Nobody likes bad news. It is difficult to deliver and more difficult to be accepted. And as the messenger, delivering the bad news of lower forecasts can make our job as forecasters and planners very difficult.

Companies regularly experience setbacks such as low sales, competitor advantage, out of stocks etc. While these situations sometimes are inevitable, how the message is delivered and what happens next is more important than the actual bad news itself. For a Demand Forecaster or a Demand Planning Manager who has the responsibility to communicate demand numbers to the company, this presents a challenge.

To deliver bad news effectively, demand planners can adopt the following approach:

1 -Be Factual

It is important that the forecast was arrived at through a scientific, systematic and proven methodology. The forecast should be robust enough to erase doubts and to make acceptability easy. This means that the forecaster should be able to explain and demonstrate the steps leading to the buildup of the numbers. The assumptions must be based on known historical facts and planned proven activities such as discounts, promos, trade deals etc. Putting forward assumptions you cannot back up will not help in this situation.

2 – Call out the Gaps

A deep dive analysis must be done to ascertain the root cause of the lower forecast. This is essential because it helps to show what exactly caused the drop in the numbers and why. This should be numerical and the gap should be represented in terms of volumes and values.

3 – Get Alignment On The Lower Number Beforehand

This is where the demand forecaster will need to collaborate with stakeholders in Sales and Marketing ahead of the S&OP meeting to agree that every possible avenue has been considered before arriving at the conclusion that the lower number is the most realistic forecast. This prior alignment is essential as it supports your message in the meeting and helps to encourage acceptance of the lower number.

4 -Prepare Your Presentation & The Delivery

Prepare a presentation that contains valid information. Thoroughly check your information and ensure every piece of data is accurate and not misleading. Stay focused by avoiding irrelevant information, even if it is correct – you don’t want to bombard your audience with information that will disengage them or raise doubt in their minds. The content must demonstrate your understanding of the industry, market and internal business. The presentation must be concise and straight to the point. Remember to rehearse the delivery – adequate preparation is key. Anticipate possible questions and have the answers ready. This is important because you don’t want to be searching through files in the middle of the presentation as that is a turn off and erodes confidence in the presenter.

5 – Deliver The Message Clearly

Finally, the message must be delivered unambiguously. During the presentation, maintain reassuring eye contact from time to time with the audience and keep them engaged. Speak through the slides without regularly looking on the board. Do not be the only one to speak the whole time, and allow/create time for comments, questions and interactions.

Guide the conversation through a path that prompts the audience to ask probing questions, voice their concerns and state their doubts. Answer every question and address all concerns as they relate to the process of arriving at the forecast. Allow the Sales and Marketing stakeholders to speak on concerns specific to their areas. Since you have pre-aligned with them, their concurrence will only validate your position and boost the confidence of executives regarding your lower forecast.

6 – One Valuable, Final Tip

It is important that any known potential to increase the forecast should be mentioned no matter how minute is the probability of occurrence.

The above approach, when effectively and judicially employed, will bring all stakeholders to the point of acceptance of the numbers.

Ugo will speaking on career mapping for demand planners at IBF’s Business Planning, Forecasting & S&OP Conference in Amsterdam from November 20-22, 2019. She will reveal how S&OP and planning professionals can manage their careers to get to the C-suite by leveraging their cross-functional experience and business acumen. Join Ugo and a host of planning, supply chain and analytics leaders at the biggest event of its kind in Europe.