As an SME owner you wear many hats and make many types of decisions

You know you need a Strategy and that you are in-charge of Operations;
but how do you know When to do What, and Which is Which?

Often in a small business these two concepts can be virtually indistinguishable from each other, and in larger business both have a penchant for waffling and powerpoint presentations. However, successful businesses work hard to ensure a good mix of guidelines and reporting across both strategy and operations.
Org Levels

Tip 1 – What is the difference: Strategic v Operational Needs?

When Stephen Fry posed this same question on a forum he chose this as best answer:

Strategic management spends time considering where the company is going and operational management involves dealing with the day-to-day running of things…..
The best way to identify one from the other in practical terms is by their use of bureaucratic terminology. Strategic managers favour expressions such as “forward projection”, “aspiration” and “feasibility study”, whilst their operational counterparts prefer “current status” and “internal relations”.

 

Tip 2 – How to Balance Strategic v Operational Needs:

It is easy, make sure you are asking all of these six questions all of the time:

Strategic management cycle:

  1. Analysis: Where do we want to be?
  2. Measures: Whats important?
  3. Planning: How do we get there?

Operational management cycle:

  1. Monitoring: How are we doing?
  2. Analysis and Reporting: Why?
  3. Planning: What should we be doing?

As was put very succinctly in another reply to Stephen Fry:

Operational Management find someone to blame when the sh*t hits the fan, whilst strategic management try to place said fan in a sh*t-free zone.

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Examples:

Strategic Decisions include:

* Vision
* Goals
* Priorities
* Objectives
* Targets

Operational Decisions include:

* Product
* Quality
* Process
* Layout
* HR
* Supply Chain
* Inventory
* Scheduling
* Maintenance

Balance your management decisions by Balancing your Reporting
This seems like a lot to think about, on top of your everyday work. BUT if you set up your business to create reports to you regularly, and discipline yourself to set aside small blocks of time for monitoring your progress and adjusting your strategies the results will be worth it:
How to Choose Successful KPIs

Tip 3 – Bringing it all together

Once a year:

  • Start at the beginning: review what your firm do/sell and what must the firm focus on at the moment to be great in business? These are your firm’s purposes for the coming year! – this will be the core of your mission statement and reflect the company’s Vision (if it doesn’t reflect the vision then something else needs a critical re-think)

Once the scene is set then daily, weekly and/or monthly revisit the six questions:

    • Strategy comes Next – what do management/departments need to do to this month to achieve the firm’s purposes? Pick five more things – assuming you are a manager/owner these will be your Team purposes from which you can develop team objectives

 

  • Lastly put it into action with Operations – what do your billing/sales/production staff need to do to help management achieve their objectives AND for the firm to fulfill its purpose – these become your staff individual objectives

 

Share your example where either Strategy or Operations got out of Balance, and how the day was saved…

Remember to change people’s and company names to protect the innocent (or not so as the case may be)!

 

About the Author

Why own a business post - Eve Blackall Smart Accounting image
Eve Blackall the small business answer to The Supernanny.
At Smart Accounting you work one-on-one with Eve who has already assisted hundreds of business owners increase cash-flow, grow profits, plus ensuring those businesses fetch the highest price when it comes time to sell.[/box]