Connecting Strategy to the Reality of Operations

Nov 12

Clear choices, connected teams and the reality of operations are more important than yet another strategic plan.

If every single person in your company is getting better at their job, is the business getting better?

We frequently miss this very fundamental question.

In a recent conversation with another strategist, we discussed how companies spend a lot of money setting direction and improving execution, yet the link between the two is often weak.

Leaders have a vision. Departments have targets. Employees have tasks.

Across all these layers people can easily lose sight of how their work contributes to the business objectives. The 'why' often doesn't really connect with or get through to the people on the ground.

This conversation has really clarified my view. My ambition is to help leaders to understand and build that connection so that it is embedded in the way they operate and in the way they achieve their objectives.

Understanding how your company's strategy flows through the departments, the leaders and the teams is absolutely critical to getting the outcomes you want.

An operational problem can reveal a strategic gap

A business may be asking for help because onboarding is taking too long, or approvals are getting stuck, or the team is just drowning in the manual work.

These are the symptoms of bottlenecks. They need to be addressed and there needs to be a clear route to a resolution.

Prior to redrafting the processes it is absolutely vital to have a clear understanding of the business objectives and the reason for tackling these bottlenecks.

Consider the case of a software company that's having a really hard time with onboarding. One possible solution would be to standardize the process and automate as much as you can.

This would be fine for a business with a very simple, low touch implementation but would be a complete disaster for one that's providing a very bespoke experience.

The question becomes one we can act on when we ask ourselves which customers we're serving, what we're promising them and what our operations actually have to deliver.

Michael Porter put that part of the challenge very clearly: "The essence of strategy is knowing what not to do." [¹]

These choices should inform the decisions about what to simplify, where to invest, what exceptions to make and what requests to say no to.

Otherwise we're going to be improving processes without in any way guaranteeing that they deliver on the business outcomes we want.

People need to see how their work connects

In my time leading teams, I’ve heard this question in various forms, and it has stuck with me: How does what I’m doing relate to what leadership is always talking about?

That’s a fair question.

It was useful to illustrate those links: start with the company's North Star and priorities, then go to the contribution of the department, then the team's objectives and how the individual's work feeds into that.

I used OKRs (Objectives and Key Results) to make those relationships visible.

The most valuable aspect was the ensuing discussion. People understood why certain outcomes were important and were able to challenge work that wasn't right.

This is absolutely critical for adoption. Engagement goes up when people understand the 'why' of the change and how their own role fits into that.

However a clear cascade of objectives doesn't necessarily lead to alignment. The departments themselves will also have to take into account the wider business context.

Sales can hit their target while creating commitments that delivery cannot meet. Procurement can reduce unit cost at the same time as increasing inventory and cash pressure. Customer support can close more tickets than ever before while still leaving the underlying customer problems completely unaddressed.

Each team could be doing brilliantly by their own metrics. The customer is experiencing the entire system.

Leadership must bring these perspectives together.

A strategy people cannot use leaves them guessing

A major point that came up in our discussion was the importance of communication.

A well-developed strategy has very little impact if it's still only the preserve of the leadership team.

People need the right amount of context in order to make sensible decisions in the absence of a manager. They need to understand the priorities, the acceptable trade-offs and when it's appropriate to escalate.

They also need room to exercise their judgment.

I’ve worked in organizations where capable people had very little real decision-making power. That in itself causes a lot of delays and also underutilizes a tremendous amount of frontline experience.

As the business grows you can't have the founder or leadership team approving every single decision. You need clear direction and defined decision rights in order to grow the business.

This is all about humility. Leaders have to be open to the fact that when the operational reality bites, it can invalidate the strategic assumptions we've made.

Execution should teach us something

Strategy gives direction to operations and operational results should in turn inform future strategy.

Customer response may be different to what you'd expect. A great service may be very expensive to deliver. The team may well come up with better solutions. The situation may change and you may need to be agile.

We should learn from this evidence and not regard every difficult week as a reason to walk away from the plan.

Roger Martin captures the practical test: “strategy is what you do, not what you say.” [²]

He also stresses the importance of learning: make a rational choice, act, observe the results and then adjust.

For me, that means asking a few questions regularly:

What did we actually expect to happen?
What actually happened?
Was the gap due to execution, a flawed assumption or a change in the circumstances?
What should we keep, what should we change and what should we stop?

This is a crucial distinction. A good strategy can go wrong through poor execution, and good execution can reveal problems with the original strategy.

We need the honesty to look at both.

We have to retain what we learn. Customer insights, the lessons from failed experiments and the decisions we make should all feed into future projects. To start from scratch is to relearn all that we've already learned at a huge cost.

AI makes this connection more important

We were going to go into AI transformation in more detail, but the conversation was all about strategy and that made sense.

Before we even ask which tool to deploy we need to know what we're trying to improve.

AI can help teams analyze information, reduce repetitive work, or build a new tool overnight. However, increased speed is only part of the equation.

What happens to the work next? Does the customer walk away with a better result? Does some other department end up with more exceptions? Have we actually created capacity that the business can use?

Those are operational questions with strategic implications.

I start with the desired business outcome, then look at the workflow, the people in it and the changes that are required. Only once we've done that do we work out where AI, automation or indeed any of the other tools can fit in.

The single most valuable intervention might be a technology change, a clearer decision, a simpler process or better collaboration between teams.

The method should be in line with the problem.

The focus of my work

What I enjoy working on is finding the gap between the strategic vision, day-to-day execution, and how those pieces come together to drive real results.

This involves working with leaders to define objectives, understand current operations, and then working with teams to make tangible improvements.

It also requires knowing when you need additional expertise and knowing who to engage.

Strategy and operations are different things, but maintaining the linchpin between them is an ongoing responsibility through discovery, implementation, adoption, and review.

This is the approach I'm building at 4 Finns.

This leads me to a simple question for any leadership team:

If I spent a week watching your people make decisions, set priorities, and serve customers, could I recognize the strategy you say you’re pursuing? Would your people be able to explain the company’s strategy, how they contribute to it, and the plan to execute it?