All entries for September 2011

September 30, 2011

Thoughts on World Class Organisation – Strategic Fit

Today I would like to share my views on the importance of "strategic fit" for the world class organisations. This discussion is in the context that to just have "operational excellence" is never enough to become or qualify for a world class organisation.

Strategic Fit

No world class organization can achieve sustainable success by relying on operation performance alone; there is a need to develop and execute strategies that connect internal resources to the external environment whilst representing stakeholders’ interests. Strategic correctness and excellence should thus constitute a distinct category of measures that shape business excellence. Whilst many excellence models emphasize the measures of strategic process, we contend that a brilliant strategic process does not necessarily result in strategic excellence. It is also the correctness of the contents of the business strategy that make or break the success. An apparent shortcoming in the reviewed literature show that many of the models examined do not give sufficient emphasis to strategic excellence, and even less so to the critical aspect of strategic fit.

Strategic fit reflects the strategic school of business excellence. During the 1990s and early 2000s, management communities began to realize the growing imperative of strategic fit over and above other critical measures. The premise of the concept is that the coherence between operational performance and overall business strategy takes a higher priority than the isolated operational performance itself. One must ensure the business is doing the right things first before making sure it does the things right. Thus, mission, vision and value became the pre-condition for business success. Strategy is a mediating factor between stakeholders’ objectives and operational behaviour. In short, this school of thought contends that there can be neither excellent operations nor excellent performances unless they fit to the business’s top level strategies. Hence, we saw a growing discussion of strategic direction in defining and achieving business excellence during the 1990s by many leading thinkers including Peter Senge, Henry Mintzberg and Michael Porter.

September 27, 2011

Book review

Knowledge Management and Business Strategies
3 out of 5 stars

The book reveals its distinctive genre right from the first chapter, which is characterised by a highly pitched academic rigour and an epistemological approach, and it remains so consistently throughout. The literature reviews in every chapter has been without doubt aptly constructive to the topical theme and is comprehensive and thorough in nature. Considering that the book is accomplished by 24 contributors, the level of duplicated literatures cited by different chapters are extremely low, thus represents a high degree of coordination effort. Each of the three sections or even each of the 12 chapters can serve as a standalone reading and may be studied independently for a specific purpose. However, when one chose to work through the book systematically some discourses do appear to be overly lengthy and even duplicated occasionally, not verbatim, but in contents (e.g. even in Chapter 11, there is still a section on “What is Knowledge” whilst the book is drawn to close). The value of the book lies in the great coverage in the latest thinking and large collection of the developed frameworks in the area not to mention the highly sophisticated conceptual debates and in-depth exploration. However, one would prefer some more real-world case studies or just short case examples that lived the theory and engaged the real concerns. There is only one short case study presented in chapter 8. Also, on a much trivial note, a couple of diagrams and their text (e.g. the one on page 118, and Figure 3 on page 264) are too small to read.

Being an academic, I personally quite liked the book in that it addresses many intriguing theoretical under pinning on KM at the level that is intellectually challenging enough. It is, by usual academic standards, a well written and edited book in many respects. There is a consistent and high standard of subject language and rigorous approach in discourses and consistent logical structure employed across the12 chapters and 5 extended readings. The extensive coverage on the exploration of theories, strategic thinking, management frameworks and the analysis based on widely gathered factual data can be patently appreciated. The book is edited cohesively and the well structured logic flow through the subject areas can be easily grappled and it attained the richness and depth that any single author will find it daunting. The advantage of having multiple contributors, hence, has been appropriately harnessed. On the flipside of its strength, one may find it too notional to attempt for a quick grasp of the subject matter.

Based on the retailing price of £95, the book is not a cheap one, but it dose not take long to feel that it has a good value for the money. The extensive coverage and the level of the detail it carries offer a one-store-for-all collection. Along with the volume, it provides a comprehensive list of contemporary literatures in the subject area published around the world with in-depth reviews. It is also packed with benchmark-able information, data, and new models collected through countless research activities reported throughout the book.

The book is not suitable for any beginner, nor for reading through from cover to cover. It could be a highly valuable reference for library. Academics and consultants in this specific area will undoubtedly find it informative and mind-opening. PhD students or some Master level students may also find it valuable in some of their related research projects. But it would not be suitable for undergraduate students or any body lower than that level. I also doubt that the vast practitioners in real-world businesses will find it palatable, nevertheless one can never categorically exclude that case that with some help and guidance parts of the material could still be useful to them

Thoughts on World Class Organisation – Operational Excellence

As one of my key research areas, I would like to start a discussion on world class excellence, what it is, and how to achieve it. My thoughts are predominantly constructed around the "World Class Diamond Model" that I created during a major consulting project in 2006. Since then there are many valuable contributions made from my colleagues. In short I believe that all truly world class organisations demonstrate their excellence in four dimensions: operational excellence, strategic fit, capability to adapt, and unique voice. Today I start sharing some of my thoughts on the "operational excellence" and will follow it up with more discussions soon after. Comments, suggestions or questions are always delightfully received.

Operational Excellence

There is a strong body of evidence in the literature to support that world class organizations embrace operational practices that focus on right first time, high efficiency (productive) and effectiveness (customer/market oriented) of processes. These traits are captured in the dimension of Operational Excellence. As operations fulfil the customer requests, they become directly visible to the external environment. Thus in almost all excellence frameworks, measuring operational excellence is included. Because operations execute and deliver the strategic planning, they become the most immediately concerned and measured part of business.

What constitute the detailed measures in the Operational Excellence may vary significantly, and is better to be left open in the model, but for the managers to determine in their specific situations. There are many factors that will determine and change the concept of what is an excellent operation, such as, product categories, market competitive conditions, customer categorizations, and so on. Therefore in the assessment of world class excellence in operations dimension, it is vital that one adopts a situation-sensitive and firm-specific means of evaluation, and the World Class Diamond Model accommodates that.

Operational excellence has been discussed extensively in the classical school of business excellence. The mass-production systems herald by the Taylorism and Fordism in 1920s and 1930s were examples of classical business excellence, in which operational efficiency is the centre piece. Its objectives were to define the “scientific” organization by measuring cost, productivity, throughput time, volume, speed and etc. most of which are still used in today’s measurement system. Such excellence was achieved through specialization and “division of labours” and was driven by Adam Smith’s idea of value-maximization, which pervades economic and management theory. It is very much a “result-driven” excellence, which still has resonance in today’s excellence theories. Amongst the many great thinkers who theorized the concepts of operational excellence, were Adam Smith, Frederick W. Taylor, Henry Ford, Taiichi Ohno and Genichi Taguchi, to name just a few.

September 2011

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  • This sounds a good book, Dawei. Would you like it ordering for the Library? If so, can you let me ha… by Helen Ireland on this entry

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