Translate a business mission into strategic goals

Saying your mission is to “asses and act through public/private partnerships to improve energy systems” is one thing; operational zing that mission for your managers is another. The firm’s managers need long term strategic goals. For example, what exactly does that mission mean, for the next five years, in term of how many and what specific types of partnerships to form, with whom, and when?

Business managers need specificity. WebMD’s sales director needs goals regarding the number of new medical related content providers vitamin firms, hospitals, HMOs it must sign up per year, as well as sales revenue targets. The business development manager needs goal regarding the number of new businesses – such as using WebMd to help manage doctors’ offices online- he or she is to develop and sign. Similarly, a global financial power house like Citicorp can’t function solely with the broad mission “to provide integrated, comprehensive financial services worldwide.” It needs specific goals, in areas including building shareholder value through growth in earnings- per-share; continuing its commitment to building customer oriented business worldwide; maintaining superior rates of return; building a strong balance worldwide; maintaining superior rates of return; building a strong balance sheet; and balancing the business by customer, product, and geography.

The firm’s strategy is a bridge connecting where the company is today with where it wants to be tomorrow. The question is, “how do we get from here to there?” A strategy is a course of action. It shows the enterprise will move from the business it is in now to the business it wants to be in (as stated in its vision, mission, and strategic goals), given its opportunities and threats and its internal strengths and weakness.

Employees can’t and won’t implement strategies they don’t buy into; therefore top companies craft strategies whose basic principles are easy to communicate. For example, the essence of Dell’s strategy has always been “be direct.” Wal-Mart’s strategy boils down to the familiar “low prices, every day.”

A knowledge of and commitment to the strategy helps ensure that employees make decisions consistent with the company’s needs. For example, the executive team’s deep understanding of Nokia’s strategy reportedly helps explain how the firm can make thousands of decisions each week so coherently.

Strategy implementation means translating the strategies into action and results – by actually hiring (or firing) people, building (or closing) plants, and adding (or eliminating) products and product lines. In other words, strategy implementation involves drawing on and applying all the management functions: planning, organizing, staffing, leading, and controlling.

Strategies don’t always succeed. For example, when General Motors sold the last of its Hughes Electronics assets, it was the end of a strategy put in place about 12 years earlier. In the 1980s, GM had bought both Electronic Data Systems and Hughes Electronics, with the idea of using these technology firms to automate and reinvigorate automobile production and sales. GM did make a big profit when it sold the companies. However, many believe the acquisitions were actually such a distraction that they helped push GM’s market share down from about 60% to 28% in the interim Similarly, Procter & Gamble announced it was selling its remaining food business – Jif, Crisco, and Folger’s coffee – because management wants to concentrate on household and cosmetics products.

Managing strategy is an ongoing process. Competitors introduce new products, technological innovations make production processes obsolete and social trends demand for some products or services while boosting demand foe others. Strategic control keeps the company’s strategy up to date. It is the process of assessing progress toward strategic goals and taking corrective action as needed. Management monitors the extent to which the fi0rm is meeting its strategic goals, and asks why deviations exist. Management simultaneously scans the firm’s strategic situation (competitors, technical advances, customer demographics, and so on) to see if it should make any adjustments. Strategic control addresses several important questions: for example, “Are all the resources of our firm contributing as planned to achieving our strategic goals?” What are the reasons for any discrepancies?” and, “Do changes in our situation suggest that we would revise our strategic plan?”