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Libby Marks

Operations Strategy 101: A Blueprint for Project-Based Businesses

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.

What is an operations strategy? 

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.

  • A product-based business needs to consider manufacturing, supply chain management, and distribution in a way that a marketing agency, software studio, or consultancy does not. 
  • A professional service business will be more concerned with customer-driven strategies, service strategies, and process improvement.  

This article focuses on operational strategies for professional service businesses - particularly key success factors related to people and process optimization.  

Why does a professional service firm need an operations strategy?

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: 

  • Use resources more effectively
  • Improve quality control 
  • Reduce risk
  • Recruit staff
  • Retain clients
  • And more 

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.

Operations strategy: There’s no one-size-fits-all 

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:

  • Overarching corporate strategy (pursuing growth, market share, cost efficiencies)
  • Economic conditions (recession vs economic upturn)
  • Your business strengths and weaknesses
  • The competitive landscape 

With that in mind, let’s look at some tried-and-trusted operational strategies that could work for you. 

Eight types of operational strategies 

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. 

1. Cost leadership operational strategy 

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

2. Efficiency operational strategy

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.

3. Differentiation/innovation operational strategy 

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. 

4. Specialization operational strategy 

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. 

5. Core competencies operational strategy

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.

6. Quality operational strategy

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. 

7. Customer-centric operational strategy 

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. 

8. Agility operational strategy

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

10 key elements of an operations strategy 

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. 

Service delivery model

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.  

Client relationship management

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

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

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 

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].

Technology and tools 

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. 

Quality management and continuous improvement

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. 

Recruitment, retention, and development 

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 

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. 

Risk management

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.  

Five final ingredients for your operations strategy

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. 

Strategic alignment 

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. 

Goals and Key Performance Indicators 

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

Market analysis 

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). 

Implementation plan

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. 

Communication plan 

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.

What are the benefits of an operations strategy?

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.

  1. It aligns everyone to the same goals 

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. 

  1. It maximizes profitability  

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

  1. It improves quality and customer satisfaction

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. 

  1. It reduces risk and protects relationships  

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.  

  1. It helps you get better

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.  

  1. It makes you more innovative 

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

It’s a knockout

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. 

  • See resource capacity, availability, workload, skills - and more - at a glance
  • Drag-and-drop resources into projects and see their availability in real-time
  • Easily monitor project budgets and schedules - and fix any issues, fast
  • Explore the impact of different project combinations with ease 

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.

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