The Need to Better Link Strategy and Operations
Curt W. Reimann
During the past decade, major transformations have been taking place in businesses and other organizations in response to competitive pressures, societal demands and changing business strategy. Performance requirements -- defined broadly in terms of quality, speed and cost -- have become increasingly difficult to achieve and likely to change more often and more significantly than in the past. Changing performance requirements need to be translated more quickly into strategy and operational parameters, addressing and appropriately balancing overall requirements of all stakeholders.
The reconciliation of overall requirements poses many new challenges, including the need for managers, students of business, and others to be able to assess how well diverse requirements have been operationalized and how well a company is progressing toward its key strategic goals. However, these requirements now often include assessments driven externally -- by customers, regulators, and market entry. Such assessments tend to be narrow in scope and not necessarily well connected (or connected at all) to business strategy and overall performance. More than at any previous time, there is now a need to develop the capability to perform integrated, strategy-based assessment and analysis of overall performance.
In order to make progress toward such integrated assessment, it is important to develop a clear understanding of the different types of assessment. Two types of assessment are discussed here: externally-driven and strategy-based. Externally-driven assessments tend to emphasize conformity to specific requirements. They tend to adhere to assessment checking procedures and documentation built around some well-defined process(es). These assessments stress consistent practices and cover part (often a small part) of a company’s overall business operations. Strategy-based assessments, on the other hand, need to address factors such as improvement, productivity, learning, cost, human resource development, speed, quality, and strategic initiatives – which, by their nature, cover all business operations. To be effective, strategy-based assessments must be holistic (or systems oriented) and more concerned with best practices.
Although externally-driven and strategically-based assessments are not necessarily inconsistent, their reconciliation is often difficult to achieve in practice. For example, the skill sets, experiences, and frames of reference of those who usually conduct these types of assessments are generally quite different. Also, neither engineering nor business academic programs, with their emphasis on functional specialization, tend to afford students with the training and experience needed to carry out comprehensive, integrated assessment. In the absence of generally accepted, high-level criteria and training, integration is difficult to achieve or even to define.
National and State quality award programs -- part of efforts to improve national competitiveness -- have led to the creation of criteria for use in evaluating applicants for recognition and giving applicants feedback. Initially focused on quality management (in the 1980’s), these criteria have evolved considerably since that time, and now span all key business requirements, processes, and operations. Such requirements should include any externally mandated assessments, including those that comprise only a sub-set of a company’s business processes, as described above. Since their initial launch in 1988, the use of award criteria for self-assessment now exceeds greatly their use in recognition programs. In addition, their use in both self-assessment and recognition has led to the creation of a new type of case study and performance profiles of organizations of many kinds -- private and public, manufacturing and service. Many such case studies are now widely available. These case studies, which include processes, results, and their alignment, form the principal basis for training toward comprehensive, strategy-based assessment.