Planning vs Execution: Keeping Planning and Execution Processes Distinct (AI voices Arkaro content)

Welcome to the Arkaro Insights podcast. This episode is based on original content developed by Arkaro. At Arkaro, we're committed to innovation in everything we do—including how we share our insights. We've utilised advanced AI technology to transform our written expertise into this conversational format, making our content more accessible and convenient for our busy B2B audience. What you'll hear is a two-person discussion generated through AI voice technology, designed to deliver our insights in a more engaging way than traditional reading. As we continue to evolve this approach, we genuinely value your feedback. Thank you for listening to Arkaro Insights, where professional expertise meets innovative delivery.

Full article: Planning vs Execution: Keeping Planning and Execution Processes Distinct

We tackle the critical challenge many B2B companies face: maintaining clear boundaries between strategic planning processes and daily execution activities. When these lines blur, companies find themselves trapped in a cycle of firefighting that prevents meaningful strategic work.

• S&OP (Sales and Operations Planning) should focus on medium-term horizons (3-12 months) and strategic alignment
• IBP (Integrated Business Planning) extends planning to 24+ months with focus on value, not just volumes
• S&OE (Sales and Operations Execution) handles the day-to-day operations and tactical problem solving
• Warning signs of blurred boundaries include planning meetings becoming firefighting sessions
• When senior leaders disengage from planning processes, strategic vision diminishes
• Clear separation between planning and execution creates better focus at all organizational levels
• With proper boundaries, companies achieve better resource allocation and more effective collaboration
• Fixing blurred boundaries can show results in 3-4 months, with full benefits realized in 6-12 months

Visit arkaro.com to learn more about how we help companies establish clear boundaries between planning and execution processes, or contact Mark directly at mark@arkaro.com.

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Transcript

Introduction to Planning vs. Execution

Speaker 1 0:47

Welcome to Arkaro Insights, the podcast where we help B2B executives folks just like you get better results by bringing you the latest ideas in change and innovation.

Speaker 2 0:55

That's right.

Speaker 1 0:57

Today we're going to dive deep into something we know a lot of B2B companies struggle with.

Speaker 2 1:01

Oh yeah.

Speaker 1 1:02

That blurry line between you know planning and actually getting things done. You spend all this time planning, but then how do you actually execute on that plan?

Speaker 2 1:11

It's so common we see it all the time.

Speaker 1 1:13

Yeah, and we're going to be looking specifically at why it's so important to keep your strategic planning things like S&OP or the more advanced IBP completely separate from your everyday execution of what we often call S&OE.

Speaker 2 1:27

Right Separate processes, clear boundaries.

Speaker 1 1:29

And we'll be drawing on, you know, ar, our car's years of experience helping businesses figure this out. So to kick things off, I think we've all seen this happen Companies put a lot of energy resources into setting up these sophisticated planning processes. Right, you brought in some fancy software, maybe.

Speaker 2 1:44

Oh, absolutely.

Speaker 1 1:45

Hoping for better alignment. You know better forecasting, but then what happens?

Speaker 2 1:52

Well, more often than not, those planning meetings, the ones that are supposed to be about the big picture, you know long-term strategy, they get bogged down in the day-to-day, the urgent stuff.

Speaker 1 1:59

Right, exactly.

Speaker 2 2:00

This week's shipments, a problem with a specific client. Suddenly you're not talking about where the business is going in the next year, you're putting out fires.

Speaker 1 2:08

It's like trying to I don't know, use a map to plan a road trip, but you're putting out fires. It's like trying to, I don't know, use a map to plan a road trip, but you're so focused on the potholes right in front of you that you never actually look at the bigger route.

Speaker 2 2:16

Exactly the perfect analogy and you lose sight of the destination.

Speaker 1 2:20

You set up these meetings, get the senior leaders in a room or, you know, virtual room. These days, you're expecting to talk about the big picture, the next six, 12 months, even further out, but then boom, the conversation just drifts.

Speaker 2 2:33

Happens all the time.

Speaker 1 2:34

Into troubleshooting. You know why is this order delayed? What do we do about this rush request? All important stuff.

Speaker 2 2:40

But not for this meeting.

The Blurring Problem in B2B

Speaker 1 2:42

Exactly. And so what happens when you have that mismatch? Those senior leaders, the ones who should be focusing on the strategic stuff, the long-term opportunities they check out.

Speaker 2 2:51

They check out, they check out, right yeah.

Speaker 1 2:53

Because it's just not relevant to them, the conversation's not at their level, and so you know those strategic initiatives, the important stuff gets pushed aside because you're constantly putting out fires.

Speaker 2 3:04

And then the worst part is, it becomes a cycle. Oh yeah, the same operational issues keep popping up in your planning meetings month after month.

Speaker 1 3:13

So that long-term vision, that strategic horizon, it just keeps shrinking Down to the next quarter, the next quarter exactly, and so that's what we really want to help you understand today.

Speaker 2 3:23

The B2B executive.

Speaker 1 3:25

Yes, why it's so crucial to keep that separation, to have a clear line between, on one hand, your strategic planning, your S&OP, your IBP, and, on the other hand, that daily execution, the S&OE.

Speaker 2 3:37

That's what leads to better results 100%, and this is the blurring problem we want to really dig into today. You mentioned some of the signs. The meetings become all about putting out fires, the senior leaders lose interest. Strategic thinking goes out the window. Does this sound familiar? I mean, have you seen this in your work with B2B companies?

Understanding S&OP and Strategic Planning

Speaker 1 3:55

Oh, all the time it's almost like a textbook case. You get these sales leaders, supply chain people, maybe some product folks. They're all together for an S&OP meeting.

Speaker 2 4:04

Right.

Speaker 1 4:07

Supposed to be looking ahead six to 12 months Crucial in B2B, you know those longer sales cycles. But five minutes in and it's all about why a customer order is delayed or how to handle a last minute request from like a really big account. And look, I get it. Those operational things are important.

Speaker 2 4:24

Of course they have to be addressed.

Speaker 1 4:26

You have to deal with them, but not here, not in a strategic planning meeting.

Speaker 2 4:30

Right. It dilutes the purpose. It's like using a quarterly earnings call to talk about the broken coffee machine in the break room.

Speaker 1 4:37

I like that.

Speaker 2 4:38

Important maybe, but not the right time or place.

Speaker 1 4:41

Exactly. So how do we draw that line then? What should these different processes, the planning and the execution, what should they actually look like?

Speaker 2 4:48

Good question. Let's start with the planning side. SandOP, IBP.

Speaker 1 4:52

Okay makes sense, and I think it's important to remember here that S&OP and IBP they're not totally separate things. IBP is really like a more mature, more complete version of S&OP.

Speaker 2 5:03

It builds on it.

Speaker 1 5:04

Yeah, like think of S&OP as the foundation, and then IBP is adding that strategic layer on top.

Speaker 2 5:10

A good way to put it.

Speaker 1 5:10

So let's start with S&OP. What does that actually look like in a B2B company?

Speaker 2 5:15

Okay, so typically S&OP is a medium-term process You're looking maybe three to 12 months out and the goal is to make sure that what you expect to sell, the demand, matches up with your ability to actually deliver it, supply Exactly, and this is usually done at a high level. Looking at overall volumes, traditionally it's been driven by the supply chain side, focusing on, you know, moving products or having the capacity to deliver services.

Speaker 1 5:41

Makes sense. So what actually happens in an S&OP process, Like what are the activities?

Speaker 2 5:46

Sure, so you'll usually have demand reviews. That's where your sales and marketing teams the ones closest to the customers come together to figure out how much they expect to sell.

Speaker 1 5:55

The forecasting.

Speaker 2 5:56

Exactly. And then you move into a consensus forecasting process where different departments try to agree on a single forecast, one set of numbers for everyone to work from. Then comes supply planning. Can your operations team manufacturing, service, delivery, whatever it is can they actually meet that forecasted demand Right? And you also set inventory targets. That's especially important in B2B because you often have complex, expensive inventory to manage.

Speaker 1 6:23

Makes sense.

Speaker 2 6:24

And then usually all of this leads up to a pre-SandOP meeting, sometimes called integrated reconciliation. Oh, catchy where you try to iron out any major issues before the senior leaders get involved. And finally you have the executive S&OP meeting. This is sometimes called the management business review, and that's where the senior leaders come in, look at the plan and make the big decisions.

Speaker 1 6:45

And who usually attends these S&OP meetings? What kind of people are in the room?

Speaker 2 6:49

Typically you'll have folks from supply chain management, sales leadership, often at a regional or product line level, and then various middle managers who are involved in forecasting and operations.

Speaker 1 7:01

Okay, so pretty standard mix for a B2B company. And how often do these meetings typically happen?

Speaker 2 7:07

Usually monthly.

Speaker 1 7:08

Monthly.

Speaker 2 7:09

Which can be a problem because, you know, sometimes they get stuck looking backwards at what happened last month instead of planning for the future.

Speaker 1 7:17

Which kind of defeats the purpose?

Speaker 2 7:19

Exactly, and that actually brings us to some of the common challenges with S&OP and B2B.

Speaker 1 7:24

Yeah, let's talk about those.

Speaker 2 7:26

So first there's this pressure to hit this quarter's numbers. You know short-term thinking Always and that can really overshadow the longer-term planning. And then you have limited involvement from senior management. They might see S&OP as too tactical, too operational.

Speaker 1 7:42

Right, not strategic enough.

Speaker 2 7:44

Exactly. And then, as we mentioned, there's that backward-looking focus.

Speaker 1 7:47

Instead of being proactive.

Speaker 2 7:48

Yeah, and finally, the perspective is often very internal, you know, not really considering the bigger B2B market dynamics, the competition, what's happening out there.

Speaker 1 7:58

Right, and that's where IBP comes in right to address those limitations.

Speaker 2 8:01

Exactly IBP or integrated business planning. It takes S&OP to the next level.

Speaker 1 8:06

So it's like S&OP, but with a more strategic view.

Speaker 2 8:09

Exactly.

Speaker 1 8:10

What are some of the key things that are different or, I guess better about IBP?

Speaker 2 8:15

Well, think of it this way S&OP is like looking through a microscope You're seeing the details, but you're missing the bigger picture. Ibp is more like a telescope.

Speaker 1 8:25

I see.

Speaker 2 8:25

It expands your view. So first, IBP extends the planning horizon Instead of 3 to 12 months, you're looking out maybe 24 months, sometimes even further, which makes sense in B2B because things move slower.

Speaker 1 8:39

Right, those sales cycles are longer.

Speaker 2 8:40

Exactly. And then IBP shifts the focus from just volumes, the number of units you're selling to value.

Speaker 1 8:47

Okay, interesting.

Advanced IBP: Taking S&OP Further

Speaker 2 8:47

So you're looking at revenue projections, profitability, those kind of financial metrics, and this brings in the senior leadership. You're not just talking to supply chain and sales anymore, you're getting the executives, the finance people, product management, even key account managers involved.

Speaker 1 9:03

So much more of a cross-functional conversation.

Speaker 2 9:05

Absolutely, because IBP really aims to integrate more functions, not just supply chain and sales, and get everyone working together to make decisions across that full 24-month horizon. It's about identifying the key things that will drive your business forward.

Speaker 1 9:19

Those key drivers.

Speaker 2 9:20

Right and creating one set of numbers that everyone in the company uses, from sales forecasts to financial plans, to operational capacity. Ultimately, the goal of IBP is to become the main process for managing the whole business.

Speaker 1 9:35

Okay, so that's the planning side, looking ahead, making strategic decisions, whether through S&OP or the more advanced IBP. But then there's the other side, the execution side.

Speaker 2 9:44

Right S&OE or sales and operations execution.

Speaker 1 9:47

So what is S&OE all about, especially in a B2B context?

Speaker 2 9:51

S&OE is all about the here and now. We're going to be doing days and weeks, the short term, and the goal is to manage the day-to-day ups and downs, fluctuations in demand supply issues and making sure that what you actually do, the execution, matches up with those bigger strategic plans.

Speaker 1 10:06

So kind of like making sure the plan actually happens.

Speaker 2 10:09

Exactly and quickly resolving any problems that might pop up, especially those that could affect your customers.

Speaker 1 10:15

Okay, makes sense. So what does S&OE actually involve? What kind of things are people doing?

Speaker 2 10:21

So this is where it gets really operational. You're talking about detailed production scheduling, figuring out the logistics of getting products to customers, dealing with any supplier problems that might disrupt things, responding to last minute changes in orders and keeping a close eye on inventory levels.

Speaker 1 10:38

So it's the people on the ground actually making things happen Exactly, and who are those people? Typically In a B2B company who's doing the S&O-ing.

Speaker 2 10:45

Well, you'll have your operations teams, the folks running the production lines or delivering the services. You'll have logistics specialists who are getting those products to customers, especially important in B2B, where you might have complex shipping requirements.

Speaker 1 10:58

Right specialized shipments maybe.

Speaker 2 10:59

Exactly. Then you have your customer service reps. They're on the front lines dealing with any urgent issues and procurement. They're making sure you have the supplies you need, handling any disruptions.

Speaker 1 11:10

Okay, so a lot of different people involved, and do they meet as often as the planning teams?

Speaker 2 11:16

Even more so, often daily for the very short term, like the next few weeks, and then weekly for a slightly longer view, maybe out to 12 weeks.

Speaker 1 11:24

So it's much more fast-paced.

Speaker 2 11:25

Much more. It's about responding quickly to what's happening right now.

Speaker 1 11:29

Okay, so we've got these two distinct processes, different timeframes, different people involved. But going back to the beginning of our conversation, the blurring problem, how can a company tell if they're not keeping those boundaries clear? Yeah, what are the warning signs?

Speaker 2 11:43

Dude. Well, one of the biggest red flags is if your monthly S&OP meetings the ones meant for strategic planning constantly turn into discussions about operational issues.

Speaker 1 11:54

Right Firefighting.

Speaker 2 11:55

Exactly Like why is the shipment late? How do we deal with this sudden spike in demand? If your planning meeting feels more like a daily huddle to solve problems, that's a bad sign.

Speaker 1 12:06

It means those operational issues aren't being handled at the right level.

Speaker 2 12:10

Exactly.

Speaker 1 12:11

So that's one warning sign. What else should people be looking for?

S&OE: Managing Day-to-Day Operations

Speaker 2 12:14

Another big one is a shrinking planning horizon. If you're supposed to be looking 18 to 24 months out, but you're only focused on the current quarter, that's a problem. It means short-term pressures are taking over.

Speaker 1 12:27

Right, you're losing that long-term vision.

Speaker 2 12:29

And you might also see that senior leaders are less engaged in the planning meetings. They might skip them altogether.

Speaker 1 12:35

And I can see why.

Speaker 2 12:37

Right. Why would they waste their time talking about things that are frankly below their pay grade?

Speaker 1 12:41

Exactly. If it's all about tactical details, they're not going to be interested.

Speaker 2 12:44

And then there's the feeling of like being stuck in meeting overload, you know having the same conversations over and over again because those operational issues keep coming up.

Speaker 1 12:55

Yeah, I think we've all been there.

Speaker 2 12:57

And finally, you might see that important strategic decisions get delayed because everyone's so busy dealing with the urgent stuff.

Speaker 1 13:04

So basically, you're just constantly reacting instead of being proactive.

Speaker 2 13:07

Exactly.

Speaker 1 13:08

So if a company is seeing some of these signs, how do they know when it's time to move from a basic S&OP to that more mature IBP?

Speaker 2 13:16

That's a good question. Sometimes a well-run S&OP process is enough, especially for companies with simpler product lines or more predictable demand, but when things get more complex, that's when IBP becomes really important, Like if you're having trouble forecasting new product introductions or if your existing product portfolio is becoming a challenge. Ibp can help.

Speaker 1 13:37

Okay, so when the product landscape gets more complicated, what else?

Speaker 2 13:42

Well, if your financial forecasting isn't good enough to support your decision-making, IBP can help with that too. Or if you find that you're running your business based on annual budgets instead of a rolling plan, that's another sign that you might need IBP. And finally, if you're having trouble getting your senior leaders engaged in the planning process, IBP can really help with that.

Speaker 1 14:02

It sounds like a lot of companies could benefit from IBP.

Speaker 2 14:05

A lot of them could, especially in the B2B world, where things are constantly changing.

Speaker 1 14:09

So let's talk about the consequences then. What happens if a B2B company doesn't address this blurring between planning and execution? What are the risks?

Speaker 2 14:18

The consequences can be pretty serious.

Speaker 1 14:20

Yeah.

Speaker 2 14:20

One thing we see a lot is what we call planning myopia.

Speaker 1 14:25

That sounds bad it is?

Speaker 2 14:27

It means the company's planning horizon gets so short that they can only react to what's happening right now. They can't anticipate future trends or opportunity.

Speaker 1 14:35

Right, they're always in firefighting mode.

Speaker 2 14:37

Exactly. And then, of course, you have the leadership disengagement we talked about. Right, they just tune out Because they're not being challenged, and this can lead to decision paralysis, where the company struggles to make any long term decisions because they're so focused on the short term.

Speaker 1 14:51

And it affects the people too.

Speaker 2 14:52

Right, absolutely. You can have capability erosion, where people lose the skills they need for strategic planning because they're so busy with execution. And then there's process fatigue.

Speaker 1 15:03

Meeting overload yeah.

Warning Signs and Consequences

Speaker 2 15:05

People get burned out from all the meetings, they get cynical and productivity drops.

Speaker 1 15:10

It's definitely not a good environment to be in.

Speaker 2 15:13

No, it's not. And then there are broader business impacts. Well, you can fall into the quarterly earnings trap, where the the only thing that matters is hitting your short-term financial targets.

Speaker 1 15:24

Even if it hurts you in the long run.

Speaker 2 15:25

Exactly. You might cut back on important investments just to make this quarter look good, and this can lead to problems in the supply chain higher costs, lower profitability.

Speaker 1 15:36

And, ultimately, a company that's just reacting to everything instead of being in control right, always one step behind so not a good place to be, but luckily our Karama has a lot of experience helping companies navigate this.

Speaker 2 15:51

You guys been doing this for a while, right over 15 years actually, we've worked with a lot of b2b companies across different industries, helping them design, implement and run these processes S&OP, IBP, s≈am;oe.

Speaker 1 16:04

So you see it all.

Speaker 2 16:05

Pretty much, and our consultants have actually been in those roles themselves, so they understand the challenges firsthand. We don't just offer generic solutions.

Speaker 1 16:12

Right, it's tailored to each company.

Speaker 2 16:14

Exactly. We work with you to figure out the best way to set up these processes, to define those boundaries between planning and execution, and then manage them effectively.

Speaker 1 16:24

And it's not just about setting things up and then walking away, right?

Speaker 2 16:27

No, it's not. We have a do-it-with-you approach. We work closely with your teams, from the senior leaders all the way down to the front line, to make sure everyone understands the new processes and how they work.

Speaker 1 16:38

So you're really empowering them to own it.

Speaker 2 16:39

Exactly, and we see companies start to see improvements pretty quickly, sometimes within just three or four months.

Speaker 1 16:46

Wow, that's fast.

Speaker 2 16:47

It is, but the full benefits usually take a little longer, maybe six to 12 months, as the new ways of working become embedded in the company culture.

Speaker 1 16:56

So what are those benefits then? What does a company gain by having these clear, distinct processes?

Speaker 2 17:02

Oh, a lot. For one thing, the leaders can focus on the right things Strategic decisions for the executives, operational details for the people on the ground.

Speaker 1 17:11

Right. Everyone's working at the right level.

Speaker 2 17:13

And it creates a better balance between long-term planning and short-term execution. You're not just thinking about the next quarter, you're also thinking about where the business is going in the next few years.

Speaker 1 17:23

Right that long-term vision.

Speaker 2 17:25

And it also helps companies use their resources more effectively you know putting your money and your people where they'll have the biggest impact. And it reduces that duplication of effort, that meeting fatigue we talked about People aren't wasting time on things they shouldn't be dealing with and it also means that both planning and execution can do what they're supposed to do without interfering with each other.

Speaker 1 17:46

Right, they complement each other.

Speaker 2 17:47

Exactly. And then, importantly, the feedback from the execution side can actually inform the planning. So you're constantly learning and improving.

How Arkaro Helps Companies Succeed

Speaker 1 17:56

Okay, so it creates a feedback loop.

Speaker 2 17:58

Yeah, and ultimately it creates a feedback loop. Yeah, and ultimately it leads to better collaboration across the company, because everyone understands their role and how it fits into the bigger picture.

Speaker 1 18:07

So it's not about creating silos, it's about creating clarity.

Speaker 2 18:10

Exactly Clarity, focus, accountability, everyone working together towards the same goals.

Speaker 1 18:16

And that leads to better results.

Speaker 2 18:17

Absolutely Better planning, better execution and, ultimately, a more successful business.

Speaker 1 18:22

So for anyone listening who's seeing these signs, these blurred boundaries within their own B2B company, arcro can help right Absolutely. You've got a team of experienced consultants who can come in and help companies clarify those boundaries, mature their planning processes whether it's S&OP or IBP and really get those leaders re-engaged in the strategic conversations.

Speaker 2 18:43

Exactly. We work with you to develop a clear and effective way to manage these processes, tailored to your specific needs.

Speaker 1 18:50

Great. So where can people go to learn more about Arkaro?

Speaker 2 18:54

The best place to start is our website, arkaro. com. You can find lots of information there about our services and our approach. Okay, and we're also active on LinkedIn. You can connect with us there and stay up to date on the latest thinking and change and innovation.

Speaker 1 19:08

And what if someone wants to talk to someone directly to discuss their specific challenges?

Speaker 2 19:13

They can reach out to Mark Blackwell, our lead consultant for these kinds of projects.

Speaker 1 19:17

Okay, and what's his email address?

Speaker 2 19:18

It's mark@ Arkaro. com

Speaker 1 19:21

Perfect. Well, this has been a really insightful conversation. Thanks for joining us today and sharing your expertise.

Speaker 2 19:28

It's been my pleasure. Thanks for having me.

Speaker 1 19:30

Thanks for listening to the Arkaro Insights Podcast. We hope you found this deep dive helpful.

Speaker 2 19:35

We did too.

Speaker 1 19:36

And if you think your colleagues might also benefit from it, please share it with them.