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Reflections on 30 years of driving business improvements with Oliver Wight: Part 2
1 June 2020
By Oliver Wight Partner, Andrew Purton
In part one of this blog series I reflected on working with a diverse range of clients and shared my thoughts on the differences between the challenges businesses are facing today and those experienced 30 years ago. In part two I answer more of the questions I am most commonly asked about changes in the world of business and explore Oliver Wight’s ability to adapt in order to help our clients combat ever-evolving obstacles.
What are the biggest changes you have seen in the world of business over the years?
Initially, clients tended to be semi-autonomous accountable businesses within a corporation or division, often organised geographically. Each would have control over all business disciplines: technical/ design, commercial, operations, and finance, etc., usually with significant influence over strategy. Our focus was on integrating the planning and execution practices for that entity across all above-mentioned disciplines. We would run an MRPII programme for an accountable business unit and there could be multiple of these within a division of a corporation.
Over the past 25 years, companies have become more regional and now global, separating the appropriate reporting accountabilities of their technical vs commercial vs operating units and thereby creating a ‘matrix’ organisation. Our focus today is on facilitating the clients to design business management processes and practices that enable that matrix organisation to operate effectively as an integrated business, in support of the organisational operating model. We also work with clients that are additionally developing a more integrated end-to-end value chain focus, some elements of which they own, and others they don’t but nonetheless seek to manage the entire value chain as an integrated entity.
The speed of change is also very different today, businesses must be more agile and more focused on global events that could affect their whole business, not just the operations. To this end, there is a greater need to get clients to identify and formally manage their business-driving assumptions and, specifically manage the implications when those assumptions change. This assumptions-management process becomes the common set of assumptions for all planning processes whether that’s strategic planning, rolling Integrated Business Planning, or periodic business plans, and enables a much longer-term view of the business.
How has Oliver Wight adapted to help organisation tackle these challenges?
Throughout the past 50 years Oliver Wight have been thought leaders in integrated planning and business management practices. Our message is not academic and theoretical but founded on captured learnings and real experiences from working directly with clients actively engaged in transformation programmes. We have constantly evolved the scope and content of our offering to ensure it reflects current best-practice based on what we know truly works.
30 years ago, the excitement to find improvements in integrated planning tended to come from supply-based professionals, operating within the world of manufacturing and supplier planning, trying to enable effective MRP systems. It took some time to get the commercial side of the business engaged and excited, but demand management practices evolved. Sales and Operations Planning positioned the crucial importance of their role in integrated planning, and those companies that ‘got it’ - enabling commercial leadership of the planning process - certainly reaped the benefits. ‘Rough cut’ financialisation of the demand and supply plans enabled financial projections to be generated directly from demand and supply plans with the elimination of parallel financial forecasting and budgeting processes.
In the 1990s, with the onset of the significant drive for innovation and new products to fuel growth, it became clear that new product introduction and ultimately all elements of product portfolio management needed to be integrated. By the late 1990s there was a clear integrated planning process comprising product, demand, supply and financial planning. This rolling business management process was re-branded as Integrated Business Planning (as S&OP, in many companies, remained a short term, volumes only, operational planning process operated by supply chain personnel). The focus was typically a 24 month/two-year horizon (today the norm is 36 months), underpinned by assumption management and scenario planning, and with an emphasis on gap-closing vs financial commitments and/ or optimising financial performance of the business. The next step was to integrate with strategic planning and position IBP as the strategy deployment process, testing if strategic programmes and actions were included in the rolling IBP plans, and managing gaps appropriately.
Our method of delivering education and workshops has fundamentally changed over the years too as indicated in my last blog. In the 1980 and 90s we used acetate slides, displayed using two ‘overhead projectors’, accompanied by two flip charts. Presentation skills were key, juggling the acetates between the projectors while writing on them to enhance the messages and elaborating on the flip charts – it was a real stage performance! During this time, our method was largely a one-way presentation albeit encouraging audience participation through questions. Today, we have evolved massively from educational forums to participative workshops with much more engagement and two-way participation, with breakouts and feedback sessions, to developing initial thoughts on application.
The other major change is the transition from public education to focused private education and workshops, for an individual client which is now our norm. The private workshops are preceded by diagnostic activity to ensure we have a good understanding of the client and their issues to enable tailoring of our typical educational message to the specific needs of the client. Moreover, by educating the ‘critical mass of key influencers’ together we accelerate the knowledge transfer and process design phases of a transformation programme.
Stay tuned for the third and final part of Andrew’s blog series, where he will share his insights into the healthcare industry, including sector challenges and advice on what healthcare organisations can learn from other industries.
Learn more about the history of Oliver Wight by visiting our 50th anniversary page to watch our journey and hear special messages from our clients.