Why operational business decisions are strategic

by Stefaan Lambrecht

11/09/2017

Why operational business decisions are strategic

Everyone agrees that having a profound mission statement and vision is vital for every company. Long-term goals to strive for give direction to every layer of your company. We all recognize the importance of strategic decisions, which act as step stones towards these goals. That is why strategic business decisions tend to be carefully discussed and planned.

But what is often overlooked is the importance of a company’s operational decisions in fulfilling the strategy. Every company has daily decisions that are key to their success. Taking a wrong decision here could hurt your organization in terms of profit, reputation, etc. Certainly, if this is happening systematically. So why don’t we pay as much attention to these success-critical decisions as we do to our strategic ones? If we are not structurally taking the right decisions at an operational level, we can only dream about achieving our long-term strategic goals.

I know for sure that your company is taking these decisions every day, and you may not see the advantage in investing time and effort into them. However, structuring these decisions and automating them using a decision model has numerous advantages though. It increases the flexibility and efficiency of your organization, as well as the consistency of decisions taken. It puts the business back at the steering wheel, as they can govern the rules and decision logic without needing to involve their IT-department. And in today’s dynamic world, there is one thing we always need to prepare for: change.

In most companies, the decision logic for operational decisions is locked up in Process Models. Not only does it make the process complex and hard to understand, it also makes it less dynamic. Every time a rule needs to be adjusted the process will have to be adapted too — a time-consuming task with a high chance of errors slipping in. And if your decision logic is still locked up in software code, you’ll need the help of the IT department for every change. Today’s business environment is uncertain. Existing regulations are adapted frequently, and new ones are created globally. If there is one thing we cannot afford as a business, it is to be rigid and inflexible. The creation of new regulations also requires a higher level of auditability. Modeling your key decisions will allow you to trace them back to the rules and regulations used to come to a conclusion, increasing the traceability of your decisions.

Yes, initially you will need to spend some time deciding which operational decisions are key to your business and structuring them into decision models and tables. But this effort will make your company agile and will save you time in the long run. You will no longer depend on the IT department to make an adjustment to your decision rules. The business itself will be able to govern and adapt the rules, putting them back in control and returning them business ownership. And updating your decision tables in accordance with the latest legislation will take far less time and effort than before. Model effectively once, adapt and execute flexibly in the future.

To set our companies up for success, we need to invest time in the key short-term decisions. Instead of only focusing on the strategic moves our company wants to make, we should expand our focus to the day-to-day decisions that will enable our growth. Invest time now, and the company will be ready to face the future.