Success in business requires that we know clearly what our goals are and how we are going to go about pursuing them. This demands not just raw resolve but equally importantly clarity of thought and deliberation in everything that we may want or need to do. The development and execution of a business strategy or composite strategies is, thus, imperative to success and the development of business strategy for the entrepreneur, drawing from the successful ways of large enterprises and contextualising it to our realities, shall be our subject in this series.
Often confused terms in business include ‘strategy’, ‘plan’, ‘tactics’, ‘vision’, ‘mission’, ‘core values’, etc. Perhaps that is partly because some of them are ‘borrowed’ terms from other fields and partly also because they are interlinked. Furthermore, many entrepreneurs consider them simply academic and of not much practical importance to them. But this is wrong. For the purposes of avoiding any mix ups, therefore, we will offer some definitions of each of the terms as they will be used and applied in this series. A word of caution though is that the use of the terms, ‘strategy’, ‘plan’ and ‘tactics’ in business should not be confused and definitely not equated with the way the terms are used in the military.
What are core
values? According to Business Dictionary, core values are “…principle(s) that guides an organization’s internal conduct as well as its relationship with the external world. Core values are usually summarized in the mission statement or in a statement of core values.” The core values of an organization are those standards on which the members of the organisations hold themselves accountable to in their conducts as they strive to carry out their duties and discharge their responsibilities. Thus, core values are the fundamental philosophies of work and interrelationships that build and shape corporate culture. For example, the values of Microsoft Corporation are a composite of innovation, diversity and inclusion, and a fe
w others as shown in the schematic below.
What is the mission? A mission statement typically states why an organisation exists. It is the reason for its being and defines who its customers are or might be; identifies what its products are or may be; the geographical areas of its operation; the demographic or demographics of interest, etc. Typically, mission statements are few short and succinct statements that capture lofty aspirations and goals. They reflect every facet of your business in an elegant statement. If you ask me, missions tend to be the kind of activities that have true and deep meaning to people, and which they could gladly and passionately carry out without getting paid! Again, as an example, the mission of Microsoft is “…is to empower every person and every organisation on the planet to achieve more.”
What is vision? The vision statement of an organisation describes what an organisation desires to achieve in the long-run. According to Katie Trauth Taylor, “A company vision statement reveals at the highest levels, what an organisation most hopes to be and achieve in the long term…. It serves a somewhat lofty purpose – to harness all the company’s foresight into one impactful statement.” On one hand, the mission statement of an organisation is present-based and conveys an actionable justification of business existence to internal and external stakeholders. On the other hand, vision statement is a futuristic aspiration and meant to inspire and give direction to internal, rather than external, stakeholders.
The vision of Toyota Motor Corporation is to “…lead the way to the future of mobility, enriching lives around the world with the safest and most responsible ways of moving people.” The vision of Microsoft is ‘to create local opportunity, growth and impact in every community and country in the world’.
What is tactic? Tactics refer to the specific and immediate use of resources to achieve objectives (sub-goals) that support a defined and larger mission. In comparison to strategy, to be defined below, tactic is short-term, flexible and specific.
What is a plan? A plan is typically a list of actionable steps to be taken towards achieving a set of defined objectives in the short run and/or a larger goal in the long run. Plans are what give strategy the necessary details that make it actionable, hence the generous use of the term ‘strategic plan’. A plan should answer questions like how, when, where, who, and what.
What is a strategy? Strategy Dynamics defines Strategy simply as ‘…how an organization tries to achieve its objectives’. ‘How an organisation strives to achieve its objectives’ is a function of what position the organisation adopts in relation to others as well as the policies and actions the organisation adopts and takes over time in an effort to achieve the objective.
Strategy conceptualization, development and execution, thus, involves setting desired objectives; Organisational positioning (relative to others in its operating environment) and steering the organisation to achieve its set objectives by influencing performance through policies and actions. Strategy represents the ‘blueprint’ for achieving your desired objective. It identifies broader goals that advance the overall organization and allocation of resources. It is long term and changes infrequently. For instance, your strategic objective might be to be the market leader in terms of sales in the mid-market of your industry in three years’ time. The ‘tactics’ you may adopt over the next three months could be by offering lower cost solutions vis-à-vis your competitors. Subsequent specific actions after the first three months will be determined depending on emergent situations and circumstances.
All we have done today is to try to distinguish between the few terms that are often mixed up in business discussions. As an entrepreneur, it is important that you understand these terms and use them appropriately. We will delve further into business strategy next week by taking up the elements of strategy, strategy frameworks, and how to develop strategy for your business.