Page 385 - Operations Strategy

360 The proCess oF operaTIons sTraTegy – monITorIng and ConTrol

Figure 10.11 double-loop learning questions the appropriateness of operations
performance

Question the relevance
Examine the performance Compare this performance of objectives
of operations processes against objectives

Develop new (more
relevant) objectives

Operations Develop new insights
innovation and capabilities

need double-loop learning for continual reflection upon their internal and external
objectives and context. There has to be a continual balancing act if a sustainable posi-
tion is to be developed. An operation may even have distinct phases or locations where
it emphasises single- or double-loop learning, where companies will periodically
engage in double-loop learning, searching to challenge accepted values and objec-
tives, while at the same time maintaining some (single-loop) operational routines.
Inevitably, perhaps, this means a degree of tension between preservation and change.
For an operations strategy this tension is particularly keenly felt. The need for manag-
ers to question and challenge what is currently practised is clearly important but, at
the same time, operations are largely responsible for delivering the already established
organisational mission.

appropriating competitive benefits
One of the most surprising aspects of innovation is that, even if change works, and
even if a market is created for a new product or service, there is no guarantee that the
innovating operation will benefit commercially from the results. A critical question to
ask in all strategic decisions is, ‘Who actually captures the profits?’ Powerfully innova-
tive firms, such as Xerox in the US (that invented many of the core personal computer
and interface application concepts) and EMI in the UK (that developed one of the most
widespread medical revolutions – magnetic resonance imaging), have failed to gain
full competitive benefit from their efforts. The issues of appropriation (i.e. getting the
benefit from innovation) are particularly significant for operations strategy because,
as we discussed in Chapter 5, ‘partnership’ relationships have become more impor-
tant. Products and services are often developed jointly with customers, and companies
are increasingly actively sharing knowledge with suppliers. For example, firms such
as Bose have adopted particularly close relationships with suppliers, often involving
exchanges of key staff. It is argued that the benefit for the customer is instant access
to ‘rich’ supplier expertise on a range of current and future product issues. The main
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benefit for the supplier is the ‘opportunity’ to learn of ‘potential’ new contracts.

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