Operations Strategy? What Operations Strategy?
May 19, 2015
Have you ever asked a simple question in professional conversation with someone and experienced that unmistakably embarrassing look on their face like they just realized they forgot to pick their kids up from the mall? I seem to get that whenever I ask someone to point me to their Operations Strategy.
Why aren’t more people talking about Operations Strategy? Seriously, it’s the nerve center of any company. It’s what takes the message from the brain (corporate strategy), translates it and makes sure the muscles (people and process) perform what the brain intended. The loose amalgam of definitions (interpretations) of the term when Googled indicates that it’s neither popular nor understood. I think it’s possible most are simply overlooking it.
But why is something so important to enacting critical change in an organization being overlooked so rampantly?
a. Anything within a two-word radius of the word “strategy” is inexplicably elusive, sometimes, by design.
b. It’s not as sexy as corporate strategy – not even in the top 10!
c. It’s been pushed deep down into the darker, nerdier realms of middle management.
d. Ego: “Execution is below me, the workers do that stuff.”
e. We’ve lasted this long without it.
f. CXO’s are “pretty sure we have that covered.”
g. Business schools focus 1/30th of the time spent on strategy talking about how to plan for operationalizing it.
Answer: All of the above.
This is a shame and a little odd to me because Operations Strategy is the part our transformation clients are realizing they’re valuing the most. Why? Many reasons.
a. Because they’re starving for anything to help figure out how to build a plan that clearly specifies how their department should allocate resources to support something dynamic… something that changes all the time… something that’s adaptive and that won’t require a total overhaul next year.
b. They’re interested in developing a roadmap that draws a clear line from corporate strategy down into process, team organization, infrastructure and into systems and tools.
c. Big “S” strategy is not their concern. They’ve already figured out what their whole company needs to do to please the market and the board of directors.
d. Operations strategy is where the rubber hits the roadmap and where ideas come to be operationalized.
What I hear our clients say most is that Operations Strategy is where leaders have to make changes that affect people, processes and money-which is really hard to figure out. It requires the design, integration and governance of structured accountability and measurement. It requires changes in how leaders view and uphold priorities. And to fully realize a great Operations Strategy, you often need to make changes to your culture to get the people doing the work to internalize why they’re doing it in the first place—far beyond the paycheck.
Operations Strategy, when avoided, keeps average companies deep within the status quo. Change sucks, and it hurts even more when you don’t know how to do it.
So how do we understand Operations Strategy? What is it’s essence? Here is how I get my clients to both understand and appreciate it. I’ll try to paint a picture of how I look at it.
Operations Strategy spans the gap between strategy and execution. To grossly oversimplify, let’s say there are two major types of strategy we’re talking about here. The first is a fairly precise group of words that determine what direction you’re going to take (which should include what you’re not going to do). This, we’ll call Corporate Strategy.
The second is even more precise groups of words that detail how are you going to use the resources, processes and technologies to accomplish Corporate Strategy (which includes how are you not going to use resources to get the best things accomplished). This is called Operations Strategy.
What we’ve been learning lately, alongside our clients, is how daunting a task it is for companies to organize their resources internally to accomplish the things that corporate strategy needs done. What’s daunting specifically is the how behind the what. But it doesn’t need to be daunting. With a clear and aligned Operations Strategy the how can be road mapped with piercing clarity and allow for adaptivity as well.
Let’s look at a real example. We have a client that has many internal groups with multiple massive and silo’d websites, all of which they want to update – independently of one another. The reason that they want to keep their respective streams separate is that each of them lack trust in all the other groups to focus on what is most important in the attainment of their individual goals. While they’d love to focus holistically on their customer, they have what feels to them nearly unattainable revenue targets to hit as the only thing their silo has resources upon which to focus. And each of the silos know they’re practicing an inside-out (my department goals come before the customer) as opposed to an outside-in (my customer comes before my department) approach. But they feel they have no choice.
What we’re helping them do is meet in the middle and create an Operations Strategy as a way to consolidate independent objectives into one unified approach so they can effectively meet customer experience standards and their individual revenue targets. In fact, we’re confident that by switching focus from inside-out, to outside-in, the revenue goals will actually be more attainable going forward. Which is why we were engaged to help them.
So, where does an Operations Strategy fit within an organization? And how is it used? An Operating Strategy is your Chief Operating Officers playbook. And she uses it to ensure the organization is doing all the right things at the right times with the right resources to get the organization’s work done. She uses the Operations Strategy to create alignment between the Corporate Strategy and the employees (vertical alignment) while simultaneously creating alignment between the processes and the customers (horizontal alignment). If you own a car, you know things fall out of alignment and need to be constantly re-aligned. So is the case of an organization. The organization’s Operations Strategy deals with persistent organizational alignment challenges. In fact, “alignment” is the elusive silver bullet in change management if there ever was one.
The genericized image below illustrates many things. However the most important is the relationship of an Operations Strategy to Corporate Strategy and their relationship to the two axes that require persistent alignment.
*the map above is a modified excerpt from George Labovitz and Victor Rosansky’s 2012 book entitled Rapid Realignment (an awesome book!)
With respect to both the horizontal and vertical axes, you will notice the four internal vectors (Measurement, Prioritization, Culture, and Leadership) that are sometimes enablers, and sometimes they’re inhibitors. In any case, they need to be reconciled with the alignment challenge or alignment will not happen. Lastly, you’ll notice that the gray box shows the area most Operations Strategies cover. It includes the Corporate Strategy, and the other alignment elements and results in outputs we call Critical Success Factors, each of which has tactics and corresponding metrics to keep all the work strategically relevant and all the people accountable.
In the case of our client, they had neither horizontal nor vertical alignment organizationally to unify their enterprise web efforts to the benefit of their customers’ experience, let alone a unified Operations Strategy. Their internal organization didn’t know what to do operationally and in what order to satisfactorily accomplish what they need to accomplish because their concerns were isolated in four separate buckets and directed by four independent agendas.
They felt they had that first kind of strategy I talked about above (Corporate Strategy) done and I wouldn’t disagree with them. However they didn’t have that second part—the Operations Strategy—in place to accomplish any of it. In effect they were suffering a stalemate. Ten powerful people with four great strategic ideas that would have never been accomplished effectively or within any reasonable timeframe.
So what have we learned? What should you do with this information?
- Let this be a little call to arms. Go back to your Chief Operating Officer; ask her to see the big Operations Strategy. Ask her how you can help her realize it’s full potential.
- Create your own strategic alignment illustration and invite your teams to comment on what the specific alignment challenges are.
- Detail your Critical Success Factors (maybe you have 10, maybe 110. But list out at least one tactic per factor and at least one metric per tactic.)
- Explore the four internal vectors (Measurement, Prioritization, Culture, and Leadership). Determine if they’re enablers or retardants. List out what your organization needs to do to move all internal vectors from inhibitors to liberators.