CEOWORLD magazine - Latest - Game Changer - The Defining Factor in Companies with Exceptional Planning Processes

Game Changer

The Defining Factor in Companies with Exceptional Planning Processes

Take a minute to think about your company. How do things get done? Are decisions influenced only by logic, facts, and data, or are politics and informal networks involved?   

A successful planning process must embrace people and the behavioral aspects of teamwork. What separates companies with exceptional planning processes from those that are regularly frustrated by their processes comes down to one word: trust 

For a team to work well together, there must be trust in the people, process, and tools. Without trust, people compensate by building hedges, second-guessing, and double-checking. That creates waste and inefficiency, and ultimately undermines business performance. It also erodes the foundation of teamwork.  

Early in my career I spent some time in accounting. I was a financial controller and was responsible for managing cash. I naively thought that the process would be straightforward: customers would pay their bills and we would pay our suppliers when our bills were due. Nothing could be further from the truth. I was constantly negotiating — not only with customers and suppliers, but with the owners of the company as well. Certain loan covenants had to be met, and the owners had a lot at stake personally. I was advised early on to create my own hedge.  

When the CEO signed checks for key suppliers, I held some of them back instead of mailing them all immediately. This gave me some negotiating leverage. When a supplier would call, I could promise to try to work something out with the CEO to have a check signed, when in fact it was already signed and all I had to do was send it.  

What I know now — but didn’t appreciate then — was just how much of my time and energy was spent managing the hedge instead of managing the business. The CEO knew that I was holding back signed checks but wasn’t quite sure how many. That led them to second-guess my requests to sign more. That made my ability to get checks signed less reliable. That undermined my ability to make commitments to suppliers. It was a vicious cycle.  

I quit my job as financial controller because of the stress. I’ve seen similar situations with family, friends, and colleagues. By contrast, when I look to those who I believe are truly happy, there is a common theme. They tend to work and live in environments where there is a culture of trust.  

Trust is not simple to create and sustain, however. In order to trust something, we must be prepared to rely on it. Relying or depending on a person or a piece of information means that we’re prepared to be vulnerable and expose ourselves to the possibility of failure. When I get into my car and drive, I’m depending on the brakes, steering, and other critical components of the car to work. If the brakes were to fail, I would certainly be in trouble. I’m reliant on them to work. I trust that the design of the car and the maintenance performed on it will keep me safe. It saves me from having to become an expert mechanic myself and allows me to focus on what I want to accomplish — which is getting from point A to point B safely.  

Relying on something is a choice. We choose to trust — in this case our brakes — because the risk of failure is significantly less than the cost of not being able to rely on them. Equating this example to trust and reliance in business, people need to believe that relying on a person or piece of information is worth it. The risk of failure must be perceived as being lower than the cost of not relying on it.  

When there is a lack of trust in an organization, additional time and energy is wasted not only by second-guessing and hedging, but also by positioning and politicking. Instead, when trust is a foundational element of the planning process and its implementation, all the pieces can fit perfectly into place.   

Here are some ways that trust can be made a defining factor in a company’s planning process:  

  1. Follow through on commitments.
    The best that we can do to earn another’s trust is to look in the mirror and address the things that we’re doing within our ownfunction that will inspire trust. The key is to focus on what is within our control and what we can do to be more trustworthy. By following through on our commitments, we show our reliability and thereby foster a culture of trust that influences all aspects of our work. 
  2. Understand that trust is a two-way street.
    We often use the phrase, “Trust is earned.” But that’s only partially true. We don’t trust people who don’t trust us. People from whom we’re trying to earn trust must also be trusted by us. Trust can’t be created unilaterally, but it does involve a choice to be vulnerable in trusting others. 
  3. Realize that building trust isn’t someone else’s job.
    Building trust isn’t something for someone else to do. Everybody has a role to play, and it’s best to focus first on making ourselves and our deliverables trustworthy before expecting others to trust and rely upon us.

Leaders can play a critical role in fostering trust by communicating its importance and positively reinforcing trustworthy behaviors.  

Written by Greg Spira.

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CEOWORLD magazine - Latest - Game Changer - The Defining Factor in Companies with Exceptional Planning Processes
Greg Spira
Greg Spira is an expert in Demand Management and Integrated Business Planning (IBP/S&OP) and works with companies to implement lasting change at all levels and across functions by building organizational capability and developing high-performing teams. He has written and co-authored many white papers on Demand Management and is an instructor of the Oliver Wight Demand Management course. His new book, Trust the Plan: Demand Management for Business Leaders (J. Ross Publishing, April 18, 2023), shares how to ensure cross-functional collaboration, alignment of plans, and teamwork in any Demand Plan process.

Greg Spira is an opinion columnist for the CEOWORLD magazine. Connect with him through LinkedIn. For more information, visit the author’s website CLICK HERE.