Wednesday, August 09, 2006

Strategy vs. Operations

There's a saying in the military that amateurs talk strategy and that professionals talk logistics and operations. I think this adage also applies to the business world. Having a sound strategy is vital to any business but I have found that most people seriously underestimate the importance (and difficulty) of solid operations. By operations, I’m referring to the everyday blocking and tackling of marching goods and services from point A in the value chain to point B – nothing more than carrying out the business strategy as laid forth. MUCH easier said than done. While I don’t have data to back up this statement, I think many more companies fail because of poor execution than bad strategy. The bad strategy folks just get more press because it’s more interesting to talk about strategy than operations. Would you rather discuss what went wrong with or the U.S. auto industry?

Put another way, is operational excellence sufficient competitive advantage? I think it is.

I'm taking the liberty of substituting "operations" for "tactics." Tactical and strategic managers generally don't get along. However, tactics, in my opinion, is more of a survival effort than a business strategy. I guess truth is it's probably the best path for most companies. Sure, blind strategerie is useless without competent tactics, but you can’t lead with tactics alone. You can survive, but not thrive.
Yes, but if you get mired in the tactical aspects of executing and never pick your head out of the sand to survey the landscape, you end up executing all the time, reacting to events and deviating from said strategy. I argue you can't even "survive" because you will let others determine the strategy that you will react to. Just a thought.
Strategy and Operations are just different ends of the same needle. Good strategy lets us know not only what we should sew but also what we are not sewing. Great operations work best with clear parameters and the ability to select the best stitch within those parameters. Dumb down either end and you are sewing with soap
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