Activities may vary greatly according to the various job functions in a firm. But broadly, you can classify activities into two groups:
1. Activities that focus on the short term, that help your firm achieve its tactical or operational activities.
2. Activities that focus on the longer term, that help your firm achieve its strategic objectives.
Michael Porter, in his article What is Strategy? (hbr.org/product/what-is-strategy/an/96608-PDF-ENG) points out that strategy rests on unique activities. He says “Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value.”
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When it comes to management, there are two sets of activities – activities that need to be maintained and activities that need to be upgraded.
Activities that need to be maintained
A firm should maintain those activities where the current performance levels and results are satisfactory. The goal is to maintain that state, which can also be called as the controlled state. In this state, the firm clearly knows what inputs and process produce what outcomes. There are only two things to do:
1. Standardize the inputs and process
2. Monitor adherence to standards
Easier said than done. There are always variations that contribute to less than perfect results that need to be “managed”. There may be many factors that contribute to poor performance. But, only a few are significant enough to influence results. Careful management is required to control these “significant influencers.”
A good approach to manage these significant factors is the EAR approach – Eliminate, Automate and Reduce.
Activities that need to be upgraded
A firm should upgrade its activities where the current performance levels and results are not satisfactory. A level of performance needs to be achieved. The goal is to define a new state, lets say the desired state, and achieve it.
There are several documented approaches to doing this. Business Process Reengineering was one of them. You can select the right approach based on your industry and other requirements, but they involve the following broad steps:
1. Define the new state
2. Identify alternative inputs and processes
3. Evaluate and test the various combinations to get to the desired state.
4. Apply the EAR approach as you go, so you can get the maximum benefit.
5. Standardize the inputs, process and monitoring approach.
On many occasions, this requires a cross functional team and some external help.
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