PREVIEW In a 2010 Foresight article, S&OP Editor John Mello argued that successful execution of S&OP is inevitably linked to corporate culture. A culture based on silo mentality and lack of trust not only undermines S&OP effectiveness but also reduces employee engagement and well-being. In this article, Niels van Hove (Principal Consultant at Crimson & Co) argues that while effective S&OP can thrive in the right company culture, the process itself can influence and shape that culture. He calls for S&OP leaders to articulate goals that include clear expectations on behaviours. Doing so will not only improve effectiveness but also enable S&OP to play an active role in improving employee attitudes and satisfaction.
S&OP implementations require significant change, not the least being behavioural change. And change is hard. In his ground breaking 1996 study Leading Change, John Kotter reports that change transformation is successful in only 30 percent of companies. A McKinsey study among 3,199 CEOs in 2008 confirmed that indeed only one in three transformations succeeds (Aiken & Keller, 2009). And of the failures, 70 percent are due to culture-related issues: employee resistance to change and unsupportive management behaviours (Aiken & Keller, 2011).
Despite these facts, only 26 percent of practitioners think that behaviours are adequately addressed in S&OP implementations (Van Hove, 2015). It is not unlikely that a lack of attention to behaviours is a major reason why S&OP maturity stalls, regardless of the maturity model used. Sixty-seven percent of companies could not get further than stage 2 out of their four-stage S&OP maturity model. (Barrett & Uskert, 2010), with most stuck in stages 1 and 2 (Kinaxis, 2011). On top of this, 36% of companies’ S&OP efforts are stalled or moving slowly (Cecere & Chase, 2012).
But rather than seeing behaviours and company culture as obstacles to implementing and developing S&OP, we should view S&OP as an opportunity to shape and improve company culture. Executives need to align themselves around what effective mind-set and behaviours to integrate into their company culture. If they should aspire to achieve high levels of S&OP maturity, S&OP can play a critical role in establishing this culture. First, executives need an understanding of what these effective mind-sets and behaviours are—and need to demonstrate these behaviours themselves.
Here they include “the organisational mind-set and practices that facilitate and advance formal planning.” In terms of individual and organisational mind-set, psychology explains how some mind-sets are more effective than others.