'Post-it' sticker reengineering of a forecasting process

Extract from David Parmenter's toolkit "How to Implement Quarterly Rolling Forecasting and Quarterly Rolling Planning – and get it right first time."

Modernising your forecasting process can be a complex and expensive task or a relatively easy one. The choice is yours. Many organisations start by bringing in consultants to map the existing forecasting procedures. This is a futile exercise as why spend much money documenting a process you are about to alter radically, and when the documentation is done only the consultants will understand the resulting data-flow diagrams!

The answer is to “Post-it” re-engineer your forecasting procedures in a workshop; see Exhibit 1 below, (the complete Etemplate comes with the toolkit)

Some tips on running a ‘post-it’ re-engineering session

Stage 1: Invitation

Having set the date, get the CEO on board and ask them to send out the invites. The finance team needs to send out instructions a week or so prior to the workshop, outlining how each team is to prepare their Post-it stickers, see Exhibit 2.

Exhibit 2: Post-it re-engineering instructions to be sent out to attendees a week prior to the workshop

Set up a schedule to ensure all the main teams have a unique colour of Post-it sticker.

Stage 2: Standing around the whiteboard

In a classroom setting go through the agenda items, starting with an introduction to best practice. When you get to the stage in the agenda for the Post-it re-engineering you ask a representative of each team to place the “Post-its” in time order under column headings Week-1 Week +1 Week+2, and so forth using a whiteboard. When all the post-it stickers are on the whiteboard, it will look like Exhibit 10.5.

Then remove all the work tables, near the whiteboard and ask all the staff present to come to the whiteboard, standing in semi-circles, hopefully with the “height challenged” staff at the front. The standing-up is critical as it brings everybody in sight of the stickers and, more importantly, as the meeting progresses, ensures swifter and swifter agreement as nobody will enjoy standing for over 2 hours.

Stage 3: Missing processes

Then you ask, “What is still missing from the list?” There will always be a forgotten process. I probe until at least two additional processes are put on the board and I ask each person in turn to acknowledge that they agree that the whiteboard represents all the processes.

Stage 4: Removal of any duplication

I then ask, “What processes have two stickers when there should only be one?” You remove these duplicated stickers.

Stage 5: Abandonment

We then ask, “What processes do we not need to do anymore and therefore should abandon?” There is often a pause here as staff look bewildered. Why would we do something that was not required they all are thinking. At this stage, I talk about Peter Drucker, the great management thinker’s abandonment philosophy (read earlier article).

I recommend that you buy a dozen movie vouchers before the workshop so you can give one to every attendee who points out a process that can be removed as it is not necessary (the process was done because it was done last month)—each procedure that is removed is like finding gold because it means less work, fewer steps. After the first movie ticket handout, you will notice a greater focus from the attendees!

I will spend up to two hours to ensure all the superfluous processes are removed.

Stage 6: Rescheduling activities

Reorganize the key processes and bottlenecks based on better practice (e.g., the foundation stones and features of QRF) and now reschedule tasks that can be done earlier. You will find it hard to justify an annual planning process longer than two weeks.

With each rescheduling of a process, it is important to seek consensus. Invariably, some members of the team will believe the world will end if the cut-off is moved earlier. I simply question the logic and allow a dissenting group to have their objections noted. I then move the sticker to where the majority have agreed, see Exhibit 4.

After 45 minutes of standing these disagreements will recede due to peer pressure.

Exhibit 4: Moving the bottlenecks to the earliest time they can be completed (example of a month-end re-engineering)

Stage 7: Spreading the load

Look at the processes in Week-1and Week+1, as you may have too many. Move the non-time critical ones between Week-2 and Week+2 to better spread the workload.

Document the “Post-it” stickers on a spreadsheet. This is the only record you need. Any person, who for health reasons, cannot stand, can be assigned this documentation process.

You will find it hard to justify a rolling forecast taking longer than any day +5! You can review a YouTube video of me demonstrating a ‘post-it re-engineering exercise on https://cfo.davidparmenter.com/?s=YouTube.

For The Etemplates around this process purchase my toolkit "How to Implement Quarterly Rolling Forecasting and Quarterly Rolling Planning – and get it right first time."