Strategy Formulation
The long-term plan to build a great company for the future starts with the Vision.Vision
Vision is inspirational and aspirational: “We intend to return Earth to a natural, ‘green’ state.” The vision is a very long-term, perhaps unachievable, ultimate outcome that the executive team, and ideally every employee, feels passionate about and is committed to pursue. Vision includes the enduring core values and purposes for which we stand.
Mission
Mission is a long-term achievable set of conditions that must be accomplished if the enterprise is to realize its Vision. The Mission Statement might be, for example: "Our Mission is to be the world's largest and most innovative company dedicated to global pollution prevention and clean-up." The Mission is something to be achieved, not merely pursued, and it needs to be stated clearly so that it is unambiguous what business the company is in and why the company exists. As Professor Drucker famously said: “Securities analysts believe that companies exist to make money. Companies exist to make shoes!”
Statement of Horizon Milestones
The Statement of Horizon Milestones, which is expressed quantitatively, contains the key milestones and timeline (usually three to five years) that move the company toward achieving the Mission: “In the next five years, we will double the rate of new product launch and will have unique environmental protection and clean-up solutions for agribusiness and energy verticals. As a result, we expect top line revenue to double, net income to quadruple, and our stock price to move from $5 per share to over $50 per share.”
It is this statement that provides the bridge between the Mission, which is very long-term and qualitative, and the Strategic Plan that must be focused on how to deliver quantifiable results by dates certain.
Stanton Associates works with the CEO and executive management in determining the Vision, Mission, and the Horizon Milestones. We bring our expertise and experience in helping companies articulate these key dimensions, and that serves as the foundation for the detailed, executable strategic plan.
Strong leadership coupled with excellent operational capability will deliver superior performance – in the short term. In a world that necessarily keeps financial score on a quarterly basis we understand and will support the need to “hit the numbers.” In fact, we agree: leadership and operational effectiveness and efficiency are absolutely required. But where does it lead? In an ever-changing world of new competitors, new markets, and new technology that transforms industries, it is self-evidently dangerous to be entirely tactically driven to keep doing the same thing but “cheaper and faster.” The markets demand excellence in execution, but reward richly those companies that can chart a path to rapid and sustainable growth and accelerating earnings over the long term.
Fortunately, we find that high-performance cultures are also outstanding at executing the strategic plan. Optimal strategy is built on critical evaluation of market opportunities and customer needs to gain a competitive advantage; the strategy focuses on value creation at the operating level and aligns resources and business processes to achieve coherent strategic objectives. High-performance companies understand that the right strategy and execution capability are both required for sustainable, superior results to create shareholder value.
We work closely with companies, delivering the tools and insights, to formulate superior strategies, and we enable management teams to execute the strategic plan successfully. We provide: thoughtful strategic insights into industry trends and competition; focus on the most attractive markets; enterprise alignment consistent with the strategic objectives; rapid and effective decision-making processes to create the executable plan and to marshal the resources needed; a quick and nimble continuously monitoring strategic environment so that the company is able to make course corrections in response to the changing competitive landscape.
To maximize shareholder value, we provide advice that answers such key questions as:
- Which markets, customers, territories should be addressed – and how?
- What are the industry trends, competitor actions and likely actions, and economic and regulatory issues that are and may affect the company?
- What are the company’s core competencies and do they present strategic advantages that are sustainable?
- What are the company’s key assets (production capability, intellectual property, unique business processes, technology utilization, quality of personnel, etc.) and how can they be deployed to maximum effect?
- What financial structures and measures should be taken?
- What are the gaps in the knowledge base and workforce skills compared to what will be required to outperform competitors?
- What is economically feasible?
How the strategy can be achieved via the development of a plan, and then its execution, is addressed in the next section. (Strategic Plan Development and Execution)