Cultural differences need to be addressed in global S&OP

The success of international Sales & Operations Planning (S&OP) depends on, among other things, how well a company adapts to the local culture when developing and implementing it. Cultural issues are important. We may be able to change the culture of a company, but not the culture of a country. By Niels Van Hove

Once a company starts crossing national borders, other complexities enter the process of Sales & Operations Planning. Cultural issues become even more significant; people in one geographic area prefer their culture to others. There is no right or wrong national culture, but it is important to understand preferences. It is also important to know that many leadership and business theories have been developed in the West under the assumption that they are universally applicable, which is not the case. The same holds for the S&OP process. National culture often plays a significant part in the way people think and behave. Research in this area shows that the best results can be achieved if the process is adapted to the local culture.

Each country preference has an impact on how leaders in different countries create a trusting and respectful environment. With that in mind, we have to decide how to deal with the key S&OP behavioural issues like open and honest communication, transparency, conflict resolution, maintaining discipline, and coaching others. From my western perspective and experience, I will show what those differences are and how to deal with them.

Open and honest communication

In my 2011 S&OP pulse check, I found the key to success in S&OP comes from improvements in cross-functional communication. Communication in S&OP meetings needs to be open, transparent, and honest to bring all issues and information to the table. When working across geographies, leaders have to take into account how each culture prefers to communicate. In S&OP meetings, we have to ask and answer questions to arrive at a consensus.

Generally, there are two ways that people in different cultures ask or respond to a question. For example, the American and Dutch cultures get directly to the point in asking as well as in answering a question. In other geographies (like Southern Europe, Asia, and Japan), people tend to circle around the point before asking or answering a question. One culture wants to get straight to the point but the other perceives that to be too direct, impersonal, and pushy. Such differences may stand in the way of making progress, thereby making the process less effective. The best way to work in such an environment is to keep in mind what is perceived to be best in the culture you are dealing with.

Niels Van Hove is the Manager of Integrated Business Planning at Don KRC in Australia, a division of George Weston Foods.

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