Reports > Management

No excellent strategy without excellent execution : In times of upheaval, fundamental operational practices should be revisited first

2023.04.26 Dae-Sang Lee

In fiercely competitive markets, it's commonly believed that strategy is far more important than operational management for securing sustainable competitive advantage. However, recent research suggests that operational management plays an equally significant role in creating and sustaining competitive advantage. By paying as much attention to operational management improvement as to strategy development, it's possible to bridge the gap between strategy and execution and maximize the likelihood of strategic success.

Executive Summary

  • Many managers tend to believe that in order to secure sustainable competitive advantage in the market, they need to focus more on developing differentiated strategies rather than on operational management.

    • This belief stems from the fact that excellent operational management practices can quickly spread, making it easy for competitors to imitate.

  • However, recent research findings suggest that operational management capabilities are more important and less easily imitated from the perspective of securing sustained competitive advantage.

    • Organizations with strong operational management capabilities demonstrate outstanding performance in key metrics such as productivity, profitability, and growth, and this performance gap remains narrow over time.

  • Managers need to identify internal factors that hinder improvements in the organization's operational management and invest more attention and consistent efforts in upgrading management practices.

    • By giving as much attention to operational management practices as to strategy and effectively implementing them, the gap between strategy and execution can be bridged, thus maximizing the likelihood of strategic success.