The development of strategic planning begins with an agreement on a definition or purpose for the business or organization. It basically answers the question, What business are we in? This question will dictate the type of products or services the business will offer as defined by the needs and wants of the specific market.
This agreement on a definition or purpose for the business or organization is commonly termed as the Mission Statement. This Mission Statement can be thought of as a kind of constitution or charter that is established by any business or organization when it comes into existence. But unlike constitutions or charters, the Mission Statement does not directly answer the question, What business are we in?
Instead of answering by categorically asserting, We sell air-conditioners (this is for purposes of illustration only), the Mission Statement states it in this manner We provide you with a comfortable climate. The Mission Statement first of all states the benefit of the product that is mentioned.
But stating the benefits of the products is not all there is to the Mission Statement. Mission Statements normally include some other very important ingredients, like:
a) The chosen area of activity for the organization; that includes the kinds of products, services or ideas to offered, the customers or clients to be served, and the geographical areas that it intends to cover.
b) The plan for use of the physical resources, financial resources, and human resources to help aid in customer or client satisfaction.
c) The plan for the competition in its arena of choice.
Start-ups Mission Statement
New business or organizations commonly termed as start-ups can be greatly benefited by a well defined and thought out Mission Statement. Start-ups are usually prone to two extreme organizational behaviors; they can be so aggressive and lose energy quickly and run out of resources or they can also be so passive by displaying a wait and see attitude in the market and so nothing actually happens.
To combat the common pitfalls of new business or start-ups, the Mission Statement of the business or organization should specifically focus on the law of the marketplace and that is to get customers and to keep them. This specific focus will be the guiding principle telling the business or organization what it intends to do and how it plans to do it.
For start-ups focus should come first, in order to achieve the intended result as defined by the Mission Statement. First on the focus list is the type of product or service. If one is engaged in the retail business then focus on this business line by getting the best product that will get and keep the customers. The same holds true if one is in the manufacturing, processing or service sectors. Second on the focus list is the market to be served. By looking at the demographics in the business location, focus could be given to the specific market. Identification of the specific market in the business location, as well as analyzing market gaps would enhance this portion of the focus list.
One cannot insist to serve a middle class market if the local demographics say otherwise. Third on the focus list is how to compete in the chosen arena. One can slug it out by waging a price war or one can wage a value added war by giving customers value added services and shopping comfort.
Existing Business Mission Statement
Existing business can gain an advantage by following a well-crafted and well-designed Mission Statement. While the basic ingredients might be there; statement of the benefits of the product, the field of activity, the resources to be used and the choice of the arena of competition, additional things have to be worked out.
Existing business experience results on a daily basis. To make these results contribute positively to the Mission Statement, the business or organizations need to establish specific objectives. These objectives become the statement of results the business or organization plan to achieve in a specific measurable time period.
Objectives need to be well stated in order that it will produce good results. If objectives are not well stated, surely it will produce poor results for the business or organization. Good objectives are specific and measurable “increase market share from 5 percent to 8 percent this year by increasing promotional expenses by 10 percent. Good objectives also involve not just a segment of the business or organization but the whole organization “increase sales, decrease certain spending, launch a new product, increase after-tax profits.
Bad objectives have certain common characteristics they are too general and they are not measurable “increase promotions, be the industry leader in new product development, obtain wider product distribution, and maximize profits. Existing business need a well-defined Mission Statement as its business guide.
Role of the Mission Statement in the Future of the Organization
The future is something scary and uncertain for all business or organizations. With the world in general in an unpredictable mood; we suddenly have hurricanes, floods, drought, hail storms, wars and earthquakes; currencies suddenly rise and fall; market opportunities suddenly disappear and unseen market opportunities appear; business and organizations have to steer themselves into a position of survival.
The Mission Statement contains a portion that talks about what do we want to be in the future. This in itself is proof that the business or organizations, assuming that its leaders, visionaries and planners, are forward looking, have a rather large percentage of survival well into the future. The pressure to have a fast buck and fast addition to the bottom line figures should not be the primary motivation of business or organizations.
A sure and steady movement toward the future should occupy the psyche of business and organization; looking forward not only what do we want to be 20 years into the future but 50 years or even more into the future.
This long haul mentality should permeate the business or organization. Only this kind of mindset will assure a high survival rate in these turbulent times. The law of the marketplace should still be the focus well into the future;
How will we get our market?
How will we get our customers?
Will we still have the same kind of market?
Will we still serve the same kind of customers?
How are we going to keep them?
These will the same things that business or organization will undertake into the future but maybe in a different and more sophisticated environ.
The future is well suited to those who prepare for it. In our day and age where technology has become cheap and access to it is commonplace, business or organizations have to stay ahead of the competition as it follows the future aspect of its Mission Statement. The search of advantage should form part of the long haul or long view thrust. Business or organizations must search, discover, and create anything for that advantage in the future. And it might just be a surprise that the answer is right inside your business or organization.
The human factor is and will be the advantage one gets into the future. The business or organization who is able to harness the potential of its people and use them in its futurism will be the ones will survive when the smoke and chaos of competition finally clears out.