Note: This post is the second in a series of posts from Robert Bradford’s article Aligning Departments with Strategy originally posted in Compass Points in November 2002. Part One (click here) introduced the topic and discussed the affect that the Purchasing and Accounting departments have on strategy. This part discusses the affect of the Operations, Sales, Human Resources and Customer Service departments.
Operations — Naturally, since your operations lie at the heart of creating the product or service that your customer is paying for, the way operations is managed can greatly alter the way customers experience doing business with your company. Commodity customers should be supported by operations that focus on efficiency even at the expense of some value, while specialty customers are best served when operations add costs in order to gain even greater value. In addition, companies that are seeking to move into specialty markets may need to improve their effectiveness with lower volume operations, while commodity markets are usually dominated by high volume operations.
Sales — Sales is often seen as the “front line” in strategy, since people in sales usually have the majority of customer contacts in many organizations. The nature of your sales force and its processes will greatly affect the success of your strategy. As a rule, people in sales find their jobs easier when the company is pursuing a commodity strategy. This is because selling something for a lower price takes far less sales skill than selling it at a higher price. Expensive, skilled, knowledgeable salespeople are a necessity when you are pursuing specialty customers, while commodity customers — who are selecting vendors predominantly on price — are much more effectively served by low-pay telemarketing people, or even a simple website.
Human Resources — In some industries — especially services — human resources is appreciated as a strategic area. Even in manufacturing, we can see that a significant portion of value added must come from our people. What is sometimes harder to see is that some of the things that we do to keep our employees happy — such as HR, payroll and benefits — can dramatically affect employee retention and even what types of employees are retained.
Customer Service — Customer service —as a department — is sometimes treated as non-strategic because the customer contact here is not driving sales. The nature of this interaction can have a significant impact on customer perception of the value of your product or service. In addition, customer service should always be viewed as a key source of information about possible improvements to make in your products or services.
The next and final post in this series will discuss the affect that the Research and Development department has on strategy.
How do your Operations, Sales, Human Resources and Customer Service departments affect your strategy? Attend the Simplified Strategic Planning Seminar for more instruction on how to achieve alignment from your departments as well as all other aspects of Simplified Strategic Planning.
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