How do you create a strategy?
A classic strategy should specify goals to be achieved for a time horizon of approx. three to ten years and show how these goals can be achieved. For many companies, this will sound like an impossibility. Who can plan so far in advance these days? How realistic is it that a plan, once created, can remain stable for such a long time? The answer is quite simple: not at all!
Most people overestimate what they can achieve in a year and underestimate what they can achieve in 10 years. — Bill Gates
Planning in an uncertain environment?
As Bill Gates already indicated in his quote, significant developments can take place over long periods of time, for example five to ten years. Businesses can grow from startups to multi-billion dollar giants while formerly established giants fade into obscurity.
However, planning for such long periods of time is usually not very helpful. In the so-called VUCA world (volatility / volatility, uncertainty / uncertainty, complexity / complexity, ambiguity / ambiguity), the framework parameters change too quickly and too frequently for static planning to be of any long-term benefit. So why create strategies?
In order for the major changes discussed above to take place, there must first be an idea of what is to be achieved. Only when this idea, this conception of the future situation, offers orientation can a company achieve a promising future in the long term, despite the constant change in environmental conditions.
If you don’t know the port you want to sail to, no wind is the right one for you. – Lucius Annaeus Seneca
Agility as an answer
Since agility has been receiving more attention in companies, one might get the idea that strategies have had their day and that an agile approach would be sufficient. After all, always driving on sight and constantly adapting to changing conditions would be ideal for keeping a company on the ideal path in a fast-moving world.
But what is this path? Even if agility is a basic requirement for being successful in the market in most industries today, there must first be a clear idea of where the company should be headed.
Mission, vision and values
Every company needs a kind of fixed star that ensures orientation for all employees over a longer period of time. In this way, a company can definitely react to the immediate situation in the environment using an iterative approach and actively shape its future. The fixed star creates the basis for a common understanding in the workforce of what the general goal is and how the cooperation of those involved should look like.
This fixed star defines the mission, vision and values of a company. If these are well chosen and clearly described, they serve – even in an uncertain environment – as short and long-term orientation for the company or a team.
In this way, the daily pending decisions that have to be made in the company can be tested against its mission, vision and values. In many cases, the result of the decision can then be derived without having to discuss it in detail in each individual case. This is much more efficient and ensures that the company as a whole steers in the right direction.
Mission – What do we want to achieve?
The mission describes the services offered and the purpose of the company. It is formulated in it
- what the company wants to achieve
- who it wants to support and
- why it does this.
A mission is formulated in an action-oriented manner, i.e. it describes what an organization undertakes to achieve the stated purpose. This distinguishes it from the vision, which defines a desired goal state.
Example of a mission
An example of a successful mission is that of Tesla:
Tesla’s mission is to accelerate the world’s transition to sustainable energy. – Tesla, Juni 2021
A not so well known example of a good mission comes from the Dubai Roads and Transport Authority (RTA):
Develop & manage integrated and sustainable roads & transportation systems at a world-class level, and provide pioneered services to all stakeholders for their happiness – Dubai RTA (2016)
See the next section for the associated vision. Together they give a good picture of the respective meaning of mission and vision and how they interact.
When creating your mission, you can use the following guiding questions:
- what do we do
- What is the benefit of our actions?
- Who are we doing this for?
When answering these questions, be sure to hit on the key points that make your company special.
Vision – who do we want to be?
The vision defines a picture of the company in the future and explains where the company wants to be in a few years. The time horizon for the vision is usually 5 to 10 years. This is a period that is still reasonably “tangible”, but at the same time there is not too much uncertainty about the framework parameters that will then prevail. Of course there can always be surprises. Or would you have thought it possible in 2005 that 10 years later most of your friends would be using smartphones and billions of people would be communicating with each other on social networks?
In order to be inspiring and motivating, the vision should be formulated ambitiously, but on the other hand it should also offer a realistic chance that the goal can be achieved. Ideally, the vision offers employees such an interesting or even fascinating outlook on the future of the company and thus their own future that their motivation is significantly increased.
So think carefully about how you formulate your vision and be sure to take a critical look at it from the point of view of your employees.
Example of a vision
The Dubai RTA vision is a good example of a short but also clear and motivating vision:
Safe and Smooth Transport for all – Dubai RTA (2016)
In combination with the mission presented above, it becomes clear that the goal to be achieved is defined here. The mission appropriately defines what is being done to achieve that vision.
Questions to review the vision include:
- Is the vision inspirational, not quantitative?
- Is the vision focused and clearly formulated?
- Is the vision ambitious, but can it be realized with special efforts?
- Is the value created by the company clear for its environment, possibly even for society?
- Is it clear who the company is creating value for?
Values – Which values are important to us?
A company’s values are one of the cornerstones of its culture. By explicitly emphasizing and prioritizing certain values, the company management determines
- how to deal with each other and how decisions are made within the company and
- how its employees (and thus the company) should behave towards the outside world.
It is very important that the values are not only written down and communicated, but above all that they are (exemplified) lived. As a role model, managers in particular are of particular importance. Any action or decision should be critically questioned as to whether it goes hand in hand with the defined values. If this is not the case, the employees notice this quickly and no longer take the values seriously.
Culture eats strategy for breakfast. – Peter Drucker
However, if the values are visibly lived, they are the driving force to carry out the mission effectively. Provide employees with orientation for their daily activities.
example for values
The Dubai RTA has defined the following values:
Pioneering & Competitiveness
leadership and teamwork
Happiness and Positive Energy
innovation and creativity
-Dubai RTA (2016)
These values form the basis for daily action to implement the mission. In this case, they are more “classic” and could also apply in this form to other companies.
An example of a more modern definition of corporate values can be found at Airbnb:
Champion the Mission – We’re united with our community to create a world where anyone can belong anywhere.
Be a Host – We’re caring, open, and encouraging to everyone we work with.
Embrace the Adventure – We’re driven by curiosity, optimism, and the belief that every person can grow.
Be a Cereal Entrepreneur – We’re determined and creative in transforming our bold ambitions into reality.
– Airbnb 2021
If it fits the culture of the company, then – as can be seen from the example of Airbnb – a value can be formulated with a wink.
Defining the values in the company is often not easy, especially if you don’t just want to fall back on the classic values (teamwork, innovation, motivation, …). A good approach is to look beyond the company and, for example, also include the private context.
For example, most people have certain positive experiences from the past in their heads from which they can derive values. In line with the above example, some employees may have had particularly nice experiences on vacation due to the outstanding hospitality of the hosts. If you then analyze which values contributed to making this experience so special, this could lead to the above example: “Be a Host – We’re caring, open, and encourage to everyone we work with.”
Conclusion: mission, vision and values as the basis of the strategy
As soon as the cornerstones of the future orientation of the company have been defined via mission, vision and values, further specification must be made so that the strategy can also be operationalized. We will address the relevant topics in another blog post .
If you want to start working out the cornerstones of your strategy straight away, simply use the ConWISE platform. Here you will be guided step by step through the creation of the strategy and receive assistance as if you had a consultant at your side. Contact us!
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