“Operational effectiveness and strategy are both essential to superior performance but they both work in very different ways” - Michael Porter

While STRATEGY is about:

  • Building & strengthening competitive advantages
  • Offering your products/services to a niche set of customers in a unique way & understanding customer’s changing needs
  • Understanding the competition business models & what clearly differentiates you from them
  • Creating substantial value for customers & capturing the value through appropriate profit models
  • Building strategic controls
  • Creating stickiness with the customers

OPERATIONS on the other hand is more about:

  • Efficiency, productivity, capacity utilization, cost optimization & process improvements
  • Efficient supply chain management
  • Kaizen, 5S, TQM, TPM, TEI
  • Reducing throughput times
  • Speed-to-market, etc.

Even if you are the best-in-the-world at operations, it is not going to be enough to guarantee continued business success. Business leaders must therefore learn to differentiate between strategy-building-execution and operations. Without this clear differentiation, success is just a matter of luck.