К основному контенту

It's crucial for managers to know the difference between operations and strategy! Are you a manger? Check yourself then:

     Different management tools ( management of quality, staff performance evaluation, exporting and importing, partner's collaboration, engineering, etc) that we use to enhance and improve the operational effectiveness of a company, very often CAN'T provide a sustainable profitability for the company. Did you faced or observed such situations in the company you run or work in?

     If yes, then I thing the main cause of that is based on your manager's capability to distinguish operational effectiveness and strategy. Operational management is different from the strategical one. The operational processes and tools have another purpose then the strategic ones.

    Strategical management is about choosing what we want to achieve and why? "Strategy is more about choosing a unique and valuable position rooted in systems of activities", - affirmed Michael E. Porter in the "Harvard Business Review". Strategy management is a decision making process, based on companies potential (resources, culture, etc) and market demand or tendencies. Managers take the general decisions about their company's direction of development in long run and what result should be achieved in each department or sphere of the company. For example if your company have a major goal to extend the product in Eastern Europe every single department should align their activities for this major goal. Thus, strategy requires continuous discipline and clear communication. General management should define and communicate the core company’s unique position, make trade-offs, and forge fit among the various activities of the company. Further, the leader should decide which changes in the industry and customer demands, is the company going to respond to. The leader should be able to teach others in the organization about strategy - and to say no sometimes.

    Operational management is about how to do that? "Operational improvements have resulted, but rarely have these gains translated into sustainable profitability",- stated Porter. Because operational management is more about processes that can assure result, then a specific result,defined by strategy. Let's say, by the strategy of extension in Eastern Europe the strategy established to sale your product at least in 2 towns of each Eastern Europe state in total cost of 50 000$ a month. Your marketing department analyse potential in each country and each city, your business development department is developing action plan of negotiations with potential shops or markets, your logistic department assure the supplying channels and your quality management department will control the quality of the product before the delivery and after. All the main decisions regarding their particular goals are also part of the strategy, but how they will do that- is part of operations. Let's say, logistic department is looking for the best way of delivery. In this case research, calls, negotiations, contracts - it will be part of operations.

     In conclusion, Strategy should guide employees in making choices what we want to achieve, tactics or operations is more about how we will achieve this.


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