Why is my IBP process not working and what can I do about it?
20 Jan 2021
Blog
Does your Integrated Business Planning process leave you wondering what went wrong? Maybe you’re stuck trying to unlock its full potential to deliver the results you expected. We have seen many businesses implement IBP only for it to fall flat. But why does this happen? There are nine key factors which are fundamental in enabling IBP to drive success.
Use the following questions as prompts to determine where your process may need improvement.
- Are leadership engaged? Not only do your leadership team need to be involved in IBP (setting the strategy and articulating it through objectives to deliver company goals), but they must own it!
- Is the purpose of your IBP process to deploy the strategy? Double check your IBP ambition – is it set high enough? IBP can only deliver what is it set out to achieve. A successful IBP process will bring focus on the deployment of strategy and provide the framework for effective decision making.
- Do you have one set of numbers? Well-integrated IBP allows people to concentrate on their own role without having to second guess other people’s numbers. Implement core measures (like bias) to identify where numbers are contrasting but focus on educating the business on why one set of numbers is so essential.
- Is your business fully integrated? Are people still clinging onto old processes? Ensuring key enabling functions are integrated into the business planning cycle is essential to understand business projections over the extended planning horizon. All projects need to be managed through IBP and their impact fed back into the planning activity.
- Is IBP configured to your business? There is no ‘one size fits all’ version of IBP, yet I see so many businesses that have not tailored the process to suit their decision making matrix or the right accountabilities.
- Is IBP covering the appropriate horizon? IBP must cover the full horizon required for your business to make the right decisions in the right time frames. 36 months is recognized as the standard, but businesses are often caught in the short-term and misuse IBP for urgent vs important issues. Avoid becoming too focused on the here and now or you will miss out on future opportunities.
- Is there a formal planning architecture in place? Are you trying to use IBP to solve every problem in your business? Issues and gaps need to be resolved at the lowest practicable level. Only major decisions appropriate to the pay grade of the leadership team should make it to the top. Integrated Tactical Planning is the weekly decision making process used to re-align and re-optimize core plans and ensure they flow into the IBP horizon. A monthly process is too rigid to manage here and now.
- Are people demonstrating the right behaviours? Is everyone working towards the same goal? Unless people understand the cause and effect, well-rooted bad behaviours won’t change. Incentives, leadership or lack of understanding are often the biggest behavioural influences at play.
- Does everyone understand the need for change? People need to know why IBP is the process that runs the business and what benefits it brings for them. Remember, people are the biggest asset a business can have and should be your internal advocates and agents of change. A formal change management process led through education delivers long-term engagement. If your team haven’t been led through the change curve (Change = Dissatisfaction x Vision x First Step > Resistance) then they won’t understand why it is necessary to do things differently.
Our virtual workshop, Integrated Business Planning: Realize the Potential is taught by Oliver Wight Partners and specifically designed to provide you with practical steps to exploit the value of IBP and drive excellence. Visit our website to learn more or book your place by emailing [email protected].
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