Tuesday, February 23, 2010

Operational effectiveness is not a strategy

2009 found all of us tightening our belts, "reallocating" resources, and finding inventive ways to do more with less. We had to; it was a matter of survival during a crisis. By now, you're probably operating pretty close to the bone, so if there's nothing left to cut, where do you go from here?

A recent article by Tim Laseter at Strategy-Business.com suggests that the answer is to shift focus from operational efficiencies to operational strategy.

Quoting author Michael Porter, Laseter offers this definition of strategy: Strategy is " 'the creation of a unique and valuable position, involving a different set of activities.' He also noted that 'strategy is making trade-offs in competing' — including 'choosing what not to do.' Finally, he emphasized the importance of fit among a company’s activities: 'The success of a strategy depends on doing many things well — not just a few — and integrating among them.' "

Laseter states that, "An operations strategy should guide the structural decisions and the evolution of operational capabilities needed to achieve the desired competitive position of the company as a whole" and in the article (free registration required for access) he goes on to list and discuss key structural decisions as well as operational capabilities.

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