Mind the Strategy Gap

Join the supply chain conversation at Think Supply ChainYour comments after my last post, which I greatly appreciate, reminded me of an interesting meeting I had a few years ago. The group was discussing strategy and linkages between corporate strategy and supply chain and operations strategy. After the meeting was over, I asked Robert Vokurka, PhD, CFPIM, CIRM, CSCP, 2008 chair of the APICS board and a professor of operations management at Texas A&M University, to help me understand the disconnect. As he explained it, we ended up drawing a continuum on the white board that looked something like this:

Think Supply Chain

In organizations where a gap exists, it is likely that a combination of the following is happening: corporate strategy is not being effectively communicated across all levels in the organization and staff on the execution side of the business is not proactively seeking to understand corporate strategy and how it impacts what they do.

Imagine the many decisions made every day by supply chain and operations management professionals primarily responsible for execution. To whatever extent a gap exists between current corporate strategy and execution, it creates risk and loss of opportunity. Yet, the negative impact of the gap is a shared responsibity of corporate leaders, managers, and individual employees. How do you mind the strategy gaps?

  • How do we ensure that employees at all levels of our organizations are making the best decisions based on corporate strategy?
  • How does one proactively gather the information needed to be certain that his or her work aligns with corporate strategy?
  • What does it take to have confidence that all policies, processes, systems, and staff are aligned to achieve corporate strategy?

10 thoughts on “Mind the Strategy Gap

  1. If you study Michael Porter, he contends that many times strategy as articulated by the corporate side (the left hand side of your continuum schematic) is not even strategy…”being the best” or “annihiliating our competitors: is not strategy. Strategy creates competitive advantage by reinventing the competition to create unique value.

    I am preparing once again to teach the CPIM Strategic Management of Resources module, and every time I revisit Porter’s texts on corporate strategy it is like eating a “lead sandwich”. Thankfully, his research associate Joan Magretta has written “Understanding Michael Porter”, far more readible and digestible than Porter’s original seminal works.

    I would highly recommend this treatment of Porter to APICS SMR instructors as well as SMR students who have neither experience in or exposure to developing Corporate strategy. I know MaryAnne Ross uses it extensively. And t be candid, reading Nigel Slack in the SMR references Sourcebook is even worse than reading Michael Porter’s original material…Thanks for sharing your insights, jw

  2. One of the most successful approaches I have been a part of is where the company’s strategy was incorporated into individual annual performance objectives. The process begins in the Boardroom where those determining the strategy establish their own objectives that implement the strategy. From there, the senior manager then drives the strategy down in the form of objectives to his reports, clearly articulating the connection to the strategy. This process cascades down through all positions where performance objectives are set.

    Quarterly “town hall” meetings focus on articulating the strategy and talking about the supporting initiatives under way. Questions and feedback are sought to clarify and distill everyone’s efforts.

    This sounds overly simplistic, but I can tell you I saw the company move towards achieving the strategies as a result.

  3. I agree with both of my esteemed colleagues! Strategy is best implemented when there is a focused effort from senior management to include everyone in the organization through ample communication and employee empowerment. The books that Joe speaks of, Michael Porter’s and Joan Magretta’s emphasize the importance of communication. Another great resource on the subject, a book I use often in classes, is The Toyota Way to Lean Leadership by Jefferey Liker and Gary Convis. This book describes the Japanese strategic planning methodology of Hoshin Planning so beautifully. And the fundamental principle behind Hoshin Planning is that all employees participate, top down and bottom up.

    A good friend of mine, Mr Phil Van Hooser, is about to release a book titled “Leaders Ought to Know”. I’ve got my copy reserved because I know Phil well enough to know that he’ll have a lot to say on the subject of empowered workers and the value they bring to their organizations.

  4. Mark is correct, in my experience, but it also takes good managers who are willing and able to walk the floor and engage people at every level in discussion about how they see the goals and their contribution. The Gemba Walk is more than a morning production review. it is an opportunity for management to engage with people at all levels in the company to LISTEN to their views. It’s a giant, and expensive, game of telephone. We know what we said, and we think they heard us say it, but we need to verify that they heard what we wanted them to understand. It is time consuming in the beginning, but it yields huge benefits and it closes the Gap.

  5. I think most people still confuse tactics with strategies. The dictionary does not help us much in making the distinction. It says, Strategy is the science or art of combining and employing the means of war in planning and directing large military movements and operations. With Tactics being the art or science of disposing military or naval forces for
    battle and maneuvering them in battle.

    Often times firms strategies start and end with a distinctive offering and then try to adopt in a relative cookie cutter approach, here I am thinking about the Big Box retailers. Then there comes a game changer like Amazon and then the Big Box guys start going out of business.

    I think one of the major challenges facing companies today is to how often and how to adjust to the various opportunities and treats. We learned all about SWOT in school, but how many really apply it to develop strategies and the tactics that support it?

  6. I have been confronted with this issue over and over again, in real life companies, I’m not talking about book knowledge or theories.

    I fully agree with Bill’s first sentence:”I think most people still confuse tactics with strategies.” The rest of his first paragraph proves it, the dictionary he is quoting is wrong: it what it calls strategy is really tactics and what bit calls tactics is execution. To stick to the military analogy:

    - Strategy is deciding who is your enemy, whether a bad treaty should be better than a great war, and eventually, decide to go to war; it is a political, not military decision, (hopefully taken with competent military support).

    - Tactics is marshalling the resources necessary and planning and directing them in the theatre of war.

    - Execution is disposing forces for battle and maneuvering them in battle.

    For some reason, most authors, consultants and managers abhor using the T-word : Tactics. Everything seems to have to be either Strategic, or it’s lowly execution. The drawing in the post seems to confirm my impression.

    I believe that understanding the scope and objectives of the different decision making levels will help also understand the potential communication fails between them.

    If I keep writing I’ll be starting a book, so this is enough for today. Hope you found this on topic, and would certainly like it to be useful.

  7. I am a recent graduate in Supply Chain and Logistics Management. But does Kaplan and Norton Balanced scorecard bridge that gap ? The performance measures are based on the strategy and do they not act as a kind of feedback for managers. From these feedback, managers should investigate why they are not meeting their target and take corrective decisions. At the same time, the strategy should be disseminated to all employees on all level and explained to people on all level in the organisation. They should be explained what the organisation wants to achieve. Please correct me if I am wrong. I am new in the supply chain and logistics.

  8. It seems to me that commercial industry could adopt some of the practices and processes that the U.S. military uses. As a soon to be retired Army logistics officer, I have been part of developing strategic goals for logistics planning and distribution operations. There are many practices to streamline processes while ensuring increased property accountability, asset visibility and inventory control.

  9. Just some quick thoughts for a successful strategy….

    - Comprehensible and articulate: strategy should be easy to understand, where we are now, where do we go and why?

    - Buy-in: answer the what’s in it for me; this ties close to performance and follow through. Use today’s technologies to crowd source ideas from your employees to understand current realities

    - Change Agents: identify agents who bestow respect to spread the new way of thinking

  10. I am still trying to understand ‘how’ companies bridge the gap between strategy and execution. I have read much of the academic literature referred to above, but see few examples of actual implementation. Can anyone give me a few recent case studies of companies that have sucessfully deployed their strategy?Thanks Blair

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