with Integrated Business Planning
21 November 2018
Written by Alice Barrett
On 25th September, Oliver Wight hosted ‘IBP: Why Effective Leadership is Critical to Success’ – a conversation with two guests from Danone Early Life Nutrition, Willemijn Potjer Head of Global Supply Chain Capabilities, and Mustapha Ezzeddine, Commercial Lead. In discussion with Oliver Wight associates Debbie Bowen-Heaton and Flavio Pietrocola, Potjer and Ezzeddine revealed how Oliver Wight’s Integrated Business Planning programme transformed Danone into a global top performer.
Q. What does it take for IBP to be a success?
Potjer: For IBP to succeed, the process needs to have certain characteristics. Firstly, the process must be led by the Executive Team – or whoever is at the top of your organisation. Secondly, the Executive Team needs to be properly educated about the ins and outs of the process. And lastly, the leadership needs take responsibility and accountability for the process as a whole – it needs to have its eyes wide open as it goes on the journey.
Q. What are the IBP implementation pitfalls businesses should avoid?
Ezzeddine: Delegation is a definite ‘no-no’. Often, it’s the Supply Chain Team which suffers the most from a lack of an IBP process, which means that it’s often the Supply Chain Team who start the conversation about implementing it. However, this doesn’t mean Supply Chain should own the process – it’s the opposite. If IBP is seen as a supply chain process, it will fail. The process needs to run the whole business. Another common pitfall is when there is a lack of education and enthusiasm for the process, especially from the leadership.
Q. How long does it take to stabilise the process or achieve a capable process?
Potjer: When you’re initially planning and rolling out the process, we suggest designing the process quickly and ‘ugly’, and evolving it over time by identifying the gaps. Organisations learn by improving every cycle, identifying what works well and what doesn’t, and this is all part of continuous improvement behaviour. Even in the most complex businesses, where you need to plan on a local and global scale, designing IBP doesn’t take long – usually no more than three to five months. Full implementation generally takes longer; 12-18 months for non-complex businesses, and several years for larger organisations.
Q. Describe the improvement journey you have made in Danone over the last two to three years, both globally and locally.
Potjer: The reason for implementing IBP was to get a new financial view on reporting, as well as on strategy planning. We wanted to replace very heavy financial planning with rolling horizons to increase efficiency, and to make it easier to steer the business via the monthly touch points. Ezzeddine: Danone was experiencing a more volatile and dynamic market, so we needed a tool to which would enable us to react more quickly and proactively plan for future expectations. We worked with a very big cross-functional team and designed the IBP process as a group. We built it up from the local sales units, all the way to global consolidation. From a local perspective, we were driven by a pure business need to have a very strong process - the business required a kickstart. IBP helped us handle the business with more confidence and gave us one set of figures to assess the entire business situation. We wanted to know how we could deal with the future, and that wouldn’t have been possible without the strong backbone of IBP.
Q. What benefits have you gained from the IBP process?
Ezzeddine: From a global perspective, the financial benefits have been fantastic. The financial outlook is more transparent, which means we can identify future risks, opportunities and close the gaps. ----------- What our listeners thought: What’s your no.1 benefit derived from IBP? • Business growth – 23% • Increased profit – 15% • Reduction in costs – 15% • We haven’t financialised the benefits yet – 48%
Q. What are the pre-requisites to success?
Potjer: The person who owns the process must be enthusiastic, motivated and committed and the business must have a dedicated IBP leader who can balance the responsibility of leading the process, with the pressures of his/her day-role. Ezzeddine: Also, people need to understand the ‘why’ and have a clear objective that is consistent throughout the organisation, as well as having the correct balance of people, process and tools.
Q. What is the role of the Leadership Team in your process?
Ezzeddine: The Leadership Team should always focus on the future. People like to dwell on the past and analyse the present, they need to concentrate on the future to successfully deliver the vision and goals of the business. Potjer: The Leadership Team also need to lead by example. At Danone, we have a VP who is very involved in IBP and strongly believes that it is critical to Danone’s success. If the Leadership Team don’t own and oversee the process, decisions that are made by less senior employees end up being dissected and discussed at executive level, which takes up valuable time. There needs to be a culture which enables executives to always make the decision at the top, and then distribute down throughout the business. ------------ What our listeners thought: Who owns IBP in your business? • CEO – 21% • Head of SC – 27% • Head of Finance – 0% • IBP Leader – 36% • None – 15%
Q. Any tips for IBP Leaders/ people thinking of embarking on the journey?
Potjer: This is not an ‘all-star’ role where you can go in and change the world by yourself – an effective IBP Leader is someone who can create a community and a network of people around you who can relay vital messages back to their teams – sales & marketing, finance, supply chain etc.
Q. How can we improve collaboration/trust in the organisation and how do we drive and demonstrate this?
Potjer: There are metrics to demonstrate that we trust each other. Where trust does not exist, people are either over optimistic or too conservative. Trust grows when cross-functional teams begin to work together and they have one aligned view. It is important to talk to each other, understand each other and gain the trust to challenge each other.
Q. What’s next for IBP at Danone?
Ezzeddine: Integrating the customer view – we realise that the customer is key and the next step is to incorporate this thinking into the backbone of the process. We also want to learn how to measure our success - how do we know we’re successful and sustainable? Potjer: Also, consistently assessing people’s knowledge around the process is another key goal, as well as extending our curriculum of e-learning, IBP on campus and training sessions in each country. One of the biggest challenges you might face in an IBP rollout is the maintenance post-rollout, especially when you have a rotation of key people supporting the process. We want to continue to pass the baton and continuously educate people, so they are strongly convinced about the benefits IBP can bring.