Aligning Operations with Strategy

Question: 

How can operation strategy be aligned to business strategy?

Gary's Answer: 

If they are not aligned, with the operations strategy serving the needs of the business strategy, you don’t have any strategy at all.

It may not be exactly correct to call any aspect of “operations” a strategy. It is more of a plan because you control the environment in which operations take place. These internal operation have a known set of resources, where people work toward a common goal, which is usually well defined. This is the arena where planning works because you can define what steps need to be taken to produce the end product. Over time this plan becomes more precise are you find ways to improve the efficiency of your operations.

However, doing something right is not the same as doing the right things.

Knowing the right things to do depends on the external environment that is beyond your control. This is the realm of competition where strategy is required.

Strategy is the on-going process of recognizing and adapting to changes in the environment to improve your competitive position. It defines “the right things to do” based primarily upon the emergence of new opportunities.

Business strategy focuses operations on producing the solutions that are needed tomorrow. If operations is only focused on producing solutions that worked in the past, the organization is already dying without realizing it.

Operations is aligned with business strategy to the degree it is focusing on new opportunities that are constantly arising in the environment. It falls out of alignment to the degree it focuses only on what has worked in the past.