The Pursuit of Growth: Is Your Sales and Operations Planning (S&OP) "Glocal" Enough? [Part 2]

© StrataBridge 2013 © StrataBridge 2012

The Pursuit of Growth Is Your S&OP ‘Glocal’ Enough

Chris Turner StrataBridge

© StrataBridge 2013

Some Structure & Thought-Provokers

Going Global –"Everybody’s Doing It…

Cognitive Traps and Unintended Consequences…

Putting the Pieces Together –"Some Principles…


Underneath it All"3 Fundamental Laws that have shaped the StrataBridge approach; all of which are compounded by ‘going global’/international expansion…

The Law of PERSPECTIVE

The Law of ENTROPY

The Law of CHANGE No matter how hard you resist or deny it, things are going to change, often unpredictably so

It all depends on ‘where you are coming from’

Unless energy is expended to counter it, things become random, break-down, over time








Globalisation – How is it for you?

•  Is your company pursuing a strategy of globalisation/international expansion?"

•  If yes, what are the primary drivers of this strategy?"

•  Access to new customers

•  Pursuit of cost reduction

•  A Result of outsourcing/off-shoring

•  The result of Joint Ventures or Mergers & Acquisitions

Yes 93%

No 7%

74%

46%

20%

36%


Globalisation - Some of the BIG DRIVERS…

•  Shifting Demographics

and Economic Dynamics

•  Outsourcing & Off-shoring

•  1’s and 0’s

•  Telecomms

•  The Internet

The Pursuit of Growth

The Pursuit of"

Cost Reduction


‘04 ‘06 ‘10 ‘08 ‘12 ‘03 ‘05 ‘07 ‘09 ‘11

20.00

40.00

30.00

60.00

50.00

70.00

80.00

‘94 ‘96 ‘00 ‘98 ‘02 ‘95 ‘97 ‘99 ‘01

Share of "World

Imports %

Sources: World Trade Organisation, The Economist: The World in 2012

Trading Places…

‘93 ‘92 ‘91 ‘90

20.00

40.00

30.00

60.00

50.00

70.00

80.00

Developed Economies

Emerging Economies

Globalisation – There is no escape…

© StrataBridge 2013 © StrataBridge 2012 © StrataBridge 2012

Consistency"Standardisation"Proceduralisation

Change Innovation

Experimentation

Learning, Competitive Advantage & Results

fuelled by…

Efficiency Productivity

Agility Adaptability

Hierarchical and Centralised

Flat, Networked and Distributed

Performance Beliefs…

Organisational Construct and Location of Power…

Analytical Exercise Fixed Destination/Direct Route

Systemic Intervention Overarching Direction/

Course Correction

Mechanical Formulaic Wanting Answers

Organic "Dialogue-based

Asking Questions

Data-driven Numbers based

Insight-driven Assumptions based

? !1+2=3

Approach to Strategy…

Decision-making Routines…

Supporting Information Focus…

Process (People are there to ‘enact the process’)

People (Process provides ‘enough structure’)

Obedience Compliance Competence

Creativity Stretch

Passion

Automate the Processes

Enable the People

Results Driven Through…

Talent Hired For…

Technology used to…

C

o

n

t

r

o

l

G

r

o

w

t

h

More Volatile More Uncertain

New ‘Rules’

Volatile Uncertain Changing ‘Rules’

External Environment - Competitor, Customer, Consumer Landscape & Behaviour - & Macro Trends

Stable Predictable Consistent ‘Rules’

Volatile Uncertain

Changing ‘Rules’

External Environment - Competitor, Customer, Consumer Landscape & Behaviour - & Macro Trends


WT…..?

‘glocalisation’


What’s in a name?







Some of the biggest Cognitive Traps and Biases in ‘Going Global’…

• A reluctance to admit complexity


Decision-Making Domains, Leadership Responses –"No One Size Fits All

Simple Complicated Complex

Cause = Effect Cause Effect Cause Effect

•  Lack of common understanding of the distinctions between these domains, the available responses and the implications for our planning and decision-making routines

•  Blindness to the limits of prevailing mindsets, processes, techniques and tools, as we move along this spectrum

•  Increased susceptibility to an range of traps, distortions and deceptions in the face of complexity



• The desire to ‘jump to ‘Algorithm’’ • A reluctance to admit complexity


Mystery

Hunches/ Questions/Paradox

Algorithm

Repeatable/ Reliable/ Formulaic

Heuristic

Principles/Rules ofThumb

Different Challenges; Different Modes of Thinking and Acting Choosing where to focus and how to drive Learning-Action-Results

Adapted from Roger Martin



• Mechanistic approach

• A reluctance to admit complexity • The desire to ‘jump to ‘Algorithm’’


“The terms ‘hard facts’ and ‘the soft stuff’ used in

business imply that data are somehow real and

strong while emotions and relationships are weak and

less important.”

—George Kohlrieser, Hostage at the Table"(Kohlrieser is a hostage negotiator and professor of management)



• A reluctance to admit complexity • The desire to ‘jump to ‘Algorithm’’ • Mechanistic approach • The ‘Duplication’ Trap







Putting the Pieces Together – Some Principles…

•  Clarity of Strategic Choices is Critical

•  Strategy – Decisions – Accountability


Putting the Pieces Together – Some Principles… Strategy Execution – Top 5

1. Everyone has a good idea of the decisions and actions for which he or she is responsible

2.  Important information about the competitive environment gets to headquarters quickly

3. Once made, decisions are rarely second-guessed 4.  Information flows freely across organisational boundaries 5. Employees have the information they need to

understand the bottom-line impact of their day-to-day choices

Source: Booz & Company Research – June 2008 17 Fundamental Traits of Successful Strategy Execu9on

Information Flow Decision Rights & Accountabilities Key:





•  Design the Process to Support Decision Making – Decision Scope, Decision Rights and Information Flow


GLO

BA

L C

LUST

ER

SUPP

LY

POIN

T/3R

D

PAR

TY

SUPP

LIER

Design the Process to Support Decision-Making – Ensure Coherence with Organisational Design and Accountabilities, Decision Scope and Decision Rights…

CO

UN

TRY

Optimisation

Finance

Direction Optimisation

Finance

Direction

Supply

Optimisation

Finance

Direction

Supply

Optimisation

Finance

Direction Demand

Demand Demand

Demand

Portfolio"Management Portfolio"

Management

Innovation Optimisation

Finance

Direction

Optimisation

Finance

Direction





•  Design the Process to Support Decision Making – Decision Scope, Decision Rights and Information Flow

•  Take an ‘Organic’ Approach – Balance People and Process…

•  Leverage Technology – Enable the People, Accelerate the process (don’t just ‘aggregate’ it)


A Brief Introduction… …StrataBridge StrataBridge is a boutique consulting firm that specialises in advising fast-moving, brand led organisations on strategy, innovation and operations. StrataBridge help create and develop the relevant thinking, processes, capabilities and behaviours to allow organisations to bridge the gap between where they are and where they want to be. In short, we connect the dots between hard and soft organisational issues to create the bridge between a client’s real world and their ideal world. …Chris Turner Co-founder of StrataBridge, Chris works with a range of clients worldwide, across industry sectors, on strategy development, innovation and joined-up decision-making. A highly respected facilitator, Chris has a unique ability to understand and simplify complex business issues and opportunities and translate these into action. He has worked with leadership teams around the world, helping them to create, articulate and realise their strategies through insightful diagnosis, joined-up decision-making and capability building. Chris’s long-term client relationships are built on his ability to balance the delivery of fast results with sustainability, and Chris’s clients include Anheuser-Busch, Bakehouse, Coca-Cola, Compass Minerals, Mars, Mass Mart SA, PZ Cussons, SC Johnson, Shell. Chris can be reached at: e | [email protected] m | +44 7802 252 003 o | +44 1277 633 433 w | www.stratabridge.com


Chris Turner mobile: +44 7802 252 003 e-mail: [email protected] web: www.stratabridge.com