Blog #35: What’s Steering Your Company?
A couple of recent conversations have made me wonder whether companies are looking at IBP - and S&OP - the wrong way round.
The first was with a finance manager at a large international commodity business. He was focused, entirely reasonably, on one question: what is this IBP programme going to do to our bottom line? And all I wanted to say was - buddy, everyone in this building is already banking those sales-incremental promises and cost-reduction initiatives. Your IBP isn’t the only thing with a claim on them.
Forgive the blasphemy, but in my view a better bottom line is almost incidental. It’ll come. I’m certain of that. But it comes as a by-product - of you and your exec team taking control of the company.
The second conversation was the same truth from the other end. A CEO of a mid-sized manufacturer, keen for a fast, effective S&OP deployment - not because she’d read the textbook, but because she wanted control. Control of the product failures, the DIFOT drops, the inventory blowouts that nobody seemed to own. She’d never have called it a strategy execution instrument. She just knew she’d lost her grip on her own company, and sensed this was where she’d get it back.
So here’s what I think IBP is actually for.
It’s how you control your company.
Not “a tool that supports decision-making.” Not “a process that aligns the functions.” It is the mechanism by which you and your senior team decide and drive what this company will do over the next two years - across every function, with the trade-offs out in the open and the bets named - every month, in one room, with the people who can commit the resources.
There is no other forum that does this. Strategy sets the direction. The board governs. Finance reports what already happened. Your one-on-ones influence. Only IBP or S&OP decides. Take them away, and you don’t control your company over the medium term - you find out what happened at the month-end review, or the flash report, which is just the same news arriving a few days quicker, and call it management.
And here’s the part that finance manager hadn’t seen. The decisions that actually shape his company were already being made - where to allocate a constrained input across products with different returns, which customers to favour when supply gets tight, which bets to fund. They were just being made quietly, informally, by whoever happened to be closest to them, with no one in the room who could see the whole board. Control isn’t about inventing new decisions. It’s about dragging the ones already happening out of the dark and into daylight - where the exec team can see them, weigh them, and own them. That’s the moment a company stops being steered by its corridors and starts being steered by its leadership.
So when he asked what IBP would do to his bottom line, the honest answer was: on its own, probably nothing he could ever prove. The number is just an outcome. Control is the objective.
Once you see IBP this way - as control, not reporting - you start to notice how much has quietly drifted. What the meetings are really for. What the metrics measure. Who’s in the room, and who stopped showing up. But that’s for another day.
So, hand on heart: if your IBP stopped tomorrow, would you lose control of anything - or would you just lose a meeting?
#IBP #S&OP