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Strategy-Driven Operational Change
The business
press and Wall Street analysts are great fans of strategy-driven
organizations. And for a good reason: strategy-driven companies are
the organizations that consistently post the best numbers and build
shareholder value. No CEO in today's world is going to be heard in a
quarterly earnings release saying, "We really didn't have a strategy
in mind; we just tried some things and it worked out." At the
corporate level, strategy is without a doubt a key concern of the
C-suite in most organizations, and it is often centered on markets,
products, and distribution.
In our work
with clients, we are finding that what works at the corporate level
for markets and distribution is just as key in successful
operational improvement efforts. Operational strategy is as
important to process improvement as marketing strategy is to market
share gain. More and more of our operational improvement work with
clients involves setting or resetting operational strategies. It
requires time up-front on a project, but consistently has had
significant payoff as the project moves forward. A quote from Sun
Tzu seems to fit well: "Strategy without tactics is a slow route to
victory. Tactics without strategy is the quickest way to
defeat."
Any change
effort that is going to succeed will be goal-driven—lower the error
rate by "x" percent, improve the cycle time to "y" days, lower the
unit cost to "z" dollars. A strategy-driven change effort is
deliberate about the whys behind those goals and takes a balanced
perspective. Often, we use the four elements of the Balanced
Scorecard concept as a framework for developing operational
strategy—Financial, Customer, Process, and People. We aim to produce
an operating strategy document that has about 10 bullet points
covering those four areas, clearly and concisely describing the
desired future state. Attached to those bullet points should be the
stretch goals or metrics of success.
Charging an
improvement team with producing change that will achieve a new
operating strategy and related stretch goals is invigorating for the
participants. It creates a much more impactful dynamic than that
dreaded Dilbert-like statement "think outside the box." It outlines
a new box and asks the team to build it out. It leads to operational
change that is more often transformational than
incremental.
Key factors to
keep in mind in pursuing a strategy-driven operational change
effort:
- Strategic thinking is, unfortunately, scarce in many
operational areas. They will need senior executive help in this
fuzzy area. Spend the time; the ultimate impact on the business
will make it time well spent.
- There is always an operational strategy in effect. It may not
be on paper or on the walls in poster format, but it is there and
probably so deeply engrained that it is called "our culture" or
"the way we operate." Depending on how long that strategy has been
in place, you may have to first back up and document it in order to
move forward.
- Two-day, off-site meetings produce meaningful strategy only by
accident. Lots and lots of conversation and debate go into the
blueprint of any impactful strategic change.
- When it comes to operational improvement efforts and
strategy-driven change, size does not matter. We have seen it work
in a 10-person producer licensing and contracting function, a
900-person call center, and a Fortune 500 company's
cross-functional, enterprise-wide effort.
Our view is not
that strategy-driven operational change effort is the new silver
bullet. It has been happening in many organizations for years.
Tightly focused change efforts around essential metrics have their
place in the portfolio of the many ways to produce change. But the
next time you're thinking about attempting an operational change, if
you are not already doing it, consider resetting the operating
strategy as part of the effort.
If you would
like to further this discussion, e-mail me.
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