“The big idea behind this book is that the way a company configures its operations to deliver this brand experience to customers – while delivering viable financial performance – is an opportunity for significant competitive advantage and marketplace disruption.” (p. 2)
Business Operations Models: Becoming a Disruptive Competitor by Alan Braithwaite and Martin Christopher (Leading Procurement Strategy, Humanitarian Logistics) is a book that sort of sums it all up on its own with the ‘big idea’ quote above. Changing the configuration of an operation to get a different result is a straightforward enough idea. Why, then, do you need to read beyond page 2? The answer to that question lies in the many case studies and visuals in the book. Needing to reconfigure your operating model for competitive advantage might be an easy concept to accept, but the execution is likely to be difficult.
Carrying out such a change requires a single coherent value proposition for everyone in the organization – those who touch customers or finished product and otherwise. According to Braithwaite and Christopher, the power of operational excellence has been underestimated in practice and from the perspective of shareholders and the board. I struggled with this idea a bit (because how could leadership not recognize the importance of an effective operational model to their success?) until I read their observations of corporate strategy statements.
“Strategy statements are most usually expressed in goal-driven terms based on market size estimates, competitive structures, price points in the market and high-level views of potential; their development is normally anchored in economic or competition theory. Practical operational capabilities are often taken as read, or not seen as a source for step-change performance.” (p. 3)
This latent potential exists for organizations who see the structure of their operations as a means to effect the value delivered to customers. Competitive advantage is compellingly characterized by the authors as not one ‘thing’ to be created but rather an inherent capability to be agile and dynamic (and therefore opportunistic) in response to shifting conditions.
Having an operational model is not unique – all companies have them – It is how and why you structure the operation a certain way and how that leads to competitive advantage the enables a company to be a disruptive force. The alignment of all functions in this way means that instead of brand vs. offerings vs. price point vs. performance, all of these (and more) come together cohesively.
Since I read this book from a procurement perspective, I appreciated the authors’ position that sourcing and supply should not be about functional optimization but rather contribution to operational excellence (hint, hint finance…) and the idea that any effort to lower costs must be done without damaging the value to customers in order to undercut the competition.
There is some lean thinking in the book, although the authors are not heavy handed about it. They mostly focus on lean methodology as a way to reduce operational waste such as inventory when it does not offer justifying value.
I think there are two target reader segments for this book. The first is executive leaders that want to transform their operation in a way that will alter their role in a market. The other would be managers in any of the operational functions mentioned in the book that have high aspirations and a vision for the true contribution they could make if they were positioned differently.