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 10person 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.