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Strategic Planning or Operational Effectiveness: What's the Right Course of Action?
Strategic planning is making a comeback in corporate America. Relax. It's not the hypothetical, unmanageable process we remember from fifteen years ago, when corporate planners created impressive reports and analyses no executive read, let alone implemented. Today, strategic planning models reflect the real world. They are flexible, adaptive evolutionary. You say, "I'm not convinced. So what! Strategic planning is back in vogue. I'm too busy implementing reengineering and continuous improvement efforts to worry about strategy. And, just to set the record straight, those initiatives are getting some decent results. Not the productivity windfall I expected, but results nonetheless."
Here are a few interesting tidbits that may change your mind. The Japanese were the leaders in creating operational effectiveness. They overpowered the marketplace with low cost, quality products. It is also a fact that the Japanese place little or no emphasis on strategic planning. Until now. Over the years, American companies have embraced the Japanese business focus on improving operational effectiveness. TQM and continuous improvement (and the American counterpart, reengineering) have been successfully implemented at many companies. These initiatives made organizations more competitive by lowering costs, creating high quality products and services and increasing productivity.
However, Japanese companies no longer hold a distinct cost or quality edge in the global marketplace the competition has caught up to them. What we have found is companies can only maintain competitive advantage over rivals through the use of operational effectiveness programs, if that difference can be sustained over the long term.
Operational effectiveness programs are finite. There are only so many efficiencies one can create. That's not to say there's no place for reengineering or process improvement tactics. Organizations must embrace these initiatives, not for market domination, but, if nothing else, to keep up with the Jones'. Remember, many a business has posted a "for sale" sign because of a competitor's price or quality advantage.
Competitive Strategy is different. It is all about identifying uniqueness and creating growth opportunities. Developing a sound and evolutionary strategic planning process is the only way a business can create sustainable competitive advantage. Click here to take a survey designed to rate whether your organization has a focused strategic direction.