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How I Got a Standing Ovation from my CEO

Here's one way to become an S&OP superstar

By ·
By ·

There’s one item on my resume that gets more comments than any other.  It’s the line “Transformed the monthly Sales and Operations Planning (S&OP) meeting from an ambush meeting into a constructive forum to discuss and decide cross-functional issues; got standing ovation from CEO.”  This is the story of how I got the standing ovation. 

In general, the S&OP meeting (aka, Sales and Operations Planning, or Sales, Inventory, and Operations Planning (SIOP)) was invented as a forum where the company comes together at the highest level to align all functions on executing its plan. This is where Sales stands behind their forecast, Operations stands behind their delivery schedule, and the business units stand behind their product launches. 

Ideally, everything meets or exceeds the company’s operating plan.  In practice, it can be a finger-pointing free-for-all where the players draw attention away from themselves by pointing out the failures of their peers in front of the CEO.  If you’ve not seen such meeting then either your company is exceptionally well-run, or you’ve simply not been invited to your company’s S&OP meeting. If you’ve been in these meetings then you know I am not exaggerating. 

In my company, this dysfunctional S&OP meeting was well-attended and well-intentioned; it was just broken.  The list of broken items included:

- No preparation for the participants.  The slides were often distributed 30 minutes before the meeting so everyone was seeing them for the first time in the meeting.  No one knew what the topics were going to be, nor had time to review the data behind any of the topics.

- Too many numbers and not enough words.  The monthly presentation had expanded to be 110 pages of numbers, sliced in every conceivable dimension but without any context, interpretation or summary.  The answer to “Why is your growth only 9%?” could be that the prior year was exceptionally high due to a now forgotten reason. But know one could quite remember in the meeting.

- No input from the participants.  The slides were prepared in isolation.  A small stand-alone team selected and assembled the content themselves. Sure, some data each month was repeated (sales, forecast, inventory levels, etc), but the “S&OP view” of the business was often different from the way each BU and region reported things themselves, so it was essentially a surprise each month.

- No decisions were made.  Because the content of the meeting was one big surprise, no one was willing to trust the data they’d seen and make a decision.  Every discussion ended with “we’ll check into that and get back to the team.”

One morning I was walking back to my office with my SVP and he asked me what I thought of the meeting.  And I told him. Bluntly. “Ok” he said, “beginning next month you own it. I’ll let the CEO know.”

Here’s what I did:

- I reached out to each of the key leaders for their input. “What do you think are the 1-2 hot topics we should discuss next month in the S&OP meeting?”  The SVPs and CFO would give me a few good topics each month.
 
- Starting with the list of topics, I solicited the full story on each topic. “What’s your perspective on this issue?”  Many times the reason it was a hot topic is because the different players in the room had been unable to see things the same way or to agree on how to proceed.  Sales, BU, Finance, Operations… everyone had different view of the situation and I listened and collected each point of view.

- I collected and analyzed the data. Given the topics, I analyzed the data in the light of the different perspectives.  “Is this customer truly as profitable as we thought?”  “What is the history of this type of product launching on time?”
 
- I summarized the key issues.  I created a presentation where the first 20 pages contained all the summary, context, and analysis needed to make a decision.  The 100+ pages of numbers were in the appendix if anyone wanted to refer to them.

- I made sure people were prepared before the meeting.  No more ambushes.  I was driving for informed collaboration.  I published the slides 24+ hr before the meeting, so each attendee could arrive prepared and I had in-depth conversations regarding the controversial topics ahead of time.  Everyone involved in the controversial topics knew what the data was and the trade-offs / choices were ahead of the meeting.  This allowed the exec team to make decisions in the meeting.

- I aligned the nomenclature and product hierarchies across the company so that both S&OP and each region / BU had the same view of the business every day. Enough said!

In this way I was able to run an S&OP meeting where the executive team made informed decisions together.  No longer did people throw their peers under the bus.  One day, when we had finished early and the room was full of positive energy instead of tension the CEO stood up and clapped.  “This is the best S&OP meeting I have ever attended” he said as the rest of the room joined. 

These activities accelerated my understanding of the business and my respect among the executive team and lead directly to me getting promoted to VP less than two years later. 

Dennis Arnow is a supply chain consultant. He can be reached at .(JavaScript must be enabled to view this email address)


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