Your need-to-know guide to creating and executing a successful operational strategy.
In the dynamic theater of project-based businesses, where each act unfolds as a unique challenge and opportunity, there exists a backstage marvel that orchestrates the seamless execution of every performance – operations strategy.
Professional service firms need operations strategy to navigate unique project challenges and deliver excellent results on time. It's the foundation for efficiency and success.
Here's everything you need to know about operations strategy and how to create one to yield tangible benefits.
An operations strategy is a plan that sets out how your operational activity will deliver growth and other strategic objectives. It supports your overall business strategy and is typically written after your corporate strategy has been signed off.
A company’s operations are everything it does to deliver a product or service. So operations management covers a lot - from recruiting the right people to refining your products and processes.
As you might expect, operations strategy in a product-based business looks very different from operations strategy in a professional services business.
This article focuses on operational strategies for professional service businesses - particularly key success factors related to people and process optimization.
An operations strategy is all about building a competitive advantage. And, as all professional service businesses know, it’s pretty competitive out there.
Competition for clients. Competition for talent. Price competition… An operations strategy helps you identify sources of competitive advantage and pursue them.
Consider this.
Your business fortunes rely on your ability to meet customer needs and deliver services in a cost-effective way. All of that activity falls under the umbrella of ‘operations management’. So it makes sense to be strategic about it.
Documenting your operations plans and processes helps you develop competitive strategies to:
We’ve got more on the benefits of operational strategy at the end if you want to know more. We just wanted to get to the good stuff first - like how to write one.
When you develop your operations strategy, there are numerous different approaches, depending on your company’s business model.
From becoming more customer-centric, to achieving cost efficiencies, or being known as the market leader….There’s no one-size-fits-all operations strategy.
You need to consider your unique position in the market - what you offer, who your competitors are, and where you hope to be in the next 3 to 5 years.
Your choice of operations strategies will depend on factors, such as:
With that in mind, let’s look at some tried-and-trusted operational strategies that could work for you.
Here are eight types of operations strategies that are suitable for a professional services firm.
Think about your overarching business strategy, objectives, and competitive priorities. This should help clarify which would work best for you and your organization.
Become the lowest-cost provider of your service
The goal is to offer services more cheaply than competitors while maintaining acceptable levels of quality. To achieve this, you’ll need to optimize core business processes to reduce costs, minimize waste, increase efficiency, and look for economies of scale. There are many ways to improve cost efficiency, far too many for this article, so we've dedicated a separate post to it:
13 Ways to Improve Cost Efficiency in Your Project Business
Deliver the best service using the least resources
This strategy is all about efficient systems and processes. It focuses on minimizing waste and improving productivity. It is similar to the cost leadership strategy but the aim isn’t to reduce costs to the customer, it is to increase profit margins for the business. Check out our ultimate guide to improving operational efficiency.
Offer something unique to the market
These business strategies aim to offer something that nobody else does. To achieve this, you’ll need to invest in innovation, product development, quality, customer service… It isn’t about driving down costs but standing out in a competitive market.
Tailor your services to a niche market
This strategy is about identifying a specific market you could profitably serve - then meeting its unique needs. You develop deep insights into the needs of the niche and become the go-to service provider for businesses in that segment. For example, niching down into maritime software instead of general software development.
Lean into your organizational strengths
The core competencies strategy is a little like specialization. But instead of looking outside to the market, you look inside your business. What unique capabilities does your team have that could deliver competitive advantage and create a USP that sets you apart? For example, a concentration of expertise in Higher Education marketing or app development for schools.
Be the best and stay the best
This strategy focuses on delivering superior services and constantly improving processes to maintain that quality, even as competitors catch up with you. It involves implementing quality management procedures, monitoring performance, and always looking for ways to optimize core business processes.
Be the business customers can’t get enough of
Famously, Amazon aims to be the ‘earth’s most customer-centric company’ and they’re not doing too badly from it. A customer-centric operations strategy focuses on understanding and meeting customer expectations better than competitors. This can involve seeking customer feedback to drive improvements to operations and services.
Be the fastest to capture new markets
This strategy is about having the speed and flexibility to get to market fast. It’s more relevant to product-based businesses. But professional service businesses can also use it. For example, harnessing AI to bring a new service to the market, or adding global contractors to your supply chain to provide 24-hour service.
Related content: How to Ace Agency Operations: 6 Levers for Growth
Now you know about different types of operations strategies - and you’ve decided which aligns best with your overarching business objectives - it’s time to get into the detail. What does an operational strategy typically include?
We’ve outlined 10 key success factors of a successful operational strategy below. It’s not a template as such, but something to help structure your thoughts. From client relationships to resource management, this is what should be on your agenda.
How you deliver services to your clients and what they can expect. For example, service channels (like in-person meetings, remote or hybrid delivery, online communication, etc), typical project workflows (from onboarding to sign-off), and service level agreements. You’ll include pricing strategy, cost structure, and client segmentation here too.
This is your approach to building and maintaining strong client relationships - not only by delivering great work but by providing exceptional customer service. For example, making it easy for clients to contact you, resolving conflict constructively, value-adding activities, and building in opportunities to surprise and delight. We've described eight universal client management skills here, if that's the area you want to improve.
Process design involves the processes you’ll use to ensure you deliver your services consistently and to the required quality. This might include diagrams of current workflows and the actions you’ll take to develop and further refine them. You may also speak to your team to understand bottlenecks and capture their suggestions for improvements.
Project management is all about your strategy for delivering projects on schedule and on budget - from how to forecast and estimate accurately, to planning projects and monitoring their progress. Plus how you’ll course correct if costs or timeframes deviate from the plan. Here's the skinny on effective project management to start with.
Resource management, another key element of an operations strategy, involves how you’ll allocate human resources to projects to ensure each project has the right people and skills at the right time. So that you deliver on time, on budget, and to quality standards. Not just on a single project but across your full project portfolio. [Read what our CEO Nicole has to say about moving from transactional to strategic resource management].
Not surprisingly, you’ll use technology to support operational objectives like increasing efficiency or reducing costs. For example, to help streamline workflows, automate processes, improve communication, facilitate collaboration, accelerate decision-making, enable outsourcing… and more.
Guaranteeing consistently high-quality services is also one of the key elements. Like creating standardized operating procedures, sharing best practices, conducting quality audits, gathering client feedback, implementing project retrospectives, and learning from failure and success.
Your processes for attracting and retaining top talent will define your operational strategy as well. Like forecasting future resource needs, building your employer brand, optimizing your recruitment practices, keeping employees happy and engaged, developing and training staff, performance management, and more.
Growth plans embrace how your business will grow to meet demand. For example, scalable processes, staffing structure, service development… Plus the practicalities that go along with that. Such as premises, equipment, recruitment, training, communication, maintaining quality control and compliance at scale, etc.
Your strategies to mitigate potential risk to service delivery are part of the mix. For example, reducing resource risk through effective resource management, creating contingency plans in case of emergencies, and scenario planning for different eventualities.
OK, they were ten things you need to think about when writing an operations strategy. But we’re not quite done.
It also needs to include the following five sections - to provide context, actions, and accountability.
Briefly describe the organization’s overarching strategy and objectives. These should be available in the most recent corporate strategy.
Explain how the operations strategy will support the delivery of those objectives. For example, adopting a cost leader strategy if the business is looking for more market share, or an efficiency strategy if the business is looking to increase profitability.
Define the goals of the operational strategy and the Key Performance Indicators that you’ll use to measure progress. For example, reducing variance between forecast and actual budgets, increasing your Net Promoter Score, improving your operational efficiency ratio, setting resource utilization goals, and more.
Related content: How to Measure Operational Efficiency
Include market analysis that explains your organization’s position in the market, the challenges they face, and the opportunities available to them. Include any research that describes customer needs, market trends, and competitor activity. This should inform your competitive priorities.
You can also conduct a SWOT and PEST analysis (but check whether these are already available from your organization’s marketing strategy - no need to reinvent the wheel).
Your operations strategy should include an implementation plan that outlines timeframes, actions, and people responsible. Consider using GANTT and RACI charts to make the schedule and stakeholders crystal clear. Remember to check progress against the plan with regular reviews.
An operations strategy is only effective if people are aware of the plan and their role in delivering it. A communications plan makes sure key stakeholders are informed and information is disseminated.
An operations strategy helps your business focus on how to improve your operations management - from better resource utilization to happier client relationships - and provides a roadmap to get there.
Here’s a quick rundown of why you need to create an operations strategy for your project-based business - if you don’t already have one.
Operations strategies provide a clear focus and direction for every team involved in service delivery. Everyone knows your operational objectives, how they ladder up to your overall business strategy, and has clear KPIs to work towards.
In a professional services firm, your people are your biggest asset and biggest cost. By outlining how you’ll manage human resources effectively, it reduces the money you waste when resources are underused and sitting idle. And cuts costs associated with disengaged staff, burnout, and turnover. Between this and process efficiencies, you can maximize profitability.
With a commitment to continuous improvement and sharing best practices, operations strategies drive up quality and customer satisfaction. Standardized processes - and a system for implementing them - mean success is scalable, whether you’re serving 20 or 200 clients.
Operational strategies proactively identify risks and set out measures to mitigate them. In other words, you have a Plan B for when things disaster strikes. This reduces the risk of disrupting service delivery or disappointing a client when things go wrong, and protects the reputation you’ve worked so hard to build.
It sounds obvious but having an operations strategy - one that includes goals and KPIs - helps you improve performance. It provides a benchmark for where you are now, a roadmap to improve, and a way to measure your progress. Without an operations strategy, new initiatives may be unfocused and unmeasurable - which means good ideas can’t be proven or rolled out more widely.
An operations strategy encourages you to think about how you can build competitive advantage and better meet customer expectations. As such, it encourages innovation - whether that’s in service development or process improvement. Either way, this increased creativity can give you an edge over rivals.
Ready to raise the bar in your business operations? Here’s what successful operations directors do differently.
An operations strategy is essential for any company that delivers professional services and client projects.
It provides a framework for developing competitive strategies around key success factors like resource utilization, customer relationships, and service delivery.
As such, it positions your business for higher customer satisfaction, operational efficiency, innovation, and profitability.
One way to improve operational efficiency is to harness the power of resource management software. It takes the time, pain, and risk out of resource allocation by automating all the fiddly bits.
It reduces your resource risk and improves your resource efficiency. No wonder it’s got static spreadsheets and chaotic Kanban boards on the ropes 🥊
Discover all the benefits in our buyer’s guide to resource management software.
