Just about every one of Edward Jones’ employees could express the company’s succinct strategy statement: Jones aims to
“Grow to 17,000 financial advisers by 2012 [from about 10,000 today] by offering trusted and convenient face-to-face financial advice to conservative individual investors who delegate their financial decisions, through a national network of one-financial-adviser offices”.
ABC aims to do what by when by how to whom through what
Such a strategy statement * Becomes a guiding light for making (difficult) choices * Aligns behaviour within the business
Elements of a Strategy Statement
Objective = Ends and Time Frame
Scope = Domain*
Advantage = Means**
* including Customer, Geography, Vertical Integration
** including a value proposition (external component) and a unique configuration of internal activities (internal component).
Defining O.S.A. requires trade-offs, which Porter identified as fundamental to strategy. These trade-offs that companies make are what distinguishes them strategically from other firms.
Defining the Objective
Companies tend to confuse their statement of values or statements of mission with their strategic objective.
Mission statements spell out the underlying motivation for being in the business in the first place – the contribution to society that the firms aspire to make. They are not used as strategic goals to drive today’s business decisions.
Similarly, values govern how employees should behave (“doing things right”) but not what the firm should do (“the right things to do”).
A Hierarchy of Company Statements
(The top box could be the same for different firms, but the bottom box cannot)
Mission – why we exist
Values – what we believe in and how we will behave
Vision – what we want to be
Strategy – what our competitive game plan will be Objectives = Ends Scope = Domain Advantage = Means
Balanced – how we will implement and monitor that plan
The strategic objective should be * Specific * Measurable * Time bound * A ‘single’ goal – growth or profitability
Boeing changed its objective from being the largest player to being the most profitable player in the aircraft industry. It had to restructure the entire organisation, from sales to manufacturing. For instance, it dropped…