Thursday, October 15, 2009

Art of shooting Sandbaggers!

Now is the business planning time in most global companies. First cut plan should have been delivered by now. The yearly business planning process is an iterative approach to arrive at an agreed future scenario of the business climate and results the organization can expect from different functions. However it is easier said than done to arrive at this agreement as depending on how safe or how risky you want to play the reference point can be different. There are also the seasoned Sandbaggers who exist in all functions to justify why it is not as good as others think it maybe.
I have found that shooting at Sandbaggers is an interesting psychological game in the process and it is not necessary sharp shooters win.
There are some general signs of Sandbagging which will exist and I quote a few for those who are interested to master this art better. I cover all functions to be democratic.
1) Though the last three months results are better than plan and next quarter of this year is also better in terms of order book next year is not going to be a steep uptrend. The competition is already showing signs of starting a price war as there is excess capacity in market and customers are moving quickly to grab the opportunity. The special government policy support will go. Interest rates will go up and confidence will taper. As per XXX report this is confirmed..the graphs are indicating slowing down next year. Inspite of all this we have taken an aggressive 3.7% growth assuming we will gain new business, gain share etc. This is the general Sales pitch.
2) The commodity markets are strengthening. Suppliers are getting desperate. They cannot sustain this low volumes and there is no economies of scale. Overall we will see increases in costs next year at increased pace. Clearly we are moving away from buyers to sellers market with demand upturns. This is the general purchasing pitch.
3) The mix is adverse next year. We will increase flexibility but reduce scale effects of manufacturing. We have already got the benefits of lean initiatives and other low hanging fruits. The results at best can be as of this year. This will be the general manufacturing pitch.
What are the ways to shoot Sandbaggers...the styles are different with different outcomes depending on the culture of the company but here are some general recommended styles.
1) Listen patiently and empathize. In the end say " Inspite of all what you say there seems to be an opportunity to improve here and optimize there". Give an objective of improvement and be sure they will come close to this.
2) Prepare a counter with specifics and show it without elaborating. Make a polite but cynical comment that during Business plan time such reports do miss our eyes.
Then state that we need to deliver so much and find a way to do this.
3) Shoot sharp when presenting. Say that you started to believe that the person is a pessimist. Don't allow to complete the presentation (by finding too many holes) and in the end say " You know what to do..try to change my opinion so that I believe that you are an optimist".
But expert Sandbaggers are able to deflect any style and be sure that they exist in every organization in good proportions. Not to worry that if there is no safety you will end up overstating and underachieving...we can never get all safety out.

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