I was having a discussion the other day where this question came up. Does the fact that a company needs Response Management – the ability to respond quickly and effectively to unexpected changes – indicate that they do a poor job of planning?

Well, in the most theoretical case, I guess it does. Why? Because if you had perfect planning you would have planned and accounted for every potential unexpected event in the first place, rendering obsolote the need for a strategic Response Management solution.

But, back on earth, I’ve never come across a company where this is reality (I guess there are companies that are so static and predictable that you could approach this theoretical scenario – but just not the companies we deal with). We’re fortunate enough to work with some of the best companies in the world – truly global leaders in their fields and companies that are renowned for their planning and execution. Yet, they’ve all come to us with a common need to enhance their ability to respond to change. Why?

I see two primary reasons. The first is that all the market forces are driving increasing change – from increasing demand volatility driven by buyer behavior changes and increasing competition to shorter product lifecycles because of increasing innovation and market pressures to extended supply networks that have more moving parts and more risk. The second is that the traditional systems were not designed for this problem. ERP and supply chain planning systems were designed to help the business run like clockwork. They are either transaction-based or focused on optimizing a ‘fixed’ set of assumptions.

The reality today is that companies need to compete through their excellence in dealing with the business when it doesn’t run like clockwork. There is no way to build the perfect plan, so companies that want to lead need to deal with the realities of imperfection in the planning process. While planning and execution systems focused on automating processes in part by removing people from the equation, Response Management systems bring people into the response processes to leverage the unique insights and judgment they have in determing the appropriate tradeoffs and course corrections that need to be made to respond to the unexpected.

I really believe there are two separate issues here. Companies will continue to need to be good at planning, but the value of these efforts will increasingly be over longer time horizons. There’s a growing need for Response Management solutions that empower people to respond to the unexpected that is becoming the key to competitive success. So, the need for Response Management doesn’t indicate poor planning, it indicates an understanding of the dynamics driving competitive positioning today and is a growing strategic asset that compliments strong planning.

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Posted in Best practices, Response Management
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