When thinking of strategic versus operational within an organizational, the logical idea is that policies and procedures are firmly in the operational realm. Although strategy and operations are intertwined, there is no denying that policies and procedures are critically important within the context of the day-to-day operational activities within an organization.
Nevertheless, the management of this documentation has profound strategic implications for medium-size and large organizations, well beyond the ‘merely operational’. But how so?
Operations and Strategy: Two Sides of the Same Coin
As stated above, strategy and operations are intricately connected within any organization. The Board and executive management cannot make strategic decisions, including on safety matters, without taking consideration of operational realities. That may seem obvious, but too often organizations forget the importance of operational considerations upon strategic goals.
Policies and procedures, or the lack thereof, can have profound effects on safety management. This in turn can impact on the strategic choices of an organization. Sometimes operational decisions, which can include policies and procedures or adherence thereto, can be driven by strategic decisions from the very top of the organization. These can have negative consequences in both directions, i.e. strategically and operationally.
For example, a steel company chooses to be more competitive in the global market by reducing labor costs (a strategic decision). It does this by cutting spending on equipment maintenance and training of mill workers (both being operational decisions), resulting in increased equipment failures and loss of production due to the former and injuries in the workplace due to the latter. Both of these operational decisions could result in damage to the company’s reputation, which could have significant impacts on shareholder confidence and share price.
Shareholder confidence and share price are both very important factors in strategy. As such, policies and procedures cannot be solely at the behest of operational management. Those who make strategic decisions within an organization need to be aware of the policy management in said organization–not to mention fully comprehend that strategic decisions will have significant impacts on operational matters and performance.
A Change in Strategic Mindset
Safety management is too often downplayed or downgraded within an organization’s strategic thinking because it’s viewed as being a ‘problem-causing’ and not ‘problem-solving’ aspect of an organization. It is an irksome, begrudged need. Safety management can likewise be diminished by it being viewed as a ‘nice-to-have’ or somehow an incidental ‘luxury’ within an organization. Regardless of its reputation, safety management is a strategic factor that protects human capital, property, and therefore a company’s entire bottom line.
The owners and top management of any medium-sized or large organization cannot allow these assumptions to be made. Safety must be viewed by top management as problem-solving and absolutely essential to both the strategic and operational well-being of the organization. This approach will in turn suffuse the organization with the required safety culture, which must include a zero-tolerance attitude regarding non-adherence to policies and procedures.
Risk as Strategy and Organizational Values
Safety-focused risk management regarding safety is too easily ‘pigeonholed’ into being primarily of operational importance. Safety management is fundamental at the operational level of any organization. However, any organization that fails to appreciate the strategic implications of its safety risk management does so as its own peril.
An organization’s safety management system is only as strong as its documentation system, of which policies and procedures are a significant part. A commitment to a comprehensive, fit-for-purpose policy and procedure regime reflects an organization that is equally committed to the safety of its employees, visitors, suppliers and customers.
ConvergePoint is able to provide software that is scalable to any size organization. This includes our state-of-the-art Policy Management Software, built on Microsoft SharePoint.Our software also ensures a full audit trail due to this consistent method of storing documentation.
Related Article: Policy & Procedure Management: Organizations of All Sizes