Why A Start-Up Has To Balance Strategic And Operational Thinking

Marian Evans, Managing Director at Elevate BC Ltd.

Starting a business can be tough. There’s a lot to do and usually a tight budget to do it with. Getting the business up and running and generating revenue is usually the priority, which is why business founders tend to focus more on the operational side of things—short-term ideas and implementation tactics. However, in the clamor to reach those early goals quickly, the strategic direction of the business, say over for three to five years, is often not the focus.

To scale up successfully, business founders have to balance their operational goals against a backdrop of strategy. In this article, I’m going to look at why this balance between strategic and operational thinking is the route to sustainable profitability.

What’s the difference between strategy and operations?

Before we get into the discussion, let’s tick off the basics:

Operations

Operations are the highly-detailed, task-oriented work that revolves around your business’s primary function. It’s overseeing the day-to-day tasks you need to perform to deliver your products or services to your customers. In isolation, operational tasks may seem inconsequential, but the business can quickly unravel if they’re not all taken care of properly.

Operational goals are specific and measurable and focus more on doing things right and doing things better, rather than your business’s direction or long-term plans. Operational goals are short term, typically achievable weekly, monthly, quarterly or within a year.

Strategy

The business’s strategy is the work that goes into the planning and goal-setting that determines its trajectory and direction over the longer term. Your company strategy should be aligned with its mission and vision and be set by the founder and senior managers. You should meet, typically monthly or quarterly, to assess the business’s current progress towards its strategic goals, set budgets and make adjustments to your plans.

Strategic goals focus on doing the right things and setting the business on the right course. The goals are longer term than your operational goals, with a typical time frame of three to five years or longer.

What is the relationship between strategic and operational thinking?

Very simply, your strategic thinking sets out your future destination, while your operational plan helps you get there on a daily, weekly and monthly basis. Both operational and strategic thinking guide your company’s plans for the future, but one is short term and the other long term.

The strategic goal of your start-up could be to establish yourself as the leading provider in your niche. Operationally, you might decide to increase your marketing spend or release a new range of seasonal products to help you get there.

Why is it important to balance strategic and operational thinking?

Without both operational and strategic thinking, there is no business. That’s why you have to create the right balance.

Strategy and its execution are vital for a business to survive and stay competitive and profitable in the long term. But there is no long term unless the business is viable in the short term, and that’s down to your operations. Operational execution enables the business to keep producing products and services that customers and clients buy, so you can be profitable in the short term and work towards your strategic goals.

How can you balance strategy and operations?

Clearly, both strategy and operations are vital, but when resources are limited and everything is urgent, how can you balance those short-term and long-term goals?

1. Make time to think strategically.

In the fast-paced world of start-ups, strategic discussions can easily get lost among urgent topics and the constant putting out of fires. However, you mustn’t lose that strategic time altogether. Booking a slot in the diary weekly can help ensure it is part of routine.

Another way to maintain your focus on strategic discussions is to split your meetings into: a) the operational and b) the strategic. Both types of meetings should have a clear agenda that outlines the decisions you will make and your next steps.

2. Working ‘on’ the business as well as ‘in’ it.

A vital part of scaling a start-up business is for founders to start working ‘on’ the business rather than ‘in’ it. By delegating the operational tasks, such as certain administrative tasks or meetings you’re not required to attend, you can make more time for those vital strategic undertakings. This time can be spent looking at financial and industry data and making decisions about the company’s long-term objectives.

3. Prioritize the opportunities ahead.

Start-ups are inundated with multiple competing opportunities. By taking a step back and having a strategic view, you can prioritize the opportunities and choose which to focus on operationally. Thinking strategically can help you overcome the decision overload many founders experience and help you prioritize opportunities based on their feasibility, impact and alignment with the company’s objectives.

Balance Requires Practice

Balancing strategic and operational thinking requires patience and resilience. Change doesn’t occur overnight, but the outcome is worth it.

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