Wikipedia – “Strategy is a high level plan to achieve one or more goals under conditions of uncertainty.”

Michael Porter - "The emphasis being placed on strategic planning today in firms reflect the proposition that there are significant benefits to gain through an explicit process of formulating strategy, to ensure that everyone is directed at some common set of goals"
I have to believe that, other than leadership, there are more books, articles, blogs and lectures on strategy than any other business subject. Michel Porter's book, "Competitive Strategy”, first released in 1980, may just be the bible of strategic planning and development. The book has over 60 reprints and has been translated in over 20 languages. What makes it so compelling today as when he first wrote it is that the concepts are still very relevant today. The ideas of creating a unique opportunity for your company's product or service while understanding the competitive factors that will affect its success has not changed much over the last 30 years. What has changed is the technology that is needed to drive sales and the analytics available today to identify specific markets and customers.

Before getting behind closed doors with your leadership team to develop your company's strategy for the future, there are three main planning components that need to be thoroughly understood: pre-planning, planning, and execution.

The pre-planning phase involves the development of the company's purpose and truly understanding why the business exists, followed by a thorough understanding of the organization's profile, a strategic industry and market analysis, and a deep and intellectual understanding of the company's systems and brand.

It starts by being able to answer these questions: "Why do we exist and what is our purpose for being in business?"

In researching how companies, large and small, answer these questions, the one thing that became clear is that there is not a standard answer. Companies around the world have created their own versions of purpose statements, mission statements and vision statements. Some are very succinct in their approach, while others roll all three statements into one. What matters is that the company has an identifiable statement that is unique to them and is a declaration of the company's reason for existing.

I use the word 'purpose' to include all the statements - purpose, mission, vision - as well as the guiding principles that embodies the company's core values and support and validates a mission statement.

A Purpose Statement expresses the fundamental reason for your existence, from a business perspective. It answers the question: “Why do we exist?” It is the force that motivates and drives why you are in business. This statement is short and typically projects an emotional action, a rallying cry for all the employees and stakeholders. It is clear that very successful companies have been able to inbred their purpose within the fabric of the organization and deliver it to their clients and consumers.

Examples of Purpose Statements: 

  • 3M: Our purpose is to solve unsolved problems innovatively. 
  • Walt Disney: Our purpose is to make people happy. 
  • Hewlett-Packard: Our purpose is to make technical contributions for the advancement and welfare of humanity.
  • Walmart: Our purpose is to give ordinary folk the chance to buy the same things as rich people.

A Mission Statement is a written declaration that guides the company's path and provides the framework for the formulation of overall strategies. I always suggest that this statement be a single sentence that expresses what you do, for whom and how. Once developed, it should be so clear that you shouldn't have to memorize it - it's what the company is all about.

Examples of Mission Statements:

  • Stewart: “We improve communities by fulfilling our clients’ visions through a creative, thoughtful, and collaborative approach.”
  • Aflac: To combine aggressive strategic marketing with quality products and services at competitive prices to provide the best insurance value for consumers.
  • Applied Materials: To be the leading supplier of semiconductor fabrication solutions worldwide through innovation and enhancement of customer productivity with systems and service solutions.
  • Microsoft: We work to help people and businesses throughout the world realize their full potential. This is our mission. Everything we do reflects this mission and the values that make it possible

A Vision Statement is an aspirational statement - also called a picture of your company in the future. Your vision statement is your inspiration and the framework for all your strategic planning. What you are doing when creating a vision statement is articulating your hopes and dreams. A vision statement may apply to an entire company or to a single division of that company. Whether for all or part of an organization, the vision statement answers the question, "As a stretch goal, where do you see the company in ten years?"

Examples of Vision Statements:

  • Stewart: Our vision is to be the Premier multi-discipline engineering and design firm in the Southeast.
  • Alzheimer’s Association: Our vision is a world without Alzheimer’s. 
  • Habitat for Humanity: A world where everyone has a decent place to live. 
  • Hilton: To fill the earth with the light and warmth of hospitality.
  • CVS Caremark: To improve the quality of human life.
  • Toys 'R' Us: To put joy in kids' hearts and a smile on parents' faces.

Guiding Principles are short statements that support the mission and vision statements. They express what's important in the organization and include core values and investments such as safety, employee trust and respect, technology, quality, diversity and inclusion, the environment, social responsibility, and reasonable profits.

Examples of Guiding Principles:

  • Chandler: Safety without compromise.
  • J.W. TownsendTo use proven and innovative horticultural practices to deliver beautiful landscapes.
  • Buckner CompaniesCommitment to environmental responsibility and sustainability
  • Sargent MetalBy providing personalized client service and always striving to exceed our customer’s expectations.

Business Intelligence

Organizational Profile - Through a comprehensive assessment, understanding your leadership team, people and the structure they operate in; what kind of culture exists within the organization; who are your top customers; and what are policies and guidelines that affect decision making.

Strategic Analysis - Several analysis are necessary before strategic decisions that drive growth and sustainability are made. A competitive analysis is a must and should include Porter's 5 forces of competition - rivals, barriers to entry, substitutes, and the influence of vendors and consumers on your product or service. Other analyses include your industry's economic trends, customer purchasing trends, and your geographic economic situation. Also, you need to know how much market share each of your products or services own. Lastly, what are the environmental factors beyond your control and how will this have an effect on your business.

Business Systems - It is necessary to understand the company's financial position regarding liquidity, cash flow, revenue and profitability forecast before a growth strategy is planned. The company's value chain process should be clearly articulated as well as an analysis showing how the company's value chain compares with others in the same space. You must also know how the company is positioned regarding its current technology and its  investment in innovation as well as pioneering new products and services.

It seems like a lot of effort but I suspect that much of this information is already available; it is now a matter of bringing it together and reviewing it with your leadership team before moving to the planning stage. This knowledge is paramount prior to the strategic planning meeting - without it, you would be setting goals and strategies in a vacuum. The next step in strategic planning is the actual meeting, perhaps offsite, to review previous goals and set new ones. The next blog will explain the process I have successfully used with many companies.
 


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