For success in new new economy, companies must invest in and support strategic and operational management excellence. Management professionals can find out more about strategic vs. operational management below, including looking at specific factors impacting both now and in the future of their business.
The Differences Between Strategic vs. Operational Management
According to Jeff Bartel, chairman and managing director of Hamptons Group in Miami, three components set businesses apart: strategic planning, agility, and innovation. But, what exactly is the difference between operations and strategic planning?
Operations refer to what actions a business takes to get things done. Strategy relates to the plans and methods behind operations. Lastly, strategic management has to do with how and why, and it is integral in ensuring operations activities drive a business toward overall goals.
Technology's Impact On Operational Management In The New Economy
From artificial intelligence and automation to cybersecurity to protect customers and the bottom line, technology will play a role in operational management for modern businesses.
Innovative Modern Ways To Improve A Company's Cash Flows
Automation is critical to improving cash flow, as it typically does more with fewer resources. It also frees up human resources to attend to more complex issues, such as R&D, customer-centric problem solving, and growth.
Hyper-automation is increasingly important. This is the act of using AI machine learning and other technology to automate everything, allowing you to save time and money while increasing efficiency and customer satisfaction.
Cyber attacks are hitting cash flows hard, so operational management must keep tech security in mind. By September of this year, the number of data breaches will outpace last year's numbers, making this a growing problem.
Modern Sales Opportunities To Reach New Markets
AI machine learning can also be used to improve user experience. Tech-backed automations drive more satisfactory self-serve digital options. Algorithms provide people with exactly what they want or need and analyze user interactions to help businesses make minute and significant changes to continuously improve.
Is Your Strategic Management Nimble Enough In Today's Business World?
Businesses of all types rely on digital landscapes for success, and digital moves fast. If your strategic management is not agile enough, it is hard to remain competitive.
Dynamic Capabilities To Help Businesses Pivot
Companies have four primary options for pivoting based on market changes.
● Radical Pivot - This is an option to consider when a business model needs a major overhaul. For example, core assets and activities are under threat by market forces, consumer evolution, or resource issues.
● Multi-Pronged Pivot - In cases where core assets are under fire, a multi-pronged pivot might be the right choice. For example, many companies that previously sold hardware or physical products now sell digital products.
● Operational Pivot - This is the standard option when core activities are the issue. Printing companies, for example, retain substantial core assets, but fewer people print at home as the world moves toward paperless goals. Scanning, photo, and art printing were once required.
● Opportunistic Pivot - Companies with strong core assets and activities may evolve into new endeavors to strengthen future growth.
Intelligent Composable Business
Composable businesses are made up of many disparate parts that work together. That makes them flexible and supports fast, easy pivoting. The COVID-19 pandemic demonstrated a need for this across all industries.
Strategic Management Strategies
Strategic planning involves setting the right goals for your business. Your strategic plan should keep in mind mission and values and ESG criteria or other external criteria that might impact sales or your bottom line.
Identifying Strategic Goals And Strategic Risks
Begin by identifying your target customer. That coupled with the brand's mission helps you create strategic goals for aligning business operations with customer needs while supporting growth and stability for the future, identifying risk areas, and developing strategies for mitigating or avoiding them.
Waste-Free Strategic Planning
A typical strategic risk is getting mired in strategy and planning and never taking action. Waste-free strategic planning reduces this risk by identifying limited metrics and goals, choosing the most critical initiatives, and concisely communicating the strategy.
Getting Your Company To Follow The Strategic Plan
Getting buy-in for the strategic plan can also be a challenge. Some steps to grease the wheels include:
● Sharing the goals and what they mean specifically for each stakeholder
● Inviting team members to take part in molding the plan into actions
● Communicating the plan from the top-down, offering each team member an explanation of how it impacts them and how they are essential to the success
Operational Management Strategies
Operational planning and management strategies should follow strategic planning and use technology and other resources.
The Importance Of Data In Today's Companies
Data is critical to success for modern companies. It helps inform product development and marketing decisions to inventory management and customer service. In fact, while speaking to Jeff Bartel in his Miami office, he suggested performing routine internal audits to identify pain points where a great amount of time effort are spent for very little return.
Data is also foundational to AI and machine learning that creates cost-saving, efficiency-driving automation.
How Web Data Integration Helps Operational Management
Data silos slow processes and create operational risk in the form of miscommunication. Web data integration helps ensure team members across various departments have the information they need to serve customers and perform work quickly in real-time.
Geospatial Data Is Vital
Location matters. To serve them the most effective digital marketing, you have to know where customers are. Likewise, supply chain logistics depend on knowing where a product is at any given time.
Examples of Operational Goals
Examples of operational goals include:
● Improving safety performance, which could be measured by the number of incidents reported
● Increased productivity, such as more work per hour or fewer missed deadlines
● Enhanced quality of service or products, which could be measured with quality surveys or error reports
Performance Goal Setting Accessibility
Goal setting accessibility is critical to long-term success. Team members must know what their goals are and how to meet them.
Consider using SMART goal-setting processes. Goals should be:
● Specific
● Measurable
● Achievable
● Realistic
● Time-based
Getting Your Company To Follow The Operational Plan
Getting buy-in for operational plans is similar to getting buy-in for strategic objectives. First, ensure everyone understands the big picture of the business and their roles in it. Set challenging but achievable goals and provide rewards structures to engage team members in the new normal. Most people need to know there is something in it for them if the company succeeds.
