Mitigating Risk & Uncertainty

Last month we said that effective implementation of Executive S&OP created discomfort. This is because it's different from past experience. There are, however, several more issues to deal with: a) risk and b) uncertainty.

Most top management teams don't like risk and uncertainly. These must be minimized in order to get top management to authorize and effectively engage in an implementation effort.

 Here's the most effective way to deal with these issues:

•    Get a potential Champion from the ranks top management to learn about Executive S&OP - via workshops, books, or videos.
•    The Champion should schedule an Executive Briefing - a facilitated business meeting - to be led by a person having hands-on experience with successful Executive S&OP, and attended by the top management team, including the leader of the business.
•    From the Briefing gain a commitment to dedicate limited resources to bring up a live pilot of Executive S&OP - one or two product families - within 90 days or less.
•    Following the live pilot, make a go/no-go decision to implement full Executive S&OP: all families and full financial integration within the next six months.

This approach reduces both risk and uncertainty to near zero. The risk is miniscule: some people's time for a three month period to bring up the pilot, and no one full time on the project.

Following the live pilot, in which top management participates hands-on, the uncertainty is zero. The executive group has seen how the process works in their company. They have not only seen it; they've done it. They are now in a position to make a completely informed decision whether or not Executive S&OP will be helpful to their business.

The low-risk 90-day pilot is one of the key elements in bringing the top management team fully on board with Executive S&OP.