Lesson 1, Topic 1
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5.6 Relationship between production/operations and strategy implementation Copy

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Nik Shazana November 1, 2022

In today’s competitive business world, effective managers need to understand the difference between strategy vs operations. Managers should become strategic leaders to bring together these different aspects of a business.

What is the Difference between Strategy and Operational Effectiveness?

Expanded knowledge of how strategy and operations can work in parallel with one another will drive better performance and competitiveness for the organization. We have observed many organizations in which the line between the operational and strategic engines of the business can become blurred and confusing. Understanding the tension that exists between these two business functions will help managers recognize ways to reconcile those differences. When that happens, managers will see ways they can play a role in each of these important aspects of the business and will begin to identify strategic opportunities.

What is the Relationship between Business Strategy and Operations Strategy?

To provide greater clarity, think of strategy and operations as two separate, but related, engines on a boat. Both engines propel the boat forward. While forward movement can occur with only one engine, the boat moves faster and is more responsive if both engines are running efficiently. Each engine is important, and each engine requires fuel, maintenance, and skilful attention so the boat’s ability to deliver results is optimized.

Think of your organization as a big boat. If we focus all of our attention, effort, and resources solely on the operations side of the business, we put the whole organization at risk. This risk comes from the operational engine running harder. Being so focused on operations may seem like the smart thing to do at the moment, but over the long run, your efficiency may suffer. Running one engine hard could quickly move you in a direction that will backfire, taking your future competitive advantage with it. The idea of focusing solely on the strategic engine is equally bad. Without the operational capacity to implement or take advantage of our insights about future innovations, processes, or market needs, all efforts towards our strategy and planning will be for nothing. We must understand and balance both sides of the business, and to do that well, a greater depth of understanding is necessary.