operational Effectiveness Is Not Strategy. For almost two decades, managers have been learning to play by new set of rules. Companies must be flexible to respond rapidly competitive and market changes. They must benchmark continuously to achieve best practice. They must outsource aggressively to gain efficiencies. And they must nurture a few core competencies in race to stay ahead of rivals. Positioning once the heart of strategy is rejected as too static for today's dynamic markets and changing technologies. According to the new dogma, rivals can quickly copy any market position, and competitive advantage is, at best temporary. But those beliefs are dangerous half truths, and they are leading more and more companies down the path of mutually destructive compe tition. True, some barriers to competition are falling as regulation eases and markets become global True, companies have properly invested energy in becoming leaner and more nimble, In many industries, however, what some call hypercompetition is a self inflicted wound, not the inevitable outcome of a changing paradigm of competition. The root of the problem is the failure to dis- tinguish between operational effectiveness and strategy. The quest for productivity, quality, and speed has spawned a remarkable number of management tools and techniques: total quality management, benchmarking, time-based com- petition, outsourcing, partnering, reengineering, change management. Although the resulting operational improvements have often been dramatic, many companies have been frustrated their inability to translate those gains into sustainable profitability. And bit by bit, almost imperceptibly, management tools have taken the place of strategy. As managers push to im- prove on all fronts, they move farther away from viable competitive positions. Operational Effectiveness: Necessary but Not sufficient. Operational effectiveness and strategy are both esential to superior performance, which, after all, is the primary goal of any en terpr But they work in very different ways.