Operational Strategy: What It Is and Why It Is Important

We have been talking about business strategy from a number of perspectives this year – strategic planning, sales strategy, and financial strategy. In this blog we will explore operational strategy and what it involves. With the economy in flux and businesses shifting over from temporary COVID adjustments and remote work, it’s vital that your company leadership considers how your business operations mesh with your company’s mission and goals.

What Is Operational Strategy?

Operational strategy is a set of decisions a company or organization makes regarding the production and delivery of its goods or services. This strategy should work closely with the company’s business strategy, helping it to advance its goals and improve itself to become more efficient and profitable over time.

Specifically, operational strategy is the process of deciding how the company will allocate its resources to best reach its goals. This means that the first part of operational strategy is defining those goals. This should flow naturally from the company’s overall strategy. It’s crucial that the operations manager and his staff are familiar with those goals and objectives for both the short and longer term.

What about resources? We usually conceptualize resources as supplies and funding. Those are certainly important, but human capital is vital as well. Every successful company relies on its people to execute its goals, whether that’s delivering pizzas or manufacturing self-driving vehicles. If the company doesn’t recruit and retain good people, having well defined goals and strategies are useless.

A good operations manager makes sure that the company is always looking for skilled, capable people and training the ones it already has to become more effective. He also makes sure that they are in the right positions to help the company achieve its stated goals.

Processes, Procedures, and Technology

Creating business processes is also a part of operations management. Too many companies do not examine how their employees do their tasks in order to make those tasks more efficient, less resource dependent, and safer. Sometimes this kind of examination leads to changing an entire production process. It might also suggest that some tasks can be automated without sacrificing quality. Ultimately, an effective process will improve the way employees work, improve the company’s overall operation, and make it more profitable over time.

Putting procedures into place on a company-wide level ensures that everyone in the company understands how their jobs are supposed to be done but also performs them in the way the company has decided is best.

Another aspect of operational strategy is implementing technology to improve processes and worker effectiveness. This might mean adding communication tools or supervising employees remotely via cameras. It can mean automating jobs that might entail risk if people perform them instead of machines. Deciding which types of technological tools are best for the job and will have the maximum ROI is the job of the operations manager.

Finally, operational strategy involves looking for improvements that will make operations run more smoothly and efficiently as time passes and benchmarks are measured. This will involve interpreting collected data to determine how well the company is performing and creating reports to share with the company’s management and its board of directors.

Challenges for Operational Strategy

As with everything else, the more organized your company leadership is and the more specific the goals and benchmarks you have identified are, the better you will be able to evaluate your success and fine tune it for improvement. Unfortunately, even with the best organization, there can be challenges. Last minute deadlines or demands from customers can create unprofitable distractions. Economy-wide problems like supply shortages can upend operations. We’ve all seen in the past two years that sometimes things cannot be predicted. We have to be willing to pivot and get creative to continue to meet company goals and still accommodate the needs of customers and employees.

However, with a solid operational strategy in place, your company will be able to better predict upcoming market conditions and challenges and brainstorm how you will handle them and continue delivering to your customers. It’s an investment of time and talent to plan this upfront, but it will pay over the long run when you do not have to come up with solutions on the fly or hope and pray that the next quarter’s numbers will be better.

If you would like help planning your company’s operational strategy, Prometis Partners is available to answer your questions. Call us today with your business challenge.

 

Vincent Mastrovito

Vincent Mastrovito

[email protected]
(616) 622-3070
250 Monroe Ave. NW, Suite 400 
Grand Rapids, MI, 49503

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