A Blurring of the Lines
Some time ago (in that ancient world that was pre-pandemic) I posted on how I was seeing a blurring of the lines between strategy and operations.
A critical component of strategy is, of course, the creating of new capabilities or the enhancing of existing ones, so to reach set strategic goals. I wrote that organizations will be looking to operationalize these new or enhanced capabilities much quicker than yesteryear, so there would need to be a better alignment of strategy and operations and a better management of the linkages.
This need has been turbocharged by the pandemic and subsequent economic shocks.
The Execution Premium
Turbocharged, perhaps, but as far back as 2008, in their seminal book The Execution Premium: linking strategy to operations for competitive advantage, Drs. Kaplan and Norton provided a step-by-step process for creating strategy/operations linkages. This was encapsulated in the framework for the Execution Premium Process (XPP). Sadly, from my experience, in applying the XPP, few organizations have really understood the operations piece (the clue is in the book title).
Little Interest in Strategy Right Now
I have noticed a number of posts on Linkedin recently, encouraging organizations not to forget about strategy in these testing economic times.
The economies of most nations are struggling right now and the organizational priority is firefighting and keeping the lights on – very true here in the UK (except for the oil and gas giants, but that’s another story). Long-term planning, which is how strategy is generally perceived, is simply put on the backburner – we will get back to this when times are better (not sure when that will be by the way – I believe economic shocks are now simply the everyday norm).
Herein lies a big part of the problem. Strategy is seen as “long-term planning.” It is thinking three or five years ahead. It has little to do with today and therefore of little use in coping with the short-term economic struggles.
And perhaps, just perhaps, some organizations are becoming reluctant to do long-term planning simply because in this the age of uncertainty, when things change all the time and in unexpected ways, doing exhaustive and detailed long-term plans is now seen as a pointless exercise. Many are getting this, if not as yet expressing it.
I would certainly agree it is a pointless effort – so why spend a huge of money on consultancy support here?
A Fundamental Shift in Thinking
Within previous articles and posts, I have argued for a shift in conventional thinking away from writing detailed long-term strategic plans to focusing more attention on shorter-term horizons.
Yes, we should keep a longer-term vision – a true north if you will – which describes the destination the organization wishes to reach at a future date. But there are many roads to the same destination. A detailed strategic plan and roadmap might limit the organization is one road. Not a good idea for any journey.
The strategic plan should be a short document with a high-level explanation of why this strategy had been chosen, the key goals, and the critical capabilities that will be built to achieve the goals.. I would also include the Corporate Level Balanced Scorecard System (emphasising the key strategic initiatives that will be implemented)– the “how” we will do this and monitor progress.
That any part of this strategic plan might change along the way (taking a different road), should be made clear – after all, strategy is a set of assumptions that must be verified in execution, as I often write.
I would end the annual strategy refresh. Strategies can be updated at any time, be that simply tweaked (if one or more of the assumptions that underpin the strategy are proven not to be correct, or less impactful than believed) or more fundamentally overhauled if the world has changed significantly. This is more a mindset challenge than one of process.
How to Describe the Strategy/Operational Linkages
But here is where my thinking is still evolving (it always will, as I will never be so arrogant or stupid as to believe I have found the “perfect” solution).
Although the terms strategy management and operations management still make sense, we do not have an established term, or process, to describe and manage the linkages. If not described how can we effectively manage this?
“Strategic Operations” seems a bit of an odd term. but in managing the linkages between strategy and operations we are looking for the strategically critical processes – and yes, Kaplan and Norton explained this very well in the Execution Premium.
So we do need a term, I believe. Feedback on this would be welcome.
Personally I am becoming less and less comfortable with positioning myself as a Strategy Advisor. I don’t think that long-term planning is essentially what I do, but rather shorter-term, sequential, execution to the backdrop of a longer-term strategic horizon.
In these shorter-term execution phases, I look at managing the linkages between strategy and operations – what are the key strategic operational processes here?, do we need a strategic initiative to improve these or the inculcation of a strategic process improvement program? Again Drs Kaplan and Norton explained how to do this very well in the Execution Premium.
In execution it is also important to take into account the inter-dependencies between various implementation efforts going on (no initiative or improvement effort should be implemented in a silo) and their impacts.
There is always a danger that succeeding with one intervention negatively impacts another intervention or even other parts of the organization – unintended consequences is something organizational leaders should be better aware of.
Also, through excellent organizational data analytics capabilities we need to keep an eye on the external environment and ensure that the capabilities are in place to quickly recalibrate the internal workings of the organization to stay aligned with external movements (certainly as much operational as strategic).
These are painful times for organizations, but pain often forces fundamental change.
Many new breakthrough ideas, solutions and frameworks will be put forward for transforming organizations for this new reality.
I, for one, am excited about the prospect of reading these new approaches. Many will be very impactful, some marginally so and some will simply go nowhere.
In the research for my co-authored book with Alberto Manzo, The Adaptive Organization: synchronizing the enterprise for success in the age of uncertainty (working title), we are looking at how the various parts of the organizational ecosystem can better work together to create a new working dynamic. External/Internal, and the rethinking of strategy, structure, internal and external working relationships, etc.
During the interview phase, many great ideas are being contributed by excellent minds.
This is certainly the time for new thinking. This is happening and we will witness the most far-reaching shift in thinking about how work gets done since the emergence of the factory-based manufacturing systems in the early decades of the 20th century. That was a fundamental structural, process and mindset change. Such a radical shift in organizational manage is what we soon see. How challenging and exciting is that?
James Creelman is Director of the UK-based Cardinal Management Consulting, an Associate Director of Strategia Worldwide and the Strategy Management Practice Lead for Impact Consulting.
He is the author of 25 books and is currently co-authoring The Adaptive Organization: synchronizing the enterprise for success in the age of uncertainty (working title).
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