Operational Effectiveness vs Strategy part 6

Today I have been... 

Reading about reconnecting with strategy (reader, p60)

Why?

Compulsory part of the course

So What?

Porter lists a number of approaches which can help a company reconnect with strategy. If you're at the productivity frontier and don't have a clear strategy consider the following:-

• Which product/service is more distinctive?
• Which are most profitable?
• Who are our most satisfied customers?
• Which customers, channels or purchase occasions are most profitable?
• Think of the value chain? Which activities are most different or effective?

Refocus on your core competencies. Things going on at the periphery can be sold or allowed to lapse.

Porter argues that the challenges above require a clear intellectual framework and strong leaders willing to make choices. He argues that the core of management is strategy. Finding fit and making tradeoffs is more important than work to improve operations. Leaders teach others about strategy and be able to say no. Clear communication is required, as is constant discipline.

Improving OE is necessary, undoubtedly, but it is not strategy. Avoid confusing the two! Driving yourself to competitive convergence with your rivals is in no-one's best interest!