We’ve Come So Far
Welcome to the third post in our series on operational strategy! Thus far, we’ve discussed a couple of critical steps in the process. The first was creating an action plan for your operational strategy, in which we outlined five steps that you need to take to get everyone on the same page and prepare for the rest of the process. The second was taking that action plan and beginning the process of putting the pieces into place via implementation.
To many, these first two steps might seem like all that’s needed to actually take a strategy from start to finish. You’ve outlined the process and who will be involved, determined the goals and metrics around them, and even navigated the changing waters of the actual implementation itself, which may have resulted in a modified or entirely new action plan along the way. These two processes together could have comprised a couple of weeks to perhaps even more than a year depending on your organization and what you’re trying to achieve.
Now, the End Is In Sight
Or is it? While you’ve already created a plan of action for your operational strategy and have perhaps even implemented it, there is actually much more to come. Why? Because now you have to actually achieve what the operational strategy was intended to help you achieve. This is accomplished through operational strategy execution. The importance of strategy execution, as opposed to other steps, can’t be overstated. This is because you’ve finally arrived at the “do” stage. You’ve already completed the “think” and “plan” stages. Now it’s time to act.
Confused? Don’t worry. The common thinking behind operational strategy is that once the implementation process has been completed, the project is complete. Your job — whether you’re a project manager, department head, or executive — is done, right? The strategy has been implemented, and whether you’re the one running the overall project or program, the to-do box next to “operational strategy” can be checked off, right? Sorry, but no.
Let’s Revisit Implementation
To better understand the importance of strategy execution, it might be helpful to revisit operational strategy implementation. Remember that implementing an operational strategy is the process of initiating the action plan and then monitoring it. Monitoring is important — it reveals whether the strategy and implementation are running side-by-side. As new information or business changes result in the implementation being modified, the strategy itself changes. The endpoint may be the same (or it might not), but the journey to get there is different.
But this process is only designed to get you to a point where the strategy rollout itself is complete. Again, the implementation process isn’t truly complete until you have achieved the desired business benefit via execution. This is because you may need to make additional changes or process improvements to open the way to that success even after the process of implementing the strategy is done. With that understanding, let’s now move into strategy execution.
Strategy execution is the phase following implementation and consists of the decisions made and activities performed to turn an implemented strategy into a success. With the foundation built, you can begin working toward what the strategy calls for using the systems, steps, processes, and other supporting elements identified in the action plan and established during implementation. Your goal: to realize the benefits of your strategy.
An Example of Operational Strategy Execution
As an example, let’s say your operational strategy calls for a 25 percent reduction in manufacturing material waste within one year. Q1 is spent creating the action plan and who in your organization will participate. When the goal, metrics, timeline, and other details have been established, you and that team begin implementing the strategy.
Throughout Q2, the pieces are all brought together: new equipment that results in less scrap, a redefined inventory management process that cycles material into production sooner, new shop floor software that employees can use on their own mobile devices that reports production data real-time, and much more. When these elements are put in place, the implementation process is complete. Now on to execution. Remember, your goal was to reduce manufacturing waste by 25 percent, and you have Q3 and Q4 to do it.
Execution in this example is the use of the new manufacturing equipment, inventory cycling process, and shop floor software by all the teams involved to produce the result. Throughout Q3, you manage to achieve a 10 percent reduction in waste, but you know that even another few months won’t help you achieve the 25 percent goal. This is an example of how the implementation isn’t entirely complete. You need to make changes.
The equipment is running perfectly, but after careful evaluation, you realize a glitch in the software is telling shop floor workers that they have less material inventory on hand than they actually do, resulting in them slowing down in anticipation of a restock that isn’t coming. The issue is fixed, and production picks up. With increased production comes an increase in overall output at greater efficiency, enabling you to hit your 25 percent goal by the end of Q4.
Congratulations! Your operational strategy is formally executed. You and your team developed an action plan, spent the proper amount of time implementing it and allowing for adjustments, and managed to accomplish the goal while still allowing for the implementation of the operational strategy to change. And yet, while it may seem that the operational strategy is a success, there is a final step. We’ll cover that next time.
For now, remember that execution is an ongoing process just like implementation. It will likely repeat as you move forward, too, as your organization’s leadership may wish to continue this operational strategy the following year with a further reduction in manufacturing waste.
Take Your Strategy Execution to the Next Level
If you’ve ever been tasked with an operational strategy, you’ll know that it’s quite the undertaking. Not all small-to-midsize manufacturing and distribution companies have a reporting or business intelligence team, so this responsibility often falls on the shoulders of operations, purchasing, supply chain, finance, or another related department. And it’s all on top of existing responsibilities and projects. Even if you’re fortunate enough to have an operational strategy assigned to you as a new project at the start of your year, it’s still another significant project that must be managed alongside your current workflow.
At River Rock Advisors, helping companies define, navigate, and measure operational strategy is our focus. Everything we do is designed to help you achieve true business value through optimization — because after all, that is the real end goal. Achieving something that brings real value to your business. If there’s no value, there’s no point. If you’ve been experiencing challenges with your supply chain or processes, or if you see an opportunity for improvement, we’re here to help.
Often, we are able to work alongside our clients’ existing operational strategies — serving as an objective, independent guide that keeps your operational strategy moving in the right direction. We ensure all involved parties are aligned on the process and objectives and assist in the critical adjustment phases that can occur with implementation and execution. And all along the way, helping you realize business value through your work, as defined by you, remains our goal.