page director: Brian D. Butler

contributors:  

if you are interested in contributing see here

Table of Contents:

Vision, Mission & Other important Strategy statements

The key question for business strategy statements is whether or not they are clear and inspiring enough that everyone in the organization can remember them, and be inspired by them.  With 40 words or less, can you summarize your companies strategy?  If you polled your senior managment team, would they agree?  Would your employees?

Hierarchy of statements:

From the top-down, from more general to more specific, the order of company statements is as follows:

1. Mission Statement
2. Values Statement
3. Vision
4. Strategy - objective, scope, advantage
5. Balanced Scorecard

1.  Mission statement: 

Mission:  In its simplistic form, the mission statement tells why your company exists.   This is the ultimate purpose for which your company exists, and is the most broad.  This is the underlying motivation for being in business in the first place.

2.  Values statement: 

Values: Beliefs that are shared among the stakeholders of an organization. Values drive an organization's culture and priorities.  These are the ethical values under which your firm will operate.

3.  Vision statement

Vision: Defines where the organization wants to be in the future. It reflects the optimistic view of the organization's future.

4.  Strategy Statement

Strategy:  It defines where the organization is going now, describing why this organization exists.  To be effective, a strategy statement should only have three essential parts:

1. objective - what you are going to achieve.  Note:  if you dont know where you are going, then any road will get you there!   Many companies, however, mistake the strategic objective with the companies values or mission statement.  But, as this is further down the hierarchy, it should be more specific.   When crafting an objective, companies should seek to be very precise about how the objective is strategic.  Note that while many companies may share the same mission statement, and some companies might share the same values or even vision statements, there should never be two companies that have the same strategic objective.   The objective should be a single goal so as to not leave room for confusion about multiple goals.   It should also have a clear time for when you want the objective to be achieved.  Finally, the objective should be measurable.
2. scope - what you will not do (this sets the boundaries clearly for employees).  This is important so that employees dont waste time coming up with plans that will later be shot down by management for not meeting the scope requirement.  The scope should define what type of customer you are targeting, where they are located, and more importantly it should tell you about what types of customers you will not go after and what markets you will not enter.
3. advantage - what is your unique competitive advantage (that only you can deliver).  This is the essence of the strategy statement.  What will your company do differently, what will be your value proposition, and how is only your company able to do this.  To map out this value proposition graphically is extremely useful.

When crafting the strategy statement for a firm, there will likely be trade-offs between market share and profitablity.  Do you seek the most marke share?  (if so, you may suffer a lower profit margin).  Or do you seek higher profit margins (and risk capturing a lower market share)?   According to Michael Porter, it is this trade-off that defines the "fundamental strategy" of a firm.

5.  Balanced Scorecard

A tool to help companies implement the above plans.  see more externally: balanced scorecard

The importance of communicating these statements

The key is to communicate these elements effectively so that all interests are aligned, and the company is effective at moving forward toward the goal.

More Links from KookyPlan:

•  strategy

//