.png)
A strategic plan provides a clear path of long-term action for a company that focusses the channeling of resources towards the key business activities that will deliver the plan. The basic elements are: as follows:
Defining the company's mission, vision and core values;
Setting objectives to deliver the mission and achieve the vision; and
Executing the achievement of the objectives with tactical business activities.
Mission Statement
A mission statement is a simple and concise statement of a company's reason for being that encapsulates why it exists and what sets it apart from others in the eyes of its customers. It should be easy to recall by employees, as well as inspiring to align and motivate the entire organisation behind a common purpose. Examples of mission statements from Amazon, Google and Apple are as follows:
Amazon: "To be Earth's most customer-centric company"
Google: "To organise the world's information and make it universally accessible"
Apple: "To bring the best user experience to customers through innovative hardware, software and services"
Vision Statement
A vision statement describes what a company aspires to become in the future, generally in a time frame of 5 to 10 years. It highlights what it aims to achieve in terms of its long-term growth and desired impact on the world. Like the mission statement, the vision statement should be simple, inspirational and easy to recall to provide clear direction and motivation for all employees working in the organisation. Examples from Amazon, Google and Apple are as follows:
Amazon: "To build a place where people can come to find and discover anything they might want to buy online"
Google: "To provide access to the world's information in one click"
Apple: "To make the best products on earth and to leave the world better than we found it"
Core Values
Core values are the deeply held convictions and beliefs that guide the conduct of everyone working for the company. They define the culture necessary to achieve its mission and vision and underpin the hiring of like-minded people into the organisation, A good rule of thumb is to limit the number of values to between three and seven. Amazon, for example, identifies the following four principles as its core values:
Customer obsession rather than competitor focus
Passion for invention
Commitment to operational excellence
Long-term thinking
Strategic Objectives
Strategic objectives are long-term goals a company is focussed on achieving in the next 3 to 5 years derived from its Vision and Mission Statements. They guide the prioritisation of resource allocation towards business activities in the preceding years that will ensure they are achieved, They typically consist of objectives that will either:
Materially strengthen the company's ' infrastructure (ie. people, systems and processes) to underpin its longevity and scalability.
Generate transformative company growth, such as:
adding new products and services to the its existing business offering;
entering new customer markets in different industry and geographic sectors;
leveraging its' core skills and infrastructural strengths to develop new business models; and
Implementing new technologies that materially reduce operating costs, facilitate more intelligent decision making, or improve the customer’s experience.
Create sustainable competitive advantage, for the company's businesses, for example, through
entering into exclusive agreements with major suppliers, customers, governments and/or strategic partners.
developing unique intellectual property that competitors don’t have, such as new brands, service delivery processes, products or technologies that can be protected by registered trademarks, designs, copyrights and patents.
creating switching costs for customers that make it difficult for them to switch to competitors, for example, by selling them a package of products and services; and
seeking to generate cost efficiencies through economies of scale to facilitate charging the lowest price for products and services without impacting margins, service or brand.
Strategic Objectives, should be capable of being defined, measured, actioned, relevant to the business mission and vision and being achieved in a particular time frame. The following SMART acronym encapsulates these guiding principles:
Specific
Measurable
Achievable
Relevant; and
Time-Bound
Tactical Activities
Tactical activities consist of all business work programs that will help achieve the company's strategic objectives. They could be:
multi-department projects that require investment in people, technology and/ or plant & equipment; or
work initiatives that belong to one department where investment may or may not be required.
Projects and initiatives should be broken up into quarterly deliverables/ milestones that the company's senior executive team can monitor at the end of each quarter to ensure they are on track to being achieved.
It can therefore be seen that strategic planning is a process of giving a company a sense of direction by analyzing where it currently is and where it wants to be. Think of it as a plan of action that enhances success and growth by clearly defining the path that a company should take and aligning and motivating everyone working for the company to achieving it..
Comments