By: Anton Herbst, managing director of A.C.T

I’ve discussed strategy in this column a number of times before and in all likelihood, this won’t be the last time it comes up again.

That’s because a sound strategy is imperative to all companies’ success and often, companies that are in trouble as a result of any number of factors can turn to their strategy for answers on how to get through that difficulty.

While most business people understand the value of having a sound business strategy, few realise that unless their strategy is tightly married to the operational and tactical management of their company, it’s unlikely to get them anywhere.

Don’t get me wrong. Many companies are excellent at managing their business, and have neat, clean and efficient operations.

But, unless their strategy is present in the way they manage their operations, their company could potentially be headed in a direction that’s completely opposite to what the business heads want.

The strategy is after all where the understanding of who the customer is, what they need and how best the company can best service those needs resides.

The company’s strategy is also the place that the company’s posture towards opportunities and threats in the market, economy, legislative environment and business climate at large is defined.

If a company doesn’t marry its operational management to its strategy it’s likely to plod along year after year, missing out on opportunities or being broadsided by changing market forces.

Ironically, these are the companies that refer back to their strategies questioning why these factors affected them so badly, only to find that their strategy catered for these eventualities perfectly – the company just didn’t follow the strategy.

Marrying these two domains together is the only way to truly succeed, but it’s also far easier said than done.

It often means a complete re-engineering of a company’s measurement methodologies so that matters at a strategic level is translated into key performance indicators for staff.

This means, for example, where a stock-picker was previously measured on how quickly or accurately they picked an order, they will now be measured on how effective they are at building customer loyalty.

But can you imagine the reaction if you told your stock picking team that they will now be measured on customer retention?

That’s the reason the team’s key performance indicators need to be set up to drive the kind of outcome the business strategically required.

So, while customer retention is one of the strategic objectives of the business, the business will need to ask itself – from a stock picking perspective – whether it’s more likely to retain customers if stock is picked quickly or more accurately. And possibly entertain the idea that the answer lies in a combination of the two.

Figuring out what the tolerances or perfect combinations are, remains the challenge.

Knowing the answer to this however allows the company to operationally manage its stock-pickers to drive customer retention.

And that’s the reason the link is so important.