Tuesday, November 01, 2005

Realisation - Operational effectiveness

According to Michael E. Porter, Harvard Business School Professor and strategy expert , success requires both the right strategy and "operational effectiveness". Porter is credited with coining the term "organizational effectiveness" as defines it as about continuously improving functional performance.

"Managers must clearly distinguish operational effectiveness from strategy. Both are essential, but the two agendas are different. The operational agenda involves continual improvement everywhere there are no trade-offs. Failure to do this creates vulnerability even for companies with a good strategy. The operational agenda is the proper place for constant change, flexibility, and relentless efforts to achieve best practice. In contrast, the strategic agenda is the right place for defining a unique position, making clear trade-offs, and tightening fit."

Porter says that managers must "lead and control the functional activities within the organisation, measure and improve the processes that they are responsible for, and leverage those processes through standardisation, communication and automation to then close the loop to provide ever increasing efficiency and effectiveness."

See the rest of this article on an interesting Oz web site "Realisation".

We are coming more and more to understand that managers must manage and that these responsibilities cannot be devolved to specialist groups. Like the old retail situation when I was told by a sales person "Oh no, we don't do Customer Service. You have to go to the Customer Service department" when we remove the accountability for effectiveness from the working manager, we remove ownership, erode commitment and take all the pride and passion out of the job.

So for those of us involved in change ...and that's all of us... it means that managers need support, coaching, training and ongoing opportunities to continue to learn about effectiveness. They need opportunities to come together and share - opportunity for a community of practice to grow perhaps. Rather than making another group responsible for hiring, performance improvement, process management etc. smart organizations are skilling their managers in what they need to build an effective organization.

But don't forget strategy, innovation and alignment - the framework that the manager needs to make those key decision. And although this approach seperates development of strategy from operationalizing it on the basis that it's hard to do both at the same time, we still need ways to hear from people and ensure that they are connected to the strategic framework.

Or do we..... ?


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