Giving Life Direction – Vision & Strategic Objectives

Now we understand the business context and the elements that make up the business – Business Entities’, we should look at where the company is going. 

The vision statement defines the direction of a business. A vision is a defined corporate term however no matter how big or small a company is they all exist for a reason and that reason is articulated by the vision statement. Let’s have a look at some vision statements using the example businesses we talked about in chapter 2. 

Joe’s Car Ties vision statement is “to have the largest tier range in the country”

This vision can be broken down into

Largest Tier Range – Largest suggests that relative to the competition Joe’s will stock more types of tiers and in the country, defines that we are talking about the New Zealand market where Joe’s operates and we are not talking comparing the range to companies overseas.

“To have the largest tier range in the country” is not an all-inspiring statement and is more like a customer promise, however this is quite common among small businesses that don’t have strategic plans. This vision statement also helps Joe’s stick out from the competition for those consumers who may have a unique tier requirement. It may also suggest that Joe’s range includes more cheaper tiers as well as the more expensive tiers could attract price conscious consumers looking for a good deal.

The other important directive we can take from Joe’s vision is that the company needs to maintain, monitor and possibly increase their tier range relative to the competition.

Before we move on to Strategic Objectives let’s take a look at another example.

Just Law – “to be the cheapest and best property law firm in raglan”

Now with this vision we need to look a little more carefully. 

Just Law is currently a one-man business which as we can see offers property law services.

“To be the cheapest” is quite obvious and means that the price a client pays for services will be less than the competition charges for the same service. “Best” however is subjective and unless Just Law plans to measure themselves in surveys or a poll versus the competition is basically only a marketing word and nothing more.

“property law firm” is a definition and describes the business context. We should also think to ourselves if Just Law was to offer other law services that weren’t property focused would the cheapest statement remain true.

Finally, “raglan” is a small surf town in New Zealand and defines a location. Adding this to the vision gives Just Law a local focus.

The reason I list both examples is that vision statements can be a mix of marketing fluff and buzz words however if well defined they should give the business direction and purpose for existing.

A vision statement may be carved in stones and tattooed to each employee face however the strategic objectives of a business can and should change.

Strategic objectives in lots of companies are measured statements of intention that can link to the vision statement and can be driven by a strategy. Depending on the size and maturely of a business Strategic Objectives may be explicitly defined each year or simply a call to action 

that is implied by the leader of a company.

To help understand Strategic Objectives I am going to assume from this point forward that these are statements defined each year for the year ahead. That they are measurable and implemented via a change programme.

Still confused? Let’s take a look at Just Law – who aim “to be the cheapest and best property law firm in raglan”

Just Law has one employee/lawyer called John. John has worked out his goals in the next 5 years and wants to continue to grow and sell the business in 5 years.

In order to take a step in the right direction john has defined the following strategic objectives for FY14/15:

  1. To increase revenue by 20% through increased client numbers by the end of the year
  1. To reduce the time taken to complete case work for sales and purchases by 25% by the end of the year
  1. To hire a new lawyer by the 3rd quarter who can manage at least 20 cases per month (john’s average case rate)

The above strategic objectives are very clear, measurable and to be honest so much better than I have seen at even some of the biggest corporations I have worked for.

Usually as we saw in Chapter 1 you get some vague statement that you have to work through.

There is a great analysis technique called S.M.A.R.T that defines what you should be looking for when capturing strategic objectives. Seeing as though there are so many great books on the topic I am going to skip based on this and move on to examining the statements.

John’s has defined his Strategic Objectives and they are in service of his goals. If John’s intends to maintain his direction of being the cheapest and best property law firm in raglan then he needs to be realistic and ask himself if I want to increase revenue and do so without increasing my fees to a level more than the competition is possible. In this case John has been explicit and stated how he plans to reach this revenue target through increased client numbers aka increasing caseload.

Looking at Strategic Objective 3 John is going to hire a new lawyer which will increase his costs however he qualifies this statement by stating 

that the new lawyer will process the same number of cases he does each

month and therefore we can assume that their caseload will at least cover their wages and/or increase profit.

Finally now looking at Strategic Objective 2 we can see that John thinks there is some efficiency gain in the sale and purchase case management process. In reducing the take taken to process a case then John will free up more time to increase client numbers (helping meet Strategic Objective 1) and/or provide John with spare time to focus on other areas of the business.

If defined correctly Strategic Objectives are amazing things that give the whole business direction. 

Every project on the change programme must link to one or more of the strategic objectives or should not exist. Every operation piece of work should either be to maintain the health of the business or land the foundations for future strategic thinking.

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