3 Underlying Components to Building a Successful Strategic Plan

Today’s business environment is nothing like I’ve seen at any other time in my life.

Based on the various commentary out there, I suspect you can say the same. This turmoil is precisely why a proactive strategic plan is so crucial.

This is also why I’m taken aback to know that many companies either have no strategic plan whatsoever or pull a semblance of a plan together hastily. Organizations in this situation will experience much pain and may not even exist in a few short years.

However, a company cannot just slap together a strategic plan in an afternoon. Similar to how there are foundational components to building a successful ERM program, there are certain items that must be in place for a company to develop a successful strategic plan.

For the strategic planning process to produce the outcome your company is after (what I call the “desired outcome”), there must be robust mission, vision, and values statements in place to guide strategic decisions and ensure everyone throughout the organization is focusing their efforts in the right way. Without them, executives, managers, and even support staff can easily fall prey to shiny-object syndrome, which is never a desirable outcome, especially in today’s VUCA world.

The mere existence of mission and vision statements, along with a list of values, isn’t enough.

To be valuable in guiding decisions, these elements must become ingrained into the company’s culture, which first and foremost, requires the right tone at the top.

Continue reading to learn more about mission, vision, and value statements consist of, along with a brief overview of how to develop them.

  1. Mission Statement

What does your organization do? Who does it serve?

Executives, managers, and even employees are asked questions like these all of the time, and while they may seem straightforward, this is rarely the case in practice. The mission statement helps provide this answer. Incredibly, according to one survey, 61% of company employees do not even know what their company’s mission statement even is. At one organization I know, the CEO insisted that there was a mission statement, and when I asked employees, they all gave me their own version of a mission statement…and none of them were consistent.

Think of it like what we consultants would call a fishing line or what you could characterize as a mini-elevator pitch.

What a mission statement is not is a tagline or a slogan like “What can brown do for you?” (UPS) or some other catchy phrase you would associate with a brand.

As this article from Atlassian explains, the mission statement:

…captures the heart of the your organization and explains why you do what you do and why you exist in the first place.”

A couple of sample mission statements include:

  • “Connect the world’s professionals to make them more productive and successful.” (LinkedIn)
  • “Our mission is to Keep Commerce Human.” (Etsy)

Preparing a mission statement can take a bit of trial and error, but according to the Atlassian article linked above, you and executive leaders are in essence asking:

  • Why do we exist?
  • Who are our target customers?
  • What makes us different than competitors?

There’s also no rule on how long a mission statement should be. Some are just a few words while others are as long as a few paragraphs. (Personally, I would limit it to 3 sentences; otherwise, it becomes unwieldy.)

Keep in mind, though, that it should be just long enough to adequately explain the company in language any one can understand but not so long that it is difficult to communicate.

  1. Vision statement

Some use the terms mission and vision statement interchangeably, but they are different.

If the mission statement is about where the company currently is, the vision statement is about where it wants to be at some indeterminate point in the future.

While there is no set timeframe for a company’s vision statement, many identify a timeframe like 5 years, 10 years, 20 years as part of the conversation to make it an easier concept to grasp.

To further elaborate, author B. Keith Simerson explains in the book Strategic Planning: A Practical Guide to Strategy Formulation and Execution:

You vision statement provides focus, direction, and guidance and helps guide decisions and actions by describing the overarching aim of your organization as it progresses into the future.”

Its goal is to provide a clearly understandable message for the challenges it aims to address and/or products and services it aims to provide. The vision statement can also explain what the company’s relationship to employees, Board members, investors, and other stakeholders will look like too.

Think of your vision statement as those distant stars and galaxies you see in the night sky.

If your vision statement is the stars, then your strategic plan is the telescope that brings these stars into focus. A couple of example vision statements include:

  • “To become the world’s most trusted company.” (Ford)
  • “A world where everyone has a decent place to live.” (Habitat for Humanity)

One observation from the Atlassian article I found interesting – a vision statement for a nonprofit like Habitat for Humanity tends to showcase an ideal world while one at a for profit like Ford will illustrate their ideal place in the world.

Developing your company’s vision statement can be a somewhat arduous task since you’re gazing into a very uncertain future, but it basically boils down to understanding three things.

  1. The outcome you intend to produce in the future.
  2. Why this outcome is important to your customers.
  3. What success looks like for you.

From here, you can begin putting a statement together with the understanding it will take a few iterations before you arrive at a final version.

  1. Values statement

Your company’s core values is the last leg of the stool that supports the company’s strategic plan. These values should underly what your goals are. After all, core values are the “deeply ingrained principles that guide all of a company’s actions.”

The values statement ensures that the company has the right mindset and culture to fulfill its mission and reach the finish line described in the vision statement.

Values should consist of more than just cliché statements like “we’re like family” or “we are the best.”

A client in the insurance industry identified words like service, family, integrity, and caring as its core values and included additional descriptive characteristics that expand on each of these.

Like mission and vision, there isn’t really a formal way to develop a values statement except that it requires brainstorming and a bit of revision before it’s ready to be spread amongst the company.

With these statements in hand, executives and managers will know what the company is there to do over the long-term when developing the company’s strategic plan – a set of interim goals, typically 3-5 years out, that the company sets to achieve its vision. In the shorter term, annual planning consists of projects in the next year.

Similar to your company’s ERM processes, you should never copy/paste a mission, vision, and values statement from another organization. While it is fine to look at what others are doing, your company or organization is unique in its own right and, therefore, should have its own statements. After all, the culture and people of your organization are not the same as the people in another company; so why should the mission, vision, and values be the same?

Without carefully crafted mission, vision, and values statements, your company will be like a rudderless ship floating around the ocean. Don’t put your strategic plan – and organization – at risk due to something that was totally within your company’s control.

Does your company have a formal mission, vision, and values statement? Are these statements the foundation of everything the company does?

I’m interested in hearing your thoughts on this important subject and any insights you can share with the audience to understand the importance of good and accurate mission, vision, and values statements for their organization.

And if you’re struggling to develop a clear picture of where your company is today and where you want it to go in the future, please feel free to reach out to me to schedule a quick meeting to discuss what may be causing you to stumble and how to get back on track.

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Meet Carol Williams, SDS Founder & Lead Strategist

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This blog was launched to provide strategy and risk practitioners with a go-to resource to better guide their efforts within their companies. Thank you for bringing me and my team along to be part of your journey towards better risk management, strategic planning and execution, and overall decision-making. Happy reading!

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