Operational Effectiveness

and Strategy
 COMPETITIVE MARKETS

 Continuous struggle among industry players

 Managers develop skills to fight rivals
“ The battle is to the strong “
 OPERATIONAL EFFECTIVENESS

 For decades, driver to competitive advantage

 As major players reach high levels of operational
effectiveness it no longer confers a competitive
distinction
 And yet, it still passes for strategy
 THE FASCINATION OF OPERATIONAL
EFFECTIVENESS

 What it aims at - “offer products and services of

the highest quality, at the lowest cost.”

 The fascination - It is concrete, can be measured,

is supported by “best practices”, does not require
tough choices. Leads to superior performance.
 Focus - Excellence in processes, products,
services .

 Risk - Competition based solely in operational

effectiveness is easily imitated. At the
limit, leads to wars of attrition destructive
to the industry.
 THE HARD ROAD TO STRATEGY

 What it is - “ a deliberate effort towards a unique

positioning - a distinctive value
proposition.”

 A strategy must start with having a goal.

 A strategy delineates a territory in which an

organization seeks to be unique - strategy is
about choices.
 SUSTAINABLE COMPETITIVE ADVANTAGE

 Anchored by a value proposition that focuses

customer needs.

 Gained when the company builds and delivers a

unique value package that goes beyond the offer
of a product, to a customer solution.
 DEMYSTIFYING STRATEGY
 The essence of strategy - Set limits on what the
organization is trying to accomplish -
No company can be all things to all people.
 The road map - A perfect alignment of the
management process to the organization’s
Vision, Mission, and Values
 The means - Leveraging organization resources,
capabilities and competencies.
 The process - Innovation, continuous
improvement, learning.
 THE LEADER’S ROLE

 Make sure that everyone in the organization

understands the strategy - what opportunities to
look for, and what is off the limits of interest.
 Define the trade-offs - guardian and enforcer.

 Create a sense of urgency and progress while

adhering to a clear and sustained strategy
direction - The “creative tension” that leads an
organization from its current reality to where it
aspires to be.