Implementing S&OP is a challenging process, not just from a technical point of view but also from an interpersonal point of view. S&OP introduces substantial changes to many functions and levels throughout the company and these changes may be overwhelming and even scary for some employees. As a result, resistance is a very common reaction during an S&OP implementation.
Resistance may have serious consequences for any change process and when not managed properly, may lead to a complete failure of the change. Therefore, managing resistance to change is critical to the success of an S&OP implementation, just as much as a well-designed process. Below are six tips for dealing with resistance to change for a successful S&OP implementation:
1. Involve the right people in S&OP Change
Before starting any change, even before starting to design the very first process step of S&OP planning, make sure to engage the right stakeholders into the process and provide the opportunity for them to take part in shaping the change. This helps them to feel that they are part in steering the direction of the change and may reveal some serious rejections early on. However, this often is a tough challenge in large corporations due to a large number of stakeholders involved in the change and will be much more feasible in smaller to mid-sized companies.
No matter the size of the company, aims to talk to at least three stakeholders in each department that will be affected by the changes of S&OP planning from different levels and different functions. Having these early conversations will increase the feeling of ownership and will help to get the buy-in of the key stakeholders early on.
2. Make sure you clearly communicate the full picture in S&OP Change
Start by explaining the full picture to all the people affected by the change; not just what will affect them in particular but the entire journey. Why are we doing this? How does the entire process look like? How do they fit into this picture? What will be expected from each employee? These kinds of questions should not only be answered to the high level, but to everyone who will be affected by the implementation of S&OP.
From the CEO to supporting staff, everyone who will be affected by this change should be kept in the loop. Having this open communication will answer upfront many potential technical and commercial questions about the process and reduce uncertainty for the involved employees.
Even though the change might be clear to you, this might not be the case for the others. Explain potential pain points that you expect along the way to the affected people and define the desired outcomes of the change to help them visualize the process and know what to expect.
Consider laying out the full scope and reasons for implementing the S&OP process, including the benefits, as well as the risks. Presenting a full picture will help to reduce the uncertainty, which is often the main reason of resistance to change.
3. Follow a step-by-step approach in S&OP Change
This one might seem trivial because you cannot change the world in one day. Starting with smaller changes will give the involved people time to learn, adapt, and to master the change. Make sure you understand all aspects of change and have a clear desired outcome in mind.
A very common perception of change managers, when faced with resistance, is to assume that the employees are too lazy to adapt, but this is rarely the case. In the end, S&OP brings some radical changes to how people work. Changing behaviors and habits is tiring, it requires motivation, focus and time. Employees are expected to change the way they work while at the same time continuing to achieve their targets.
Accordingly, implementing S&OP planning in the busiest time of the year may not be the best idea, as the main focus will be year-end target. Even though there is always time pressure for the implementation, leave enough time to complete and master each step for the employees. Moving too hastily might amplify the resistance.
4. Create aligned cross-departmental goals in S&OP Change
KPIs often measure the performance of only one employee, but S&OP is about cross-functional goals, which requires right KPIs to reflect that. Without aligned KPIs, there is plenty of room for contradicting agendas that doesn’t serve the common goals. By aligning, for example, forecast accuracy as a shared KPI between demand planning and sales, it is possible to create incentives to collaborate and provide the most accurate information possible leading to a more accurate sales forecast.
However, aligning KPIs is one of the most difficult changes to implement. The directors of each department have to be convinced to implement such a significant change in performance measure. But the real challenge is making sure the cross functional units work together towards common goals. Ensuring that the cross-functional teams meet in person and have time to work together physically can help to ease the change process and promote the common goals.
Unfortunately, this is not always possible. In many companies, demand planners are located in different offices than the sales teams.
Demand planning often involves ‘intense’ discussions and having personal contact upfront helps with better communication and a stronger professional relationship between the members of the cross-functional team. Providing space to connect and communicate with each other may help to increase the efficiency of the cross-functional teams, especially if they reside in different locations.
5. Recognize that some resistance is normal in S&OP Change
As much as we wish that everybody would jump on board with the proposed change, some people will rarely be as excited about the change as you are. One of the main reasons for resisting to change is the fear that personal weaknesses might be revealed during the process.
This uncertainty and the fear of unknown leads to a rejection of the transition phase, not necessarily the idea of change itself. In order to overcome these fears, a great way is to look at the full scope of activities of the employee. Identify what are some of the key aspects that will not change.
Recognizing the things that will stay the same and feeling more familiar with the change may help the employees to stay rooted during the entire transition process. Also use this chance to highlight the changes on daily activities and discuss the benefits that the change will enable.
Illustrating these aspects will help to paint a picture of the change and depict a picture of how it relates to the entire scope of work in a relatable way.
6. Create space for informal communication in S&OP Change
Every S&OP implementation process is unique and brings different challenges with it. Keeping an open communication with the stakeholders is often the most effective way of managing the resistance. Social activities around the change process is a great way to encourage communication.
After training sessions, cross-functional trainings, workshops, organizing activities that allow the people to connect in a different environment, not only helps the team members to connect, it also creates the space to talk to those who resist. It is not always the one who screams the loudest that resists the most, people can also resist silently to the change. Silent resistance is the most challenging form of resistance to identify and work on.
Providing a space to share helps the resistance to gain a voice rather than silently hindering the success. Once you know about the resistance and its roots, it gets much easier to resolve it.
About Vanguard Software
Vanguard Software introduced its first product for decision support analysis in 1995. Today, companies across every major industry and more than 60 countries rely on Vanguard Software’s Integrated Business Planning (IBP), forecasting and advanced analytic cloud platform. Vanguard Software is based in Cary, North Carolina.