Purpose and Vision
An analysis and review of the external environment, combined with your own values and expectations, will help you to develop a purpose and a vision.
Purpose defines ‘what the business does’. It is an explanation of ‘the business that you are in’, guiding the activities of the enterprise and defining the key customers.
Vision, or goals, defines ‘where the business is going’. It is a statement of desired competitive position, outlining challenging but achievable goals with defined timescales.
All businesses have a purpose. For some, it is simply to make money. Others define activities and customers. Defining a purpose is a prerequisite for effective planning.
Developing a strategy
So, your purpose defines what you do and your vision defines where you want to be. The next step involves the setting of strategic objectives that will enable you to achieve your vision.
If it helps, think of the vision as the destination and the strategic objectives as the overall direction and means of travel. There is a need to manage the direction in which you are travelling. The Japanese call it hoshin kanri - direction management. Of course, the strategy must be flexible, but without some long-term objectives you will not be able to manage your direction any more than you could a rudderless boat.
Setting SMART objectives
To be successful, objectives should be SMART:
- Realistic; and,
To achieve this, you need to ask yourself the following questions:
- What, exactly, do I want to achieve? (Be specific - simply stating that you want to be ‘better’ at something isn’t enough.)
- How will I know when I have been successful? (By being specific initially, you ensure that progress is measurable.)
- Is this possible? (Take advice if necessary. If you want to become a marathon runner but currently can’t run for a bus, you need external advice - in this instance, from your doctor - before you can be sure it is possible.)
- Is this realistic? (Take it one step at a time - you aren’t going to run your marathon this year. Also, check that your goal is compatible with other objectives; if, say, you wanted to win the lottery and yet didn’t want to spend money on gambling, you would have two incompatible objectives.)
- When do I want to achieve this by? (Set yourself a final target date - but break down the task into steps and set a date for completion of each of those, too. This will help you to review progress.)
If it helps, try the method out on something you might wish to achieve in your everyday life; perhaps you are planning a holiday in France and wish to learn a little of the language. If so, your objectives might read as follows:
- Specific - I am going to master conversational French so that I know the basics of the language by the time I go on holiday.
- Measurable - I will know when I have been successful because I will be able to converse comfortably with my partner, who is fluent in the language.
- Achievable - I already know some words and phrases; there is no reason why I should not build on this ability.
- Realistic - I accept that there is not enough time to achieve fluency; however, I believe I have set my sights accurately bearing in mind the time I have available per week to study, my current level of ability and the date of my holiday.
- Timebound - I am going on holiday in four months time; I wish to achieve my objective two weeks before that date, giving me two weeks to consolidate my learning.
You see how easy it can be to set strategic objectives! In life, we normally skip over the process: I’ve got time to learn some French, I’ll give it a go. In business, however, it can help to set down your objectives on paper. This focuses the mind and by having a timescale in which to achieve the objective(s) means that you must make a start. Writing down the objectives will give you a framework against which you can measure progress; if you do choose to write them down, do not allow rigidity to replace flexibility - it is always better to bend than to break.
For the short-term it helps to set operational objectives which provide milestones towards achieving the strategic objectives. For these to be effective there is a need for performance measures and targets. This enables the business to monitor both its performance and also its external environment and to exercise control. Exercising control effectively requires the business to be able to measure its activities, to compare its activities with pre-determined criteria and to be able to adjust its activities in order to achieve the desired results. Adjusting the activities will be a simpler process if the business has already put in place contingency plans.
Similarly, businesses need to be continually monitoring both themselves and the environment in which they are operating and, in response, modifying their objectives, plans and budgets as necessary. At regular intervals, part of the corrective action will include modifying both operational and strategic objectives.