Vision, Mission, Strategic Objectives & Business Strategy
Strategic Objectives, Business Strategy, Digital Transformation, Agile Management, Lean Management, Six Sigma, Leadership, Business Sustainability, Corporate Social Responsibility (CSR), Customer Relationship Management (CRM) and the list goes on and on. If you are involved in the business environment you must have heard these words thrown around like crazy. However, did you ever stop and think, really think, what all this means for your business? Whether managing a small shop with a few employees or running a large corporation, all the above affects your ability to perform and excel in your market.
In the ‘What does that Mean’ article series we are going to explore and understand what they really mean, their importance for your business and their possible effects on your business; small or large as it is. We are going to start off at the very beginning, strategic objectives.
Strategic Objectives
The main objective/goal of every business is to make money, however this could hardly be considered as a strategic objective. That cannot be the sole purpose of your business. Strategic objectives are those targets, which if reached, will make the business profitable. These objectives look at the bigger picture and drive everything, from strategy to actions (short and long term) and processes. Usually, strategic objectives are built on the vision and mission of a business.
But wait! What is this vision we mentioned … The vision describes the long-term goal of a business, it is essentially why the business exists in the first place. For example Apple’s vision statement reads “We are here to create the best products on earth and leave the world better than we found it”. A vision statement describes the future aspirations of a business. It defines the dream, the long-term goal, and the unconditional direction where the business is heading. The statement is not tied to any future funding, difficulties of any kind, or current resources. The vision statement should be ambitious, clear, forward-looking, motivating, inspirational and aimed at bringing benefits and improvement to the business.
And what about the mission then?! … The mission of a business describes the ‘how’ it is going to fulfil its vision. For example Apple’s mission statement reads “to bring the best user experience to its customers through its innovative computer hardware, computer software and services”. Essentially, what Apple are saying is that by offering innovative and high quality products, software and services they want to make the world a better place. A mission statement should drive everything a business builds and does, and ultimately define the strategic objectives from their vision and mission statements. Both the vision and mission statements are dynamic which means they can change from time to time and be updated or changed.
Now that we know what vision and mission are, let’s turn our attention back on strategic objectives. As stated before, strategic objectives are a set of goals/targets that a business needs to achieve in a stipulated time-frame in order to be successful. Strategic objectives need to be well defined and planned. In order to have functional strategic objectives they should be S.M.A.R.T …. Wait! What! … What do we mean by objectives being S.M.A.R.T? Well let’s have a look at what S.M.A.R.T stands for.
S is Specific – Strategic objectives need to state exactaly what you want to accomplish, be clear, straight forward and leave no room for any interpretation other than that which you intend. Here you have to lay out numbers and deadlines. For example an art museum could set the strategic goal of reaching 4000 visitors by April 2021. That is specific because the goal is clear, there is a number to hit and a deadline by when it needs to be done.
M is for measurable – Here you have to make sure that your strategic objective can be tracked and measured, otherwise you wouldn’t be able to determine if you were successful or not. Don’t hide behind buzz words such as ‘social influence’ and ‘brand engagement’ … that’s what statistics and data collection are for. In the case of the art museum the objective is measurable.
A is Attainable – Make sure that the objectives/goals you set and challenging but possible. Here you need to be careful and consider your limitations such as space, time, flow, money, etc … remember, Rome wasn’t built in a day!
R is for Realistic/Relevant – You have to be honest with yourself about your objectives. Consider your capabilities and that of your team and the situation in general. To use the example of the art museum that has the objective to have 4000 visitors, let’s consider the current covid-19 situation … do you think it is realistic to set such an objective? You don’t want to demoralise yourself or team with unrealistic expectations.
T is for time-bound – Every objective should have a deadline. Don’t keep pushing towards a goal you might reach ‘one day’. If need be re-assess the situation and set new revised objectives.
An important aspect of strategic objectives is that they need to be known and made very clear to every employee within the business.
A way of determining how successful, healthy and promising a business is, is to check if they are reaching their strategic objectives, because short-term financial gain alone does not determine the overall success of a business.
Business Strategy
Once you have your vision, mission and strategic objectives you can start working on your business strategy. Business strategy can be explained as a course of actions and decisions which help you and your business to achieve your strategic objectives. A business strategy lays down and illustrates the way to success by carefully planning how to secure a competitive market position, plan the operational side of the business and ensure customer satisfaction in order to achieve the desired objectives. In a nutshell a business strategy outlines how business should be carried out to reach the desired ends.
There are 3 levels to business strategy:
Corporate level strategy: Corporate level strategy is a long-range, action-oriented, integrated and comprehensive strategy articulated by the top management. It is used to establish business direction, expansion and growth, takeovers and mergers, diversification, integration, new areas for investment and so forth.
Business level strategy: The strategies that relate to a particular business are known as business-level strategies. It is developed by the general managers, who convert mission and vision into concrete strategies. It is like a blueprint of the entire business.
Functional level strategy: Developed by the first-line managers or supervisors, functional level strategy involves decision making at the operational level concerning particular functional areas like marketing, production, human resource, research and development, finance and so on.
Independently from the size and nature of your business there’s always a need for multiple strategies at various levels. Therefore, a typical business structure always has three levels.
Maybe you are thinking that these principles do not apply for your business because you’re too small … well think again! Just the process of thinking through these things will give you a better perspective of your business, why you are doing it, how you are going to do it, who your competitors are, what are your disadvantages and advantages, what are the risks and opportunities and what you can offer or do better than your competition. All these questions, together with other information will help your business succeed.