The term strategy stems from ancient Greek and has its origins in the art of war. In recent decades, the term has become increasingly important in the business world. Here and there, strategy aims to achieve medium- to long-term goals. Nowadays, there is hardly any company (above a certain size) that has not defined a corporate strategy. The corporate strategy specifies the company’s approach to proactive development, so that it does not just react to influences, but actively takes action. Strategic work in companies is sometimes misunderstood as a pure management task. In fact, every corporate function – purchasing, production, sales, IT, HR, … – should push strategic working to improve companies and help determine development. An important prerequisite for value-creating strategic work is to understand what this means in detail, what operational work is in contrast, and how strategic work is organized so that change and design towards the positive can succeed.
What is operational work?
An illustrative synonym for operative work is “working WITHIN the system“, i.e. following the predefined and trained processes. The central question here: is this alone adding value? It is clear that without the many small and large operational activities in production, sales, purchasing, accounting and other areas of the company, there would be no product, no sales and no profit. These operations can be performed better or worse, for example; quickly, without errors, without waste, or awkwardly, without routine and constantly at risk of provoking errors and additional work. Thus, a lot of value can definitely be destroyed here, but it will not become better than perfect (according to applicable rules).
What is strategic work?
So unless someone steps out of the system every now and then and takes a critical look at it, significant changes towards an even better result will fail to materialize. Exactly this, “working ON THE system“, is called strategic working. The goal here is to find opportunities for improvement and to change the current framework accordingly. This requires a comprehensive understanding of the interaction of the individual functions and people in the company and clear goals: is growth sensible and desirable right now or rather cost reduction? Do we need to pay attention to quality or is there a lack of speed? Are we looking for the next customer or the right product for him?
Strategic work is complex, must be learned and continuously improved. Regular questioning of ideas, exchange and feedback loops with superiors or colleagues, breaking up routines or visualizing goals and one’s own ideas – for example as a plot on the wall or on the desktop background – serve as tools for this. It’s also important to take advantage of every opportunity that can bring new knowledge and ideas: Reading books, talking to knowledgeable people, observing, analyzing data, etc.
Operational vs. Strategic
Processes that tangibly and quantifiably generate a physical or non-physical output are described as operational work. In other words, operational work is the day-to-day work that is performed to keep a company running and performing its core tasks. Processes that change the structure of the business, how it operates, its rules and systems are described as strategic work. They ensure that a company reacts correctly to external influences, thus remaining competitive and ideally being able to set new accents on the markets itself.
Not everyone is suited for and enthusiastic about both operational and strategic work. Operational activities can be perceived as stable and satisfying on the one hand, and as boring and monotonous on the other. Strategic work can trigger enthusiasm and excitement with the ambition to create, or uncertainty, frustration and excessive demands. The division of operational and strategic work should therefore be based on the talents, skills and preferences of the respective employees.
Strategic Planning and Strategic Management
Strategic work also needs a structure (or rules) so that arbitrary changes are not made by arbitrary people in the company. The recognized structure for this are multi-year strategic cycles. In these cycles, phases of strategic planning alternate with phases of implementing the plan – strategic management.
Strategic planning refers to the development and elaboration of a strategy. After a detailed analysis, this usually includes a vision, a mission, goals and a concrete action plan. The aim is to define the direction of development for the coming years. The planning horizon is usually three to five years. Typically, management develops a strategy for the entire company – one could say the “mother” of strategies. However, this is not necessarily the only level at which such a plan can and must be developed. On the contrary, for individual employees, the corporate strategy can often be perceived as abstract, detached and of little relevance to their own activities. For this reason, it has become good practice for the central business areas, for example individual business units or central functions such as purchasing, sales, production, logistics, HR, etc., to formulate their own strategy. This has the function of a link: it makes it more concrete how the individual business unit wants to serve and contribute to the corporate strategy and is often much more concrete and comprehensible for the employees of this unit.
Strategic management has the task of implementing the corporate strategy and the goals that were worked out in strategic planning with the defined measures and tools in the company. The same applies to the individual business units: all actions and activities should be in line with the unit strategy and ultimately also the corporate strategy. The development of the internal organizational structure is thus just as much a part of strategic management as the design of internal processes and procedures. All processes should be planned and implemented in such a way that they generate the maximum output for the specified goal achievement. A central element of strategic management is always the involvement and leadership of employees: listening, explaining, motivating, supporting – this is what good strategic management does. Good strategic management makes an important difference between a successful and an unsuccessful strategy.
Not everyone is suited for and enthusiastic about both operational and strategic work.
Corporate success as a common goal
Each of the terms mentioned here influences processes and procedures in the company in some way. Particularly in the case of processes that often follow a similar pattern, small changes can add great value. Purchasing and logistics processes are virtually predestined for strategic processing and continuous optimization.
In summary, it is hard to imagine successful companies without strategic work. It makes an essential contribution to the positive development of companies, creates new developments, sets trends and writes success stories. The more time and resources management allocates to this task, the more successful it becomes, and the more employees are assigned to it. Which employees are more or less suitable for this depends on their individual talents and preferences and on the targeted deployment by the company’s managers. At the latest, however, all employees of a company are affected, involved and challenged in some way during the implementation of the strategy.