In several firms I’ve worked with, I couldn’t help but notice that supply chain managers would sometimes be engrossed with priorities regarding compliance to government-mandated occupational safety & health standards. They would have long meetings and spend much time on the nitty-gritties of reports to be filed and procedures to follow.
But in the following week, the same managers would switch to issues regarding costs that were going over budget. The general manager of their company was concerned about expenses and wanted a meeting so the supply chain managers would be rushing to prepare their presentations to explain their respective functions’ spending.
Priorities would shift week after week, month after month. One day it would be safety, the next day it would be quality. When managers would ask which priority is more important, their boss would reply: “all of them.”
There are two (2) types of priorities enterprise executives deal with. These are competitive priorities[i] and non-competitive priorities.
Competitive priorities are those when addressed add value to the enterprise. Examples are sales, cost, quality, delivery reliability, and after-sales service excellence. As the term suggests, these priorities directly contribute to an enterprise’s competitive advantage.
Non-competitive priorities are those that executives do not recognise as adding value to the organisation but are too important to ignore. Examples are safety, security, industrial labour relations, community relations, government regulation compliance, environmental safeguards, and employee health. These priorities may not contribute to an enterprise’s competitive advantage but are imperative to its ongoing operations.
Enterprise executives see competitive priorities as vital to the organisation’s growth. Consumer goods executives, for example, would develop marketing and product initiatives to bring about higher sales.
Enterprise executives, on the other hand, see non-competitive priorities as crucial to the organisation’s survival. Executives, for example, would stress industrial safety as a program to prevent injuries. They would expect their organisations to adopt safety practices so that people don’t get hurt, and not lead to disruption in operations.
To put it in another way:
- Competitive priorities address opportunities.
- Non-competitive priorities address adversities.
Classifying priorities in either category may help enterprise executives not only what to tackle first but also determine who should be leading the respective priorities.
Quality and safety are everyone’s jobs but if there are no quality control or safety managers to lead priorities in either one, then it would probably be chaotic for the executives trying to handle them on top of the other important things they have to do.
It also pays to have awareness of the two types of priorities to know how they would affect the enterprise. Classifying community relations as a non-competitive priority, for instance, may prove worthwhile for an enterprise who has a factory situated within a largely populated city. It would encourage executives to invest in a manager who would engage with the factory’s neighbours and handle issues that might result in mutual benefits.
Being mindful of competitive and non-competitive priorities also gives the organisation a constant big picture of the work it’s doing. Engineers building a new storage facility, for example, would best have an understanding of what they want to accomplish. It wouldn’t just be about building for more capacity; it would also be about the impact on working capital, better distribution of products, reduction in damages, and safer working conditions.
Executives can sharpen their enterprise strategies with their awareness of both competitive and non-competitive priorities. The trick is to have balance and brevity. Some company mission statements tend to stress too much on quality and leave out the rest. Other corporate philosophies overdo it with numerous paragraphs that overwhelm the organisation.
We all have priorities. We just need to understand which ones are competitive and non-competitive in which the former addresses opportunities while the other takes on adversities. Both are too important to ignore so it would help if we classify the things we do as either competitive or non-competitive.
If we can’t do things all at once, we may need to check our structure and resources. We also should try to make sure our overall strategies aren’t complicated or overwhelming for our own organisations.
[i] Davis, Mark M., Aquilano, Nicholas J., and Chase, Richard B., Fundamentals of Operations Management, 1999, Chapter 2, p. 25