Support Strategy with Commitments
Strategy is more than just good ideas. You actually have to do something in order to bring about some results. At some point you must translate your nice words on paper into tangible things that you can do.
You started with the vision. After all, strategy is about vision. But success doesnt happen just because you think of a vision. Articulating the vision is a step. In order to make the vision work, you have to narrow it into workable chunks for actual human beings to grasp and accomplish. There are some steps requiring planning between strategy and action (Figure 15-1).
The Mission Statement As Foundation
Hey, this is what this company is about. Its interesting. Most people who want to do strategy think you should start with a mission statement, because they think that you can somehow decide the biggest of your big pictures without understanding any of the details. Hog-wash! Start with some details so you know what youre talking about.
We recommend you wait until this point to write a mission statement, for many reasons. One key reason is because many of the elements of a good mission statement come right from your strategy. The two overlap considerably, and you can find specific things in your strategy to put into your mission statement.
One big difference between your strategy and your mission statement is that the mission statement is so public. People see a mission statement, so there will be some areas where youll be deliberately more vague. For instance, in a strategy you might say you plan to hit ABC Company between the eyes and take all their business away. You may not be that blunt in your mission statement. Instead, you may say you want to seek growth in a market that happens to contain ABC Company.
Tales from the Strategy Vault
In the 1960s, many people were aware that part of the Disney mission was to grow its theme park business. What was not in the mission statement but was in the strategy was the intention to open a theme park in central Florida. If that information had been public, real estate prices in that area would have shot up, making such a huge undertaking nearly impossible. Instead, Disney set up hundreds of small companies that went about quietly purchasing land in central Florida.
The other important thing to consider about the public nature of a mission statement is its symbolic value. It really is a declaration. You define who you are and why your customers, employees and community support your existence. Part of that declaration - maybe the most important part - is when you declare what you will not do. Although mission statements are seldom explicit about what a company doesnt do, you should nevertheless draw clear lines.
So, what goes into a good mission statement? At this stage, you need ideas, not perfect grammar or punctuation. You dont even need sentences. You need clear thoughts. If you declare three basic things, you have a useful mission statement:
Corporate Commitment. What are your corporate commitments? Are you committed to the community or not? Are you committed to employees? To the environment? Are you committed to a particular technology or to brick and mortar? Some companies are and some are not. Its a simple thing to declare. What are your real commitments?
Focus. What will you do? What will you not do? Declare it. You can express it in many forms - markets, products, needs you satisfy. Pick the description that best describes your company.
Identity. This may be the slogan. You can spend time arguing
words here, because this is what captures peoples hearts.
For instance, at Ford, Quality is Job One works internally
and externally. The best statements of identity are the kinds
that help employees and customers.
This should not take long. If you take more than a half-hour writing your mission statement, you probably dont have everyone on board and in synch with your strategy. As youll see in more detail later, you should reexamine your mission statement annually. During the first year, you can figure out how to get people to share the mission. To demonstrate the importance of the mission statement to your company, and to give it teeth, the person who must drive this process is the CEO.
A good mission statement articulates the vision to a broad public, both inside and outside the firm (sample Mission Statement worksheet). But we need more than articulation of vision if we want results.
Goals As A Guide To The Future
The mission statement as a declaration is a great communications tool, but real accomplishment comes from specifics. And before you begin to think about attempting new projects, you have to consistently take care of certain things. These are your goals - the stuff you have to do consistently on an ongoing basis.
For instance, a common goal is profitability because this is something you routinely want to have. Profitability is better when its consistent and ongoing than if its a one-time thing. If your company is like most, you want profits this year, next year, and every year after that.
A goal is something that you want to achieve every year. You dont say, We got some profits last year so we dont need any this year. That doesnt make sense. Profits are a constant goal.
A company would not set a goal of starting a new benefits plan because once thats done the goal has been met. However, it could set a goal of satisfying employees - and a new benefits plan could certainly support such a goal.
The idea of a list of goals is to identify the five to ten things you have to do constantly this year and every year to keep the business running. You can state your goals qualitatively, but we recommend being as quantitative as possible. However you state your goals, they must be the things that are necessary for success.
Keep the list as short as possible. We recommend the following generic list of goals to consider as a starting point:
Your list can be shorter or longer, and these are only areas that we recommend considering. Every company is different, and some will find other things they need year to year to be successful.
The more you can quantify things and write down exactly what you expect, the more your goals take real shape. You dont want them to be amorphous. You want tangible goals, so you set targets. The targets should be consistent with your strategies. Goals take the notion of vision, which you articulated in your strategy, and then orient it toward results. The key, again, is to somehow give meaning to goals. Often, this means quantifying.
With quantifiable goals, the idea is to look about five years down the road and figure out what target makes sense for your strategy. For some companies, this means looking forward to being one number five years down the road. For others, this means looking at one number or percentage that it will meet constantly in each of the five years.
Such a set of goals will establish a balanced set of criteria for managers to strive to measure themselves against as they take care of the large portion of the business that can be considered routine (sample Goals worksheet). But while goals guide the ongoing incremental progress of a business, getting to the next level usually needs something more - it takes a project with a specific objective.
Objectives - Measurable and Specific Projects
In the end, it comes down to doing something specific. Its really simple: when you get projects finished the company moves forward.
You can follow this from strategy to mission statement and on to goals. It really all fits together. But now is the time to figure out what it means in terms of implementation. What are you going to do? There are certain high-priority projects that you need to undertake in order to drive the company forward in the next 12 to 18 months.
The list should be short: we strongly recommend fewer than 10.
And so here you are - at the key point of the process.
This is where it happens. Suddenly, you really can turn the ideas in your strategies into action. You do it through objectives and action plans.
Weve found that if you tell a group of managers that they can set up a limited number of objectives, they will size up the objectives, their time, and other resources required to get the most from what they have. The challenge is to limit themselves to 10 objectives, because most managers think they can do everything.
Based on our experience with thousands of strategic objectives, its better to identify 10 projects and complete them all than to identify 30 projects and merely get them all started. Once you get past 10 projects per year, you end up with diminishing returns.
The conversation about the future has already been framed at this point. So heres the question: What are the big things you can do in the next year or so to start you on the path to where you want to be in five years?
Name Your Results
Objectives should be stated as results.
Objectives are not activities. Rather, objectives are statements of what you want to accomplish. Because you want to accomplish something, your objective must be specific. For instance, an objective stated as Clean up plant is merely an action. As a measurable objective, it means absolutely nothing. Its too general. How will you be able to tell when its done? Are you going to paint? Do you want to gut the building and start over? Its entirely possible for a team of managers to interpret a general objective as meaning many different things. Objectives must be stated as specific expected results so that you minimize weasel room. The objective should ideally contain measurements, which must be quantitative, and be timely. In other words, you have to declare what you will do and when you are going to do it - specifically (sample Objectives worksheet).
Tales from the Strategy Vault
In the early years of Ben & Jerrys Ice Cream, a plant manager purchased an ice cream packing machine for about $20,000. This was an expensive piece of equipment, back when a good car cost $10,000. At the time, one of the owners, Ben Cohen, was skeptical about the purchase. How could a machine be worth that much money? Well, the plant manager explained that the machine could pack 2,000 pints of ice cream an hour without hiring any new employees. They gave it a try, but Ben stipulated that the machine would be sold if it didnt reach that output. So they put up a big piece of ply-wood on the wall, painted a goal line and then charted the results. Funny thing: once the line reached 2,000 pints an hour it just kept going up. Pretty soon, they were doing 4,000 pints an hour. The employees clearly saw that the output was being measured, so they pushed it because it was deemed important. Measurement creates results.
When you measure something, you put a psychological degree of importance on it for all of your workers. For example, we once had a client who was very focused on growth; everyone in the company knew what his growth target was - 25%. He was growing at 25% a year, but when he came to us, he couldnt figure out why all this growth wasnt translating into profits. And the answer, of course, is that no one in the company knew that profits were important, but they sure understood how their roles in the company related to growth. His only focus was growth and he was successful at that because he was aiming for it.
Go for an Easy Win First
Nothing helps like confidence and nothing builds confidence better than a legitimate reason to puff out your chest. It helps to win.
If you know when you set out to do a project that you will succeed, it makes it easier to do the project. So we recommend in the early stages of the strategy process that you find some doable, specific projects. You dont want anything too easy, because you want to be able to feel a sense of accomplishment, but you dont want a bunch of huge projects that will overwhelm you. Balance is important.
Some companies are successful with only two projects a year. Some can do only one and some can do three. It depends on the scope. But its important to recognize that if you try to take on five gargantuan projects in one year youll be unable to succeed at them. This will lead to a feeling of failure that can be associated with your planning process in the minds of the participants.
The first year, in particular, we recommend you create some
bite-sized chunks to take on. This will give the team a chance
to feel good about your companys progress. Projects are
even better if theyre public - something
like purchasing and installing a new phone system thats customer friendly. If your phone system is annoying customers and preventing you from delivering good service, then correcting this problem will have immediate benefit to the business and serve as a highly visible sign that planning can lead to results. Your employees will start to look at all projects and think, We can do this!
Identifying and assigning objectives completes the three-day strategy formulation meeting. Its now time to take a break from the meetings and do some off-line preparation for implementation: develop action plans, budgets, and time planning. Each of these is covered in the next two chapters. You should review these with your team and assign the tasks as required in preparation for the final implementation-planning meeting.
|This article is an excerpt from the authors' book Simplified Strategic Planning - A No-Nonsense Guide for Busy People Who Want Results Fast!. The book is a blueprint for planning your company's future while teaching strategic planning in clear, simple language without confusing jargon. It was recently published by Chandler House Press and is available at bookstores nation-wide. For more information, click here. To order the book online, go to Amazon.com.|