Strategy is not just about competing for today. It is also about competing for tomorrow.
When we talk about the future, strategy becomes a dynamic concept that allows top managers to define goals and objectives for the future and outline how these goals and objectives will be achieved.
A great way to define a company’s purposes, goals and values is, to have a formal mission and vision statement. Both are related to the main reason a company exists. Also, help the stakeholders to understand and keep that reason in mind.
The mission statement addresses the questions,
- Why do we exist?
- What is the fundamental reason for our organization’s existence?
On the other hand, the vision statement describes the desired future position of the company and answers the questions,
- What do we want to achieve in the future?
- Who do we want to become?
When trying to define the vision statement we should include specific goals and objectives. There is a subtle difference between a goal and an objective.
- Goals – help companies define what they want to achieve
- Objectives – are the specific actions and measures for achieving the goals
By setting goals, managers commit themselves to a concrete course of action that would allow them to accomplish the company’s vision. Goals can target different areas like growth, profitability, retention, efficiency or customer service.
Usually, goals are expressed as a percentage. When considering financials a company’s goal could be to increase revenue and decrease overheads which can be stated in the following way,
Increase revenue by 10% and decrease overheads by 5% in this financial year.
An example of an objective that will help achieve a 10% increase in sales is,
- Acquiring 5 new customers every month
Reducing overheads can be achieved by,
- Finding new and less expensive office premises or maybe outsourcing activities
Both are specific objectives that might allow a firm to reduce its overhead by 5%.
So, to achieve the goal of “Increase revenue by 10% and decrease overheads by 5%”, one can set those aforementioned objectives.
Another important question companies should answer is,
- How are we going to behave internally and in public?
- What do we believe in?
Here comes the role of the value statement in a company.
Maximizing the profit is important. But it is also important to uphold certain values and principles. This is why most organizations have a set of values they stay behind.
The role of the value statement is to define the firm’s values and place constraints on how the organization pursues its goals.
For example, Facebook or Meta’s values are –
- be bold
- focus on impact
- move fast
- be open
- build social value
These values are important for the talented individuals being recruited by the company. Usually, they are not only interested in large compensation packages but also want to work for an employer that is socially responsible and believes in integrity and business ethics.
Defining these principles helps the company communicate to its employees what the organization stands behind and how it intends to do business.
It is not hard to find a firm’s mission, vision and values. These can be found on a company’s website.
It is interesting to see how different companies understand the world. How they want to behave in it and what they want to achieve.
