Lexington, KY - "Sally, you don't seem to understand. If we don't make payroll at the end of this month there won't be any need for a five-year plan," Fred retorted.
"I hear you, Fred, but we'll get through this crisis. You're right, we've got to ensure our ongoing operations are effective every single day, but we've also got to make sure our business is competitive over the coming years," Sally shot back.
And so goes the familiar tug of war between operations and strategy. All organizations must have a balance of the two in order to remain viable for the long term.
Strategic leadership focuses on the long-term potential of the business - developing and refining the corporate strategy with market analyses, competitive and technology assessments, and internal strengths and weaknesses. Operational leadership ensures the organization is operating efficiently as well as carrying out the strategic decisions.
Most leaders gravitate toward one role or the other. Very few leaders are able to do both well. Small business owners generally try to fill both roles, unless they have the foresight and willingness to cede some measure of control, generally the operational control, to others. Since the small business owner typically had the vision to start the business, he or she is more likely suited to a strategic role.
I often see brilliant individuals with fantastic ideas but little operational talent to carry out the vision. Successful visionaries are the ones who are able to make an honest assessment of their operational leadership capabilities and hire and trust someone who can implement their vision.
On the flip side, I have seen many a company flounder with stale products and a faint vision of the future. The general trend in business is that the larger a company grows, the more risk averse it becomes. It wants to protect its current large product base and is afraid of making too many innovations that will cannibalize the sales of existing products. Good operational managers are promoted as they show high profit and efficiency. Sadly, the strategic leadership is lost in the shuffle. Xerox is a good example of this. At one point, they claimed that it took seven years to prepare a product for market.
Successful companies understand the value of both strategic and operational leadership. Apple is unrelenting in its drive to introduce bold, innovative products even as existing products face strong consumer demand. At the same time, operational efficiencies are pursued so that the products can be offered at a competitive price.
Some organizations put the responsibility for each role into the hands of one individual with a corresponding title, such as a chief operating officer (COO) for operations. Another person then focuses on the strategic elements. In essence, these companies are co-managed. If the individuals are able to work well together with a shared vision and effective execution, they can create a powerful synergy.
Adobe Systems is an excellent example of such collaboration. With John Warnock as the strategist and Charles Geschke leading operations, Adobe has remained innovative and successful for almost 30 years.
Another solution to the problem of strategic and operational leadership is to create teams for each role. While this arrangement may create a strong team approach, it often creates tension when the strategy team feels that the operations team is unwilling or ineffective at carrying out the vision. In such cases, a decision may be made to collapse the teams together, creating a significantly less effective organization.
As a leader, it is ideal if you have the ability to strike a balance between a strategic and operational role. A comprehensive model, known as the Leadership Versatility Index, provides excellent insight into a leader's inclination in these roles based upon superior, peer, and direct report feedback. This survey asks each respondent if the leader focuses too much or too little on elements such as execution, efficiency, innovation and growth.
If may be helpful to ask yourself the question, do you lean more toward an operational or strategic role? What actions do you take for each role? How much time do you commit to each role? How often do you involve others on your team in each role? If you lean more toward one direction or the other, do you rely on a trusted senior individual or team to develop and execute the other role?
As we come back to Sally and Fred, we can see each individual's orientation. In a time of crisis, as Fred points out, an intense short-term, or operational, focus is required. However, a company cannot sustain itself for long without an insightful vision and strategic plan. Slow times, such as during a recession, are excellent opportunities to assess your current position and environment, determine a future direction with contingency plans, and prepare to spring past your competition as the economy picks up. It may also be a good time to appraise your personal strategic and operational strengths and weaknesses as you explore self-development and the long-term needs for your organization.
Joel DiGirolamo heads the firm Turbocharged Leadership and can be found on the web at www.turbochargedleadership.com.