Wednesday, September 25, 2013

Strategic Management vs. Operational Management

Strategic Managers see 'blue ocean' currents; Operational Managers only see 'red ocean' currents.


Strategic management as long-term planning requires a vision. In other words, a company needs to define where it wants to be in a decade or two (what's the vision) and how they want to get there (Strategy) and then Operational Management will translate the long-term plans into smaller scale plans to operationalize the move toward the vision.

Strategic Managers see 'blue ocean' currents; Operational Managers only see 'red ocean' currents: Strategic Leaders have the capacity to read change and emerging change wavefronts, in the same way, navigators read ocean currents; Operational Managers only see 'red ocean' currents. Strategic management is focusing on empowering company's resources for its competitive advantage in facing the competition... Operational management is getting things done through team efforts.
Strategy Management takes a holistic view; and Operational Management takes an internal view: A strategic perspective or capability is an analytical, synthetic and rational decision-making process combined with innovative, out of the box thinking and most important of all whilst being a visionary; an operational view is being pragmatic and committed to realizing the strategy. Operational Management may be viewing things from a single side (internally) and strategic management is a holistic view of things (both internally and externally) as the way of coming up with actions that will improve organizational performance and conformance in order to achieve the set goals.
Strategy Management focuses on effectiveness and agility, Operational Management focuses on efficiency: "Strategic Management" is concerned with establishing "where" the organization competes (which product, customer, geographic markets) and "how" it chooses to compete and capture value in each market; Operational Management, on the other hand, is concerned with "how do we run the business?" including (1) determining the role of the corporate center, individual business units, divisions, and the employees who staff them. (2) establishing standards and procedures used to make decisions around strategy and resource allocation. (3) defining and developing the employee capabilities and behaviors that are required to execute, and (4) establishing and monitoring KPIs that will be used to manage the business and individual employee performance.
The purpose of strategic management is to thrive business in the long term, and the goal of operational management is to make the business survive at the moment, both are crucial and interdependent management practices in running a truly successful business.  


9 comments:

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I love to read articles in this blog. All the articles are worth reading. Hope you would also like to see difference between strategic management and strategic planning

Very logical topic, thanks to share this amazing article about reality behind the scene of any businesses. Other than strategic management like financial and lead management there are solution in one place.

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