Strategic Intent

What is Strategic Intent?

• Strategic Intent refres to a predetermined set of aspirations that an organisation desires to achieve it. It forms the core of stratetegic management by building aframework that provides a direction to achieve the organisational ambitions.
• Stretegic intent of an organisation defines what the organisation wants to achieve in the long term
• Strategic Intent refers to the purposes the Organisation strives for.
• Strategic Intent lays down the frame work within which firms would operate, adopt a predetermined direction, and attempt to achieve the Goals.
• Hamel & Prahalad says “ strategic intent is an ambitious and compelling dream that provides  the emotional and intellectual energy for journey for future”
• He considered Strategic Intent as an obsession with an Organisation.
• Strategic intent includes various elements such as vision, mission, business definition goals and objective.
• Strategic Intent envisions a desired leadership positioning and establishes the criterion the Organisation will use for charting its progress. In addition to ambitions of the Organisation; it encompasses active Management Process that includes focussing the organisation’s attention on winning. It covers motivating the people by communicating the values, targets. The intent encourages individual and team contributions and attempts sustaining enthusiasm by providing new operational definitions. The Strategic Intent guides the organisation through changing circumstances and guides use of resource allocations.

Features of Strategic intent:

There are three basic features of strategic intent and explained as follows:

Direction:  Refers to a feature of strategic intent that determines the future course of an organization. For example, an organization know its competitor’s strategies, it can make plans to get ahead of the competitors

Discovery:  refers to a feature of strategic intent that strives to unearth new avenues, ideas, and creativity to explore the future of the organization.

Destiny:  implies that strategic intent provides the direction for the future destination of the organization. If an organization knows what it  wants in future, it tan build strategies in the present. Thus, an organization should make its strategies with the end goals in the mind.

Importance of Strategic intent:

Strategic intent is an organizational framework that adopts a specific direction to achieve organizational goals The importance of strategic intent far an organization and its employers is as follow*:

• Clarity; implies that strategic intent clarifies the purpose of the organization. The purpose of an organization could be anything from gaining competitive advantage to increasing profits or lowering costs.
• Focus: Requires a commitment from organization’s employees. The organization communicate the strategic intent to all the employees so that they can focus in their respective areas to achieve goals.
• Inspiration to employees: Mean that strategic intent motivates and encourages individuals to pursue  the organisational goal. Strategic intent should be seen as a challenge and practiced as a passion by employees.

Vision:

• A vision is considered more as a dream for future that becomes real when visionary take action to materialize it. Vision Statement is permanent statement of a company. Vision is future aspirations that lead to an inspiration. It defines the very purpose of existence of a company.
• The essence of a vision is forward looking view of what an organisation wishes to become.
• Kotter(1990) defines Vision as “ a description of an enterprise. (an organisation, corporate culture, a business, a technology, an activity) in future”.
• El-namaki(1992) defines vision as a “mental perception of the kind of environment an individual, or an organisation, aspires to create within a broad time horizon and underlying conditions for the actualisation of this perception”
• Miller and Dess(1996) defines vision as “category of intentions that are broad, all inclusive, and forward thinking”

Characteristics of a Vision Statement

• Inspiring and exhilarating.
• It represents, a discontinuity, a step, a jump ahead to dream what it is to be.
• Creation of common identity and share sense of purpose.
• Competitive, original and unique and practical.
• Foster risk taking and experimentation.
• Foster long term thinking.
• A vision is a statement about what your organization wants to become.
• It should resonate with all members of the organization and help them feel proud, excited, and part of something much bigger than themselves.
• A vision should stretch the organization’s capabilities and image of itself. It gives shape and direction to the organization’s future.
• Visions range in length from a couple of words to several pages.
• Shorter vision statements is recommended because people will tend to remember their shorter organizational vision.

Vision Statement

Vision Statement Samples:

• “Year after year, Westin and its people will be regarded as the best and most sought after hotel and resort management group in North America.” (Westin Hotels)
• “To be recognized and respected as one of the premier associations of HR Professionals.” (HR Association of Greater Detroit)

Vision Statement of “TATA STEEL”

“TATA Steel enters the new millennium with the confidence of learning, knowledge based and happy organisation. We will establish ourselves as a supplier of choice by delighting our customers with our service and products. In the coming decade, we will become the most cost competitive steel plant and so serve the community and the nation”.

Vision Statement of Farm Fresh Produce

• “We help the families of Main Town live happier and healthier lives by providing the freshest, tastiest and most nutritious local produce: From local farms to your table in under 24 hours.”

Developing a Vision Statement

• The vision statement includes vivid description of the organization as it effectively carries out its operations.
• Developing a vision statement can be quick culture-specific, i.e., participants may use methods ranging from highly analytical and rational to highly creative and divergent, e.g., focused discussions, divergent experiences around daydreams, sharing stories, etc. Therefore, visit with the participants how they might like to arrive at description of their organizational vision.
• Developing the vision can be the most enjoyable part of planning, but the part where time easily gets away from you
• Note that originally, the vision was a compelling description of the state and function of the organization once it had implemented the strategic plan, i.e., a very attractive image toward which the organization was attracted and guided by the strategic plan. Recently, the vision has become more of a motivational tool, too often including highly idealistic phrasing and activities which the organization cannot realistically aspire.

Strategic Vision

• Strategic Vision is a road map showing the route  a company  intends to take in developing and strengthening  the business.  It defines Company’s destination and provides rational for going there. It culminates in to a Mission Statement.  Strategic Vision points an Organisation in a particular direction, charts a strategic path to follow for future and moulds the organisation’s identity.
• A strategic vision delineates management’s aspirations for the business, providing a panoramic view of the “where we are going” and a convincing rationale for why this makes good business sense for the company.
• A clearly articulated strategic vision communicates management’s aspirations to stakeholders and helps steer the energies of company personnel in a common direction.
• A Strategic vision is a road map of a company’s future providing specifics about technology and customer focus, the geographic and product markets to be pursued, the capabilities it plans to develop, and the kind of company that management is trying to create.
• Strategic Vision is different from Mission Statement: Strategic Vision deals with where we are going, where as Mission Statement deals with Company’s present business scope and purpose.
• A company Mission is guided by the buyer’s needs it seeks to satisfy, the customer groups and market segments it is endeavouring to serve, and the resources and technologies that it is deploying in trying to please customers and achieve a Market and Industry position.

Example of Strategic Vision

“The San Antonio Express News” developed this Strategic Vision,

• “EXPAND” our customer base and enhance the franchise by pursuing multimedia opportunities.
• “DELIVER” an award-winning level of journalistic excellence, building public interest, trust and pride.
• “PROVIDE” vigorous community leadership and support.
• “INSTILL” an environment of internal and external excellence in customer service.
• “EMPOWER” and recognize each employee’s unique contribution.
• “ACHIEVE” the highest standards of quality.
• “IMPROVE” financial strength and profitability.”

Mission

• Thompson(1997) defines Mission as “the essential purpose of the organisation, concerning particularly, why it is in existence, the nature of businesses it is in, and the customers it seeks to serve and satisfy”
• Hunger and Wheelen(1999) say that “mission is the purpose and reason for the organisation’s existence”
• Mission statements could be formulated on the basis of vision that an entrepreneur decides on in the initial stages.
• A business mission helps to evolve an executive action.
• Mission of organisation is what it is and why it exists. It represents common purpose which the entire organisation shares and pursues. It is a guiding principle.

Mission Statement

• Mission of a company is expressed it terms of products and geographical scope. It includes a methodology of attaining the desired goal in vision. It defines the competitive strength of a company and it emanates from corporate vision and strategic posture of a company.
• Thus the mission of a business is a statement, a build-up philosophy of its current and future expected position with regards to its products, market leadership.
• Mission is statement which defines the role of organisation plays in a society.
• The corporate mission is growth ambition of the firm.

 Why organization should have mission?

• To ensure unanimity of purpose within the organization.
• To provide a basis for motivating the use of the organization’s resources.
• To develop a basis, or standard, for allocating organizational resources.
• To establish a general tone or organizational climate, for example, to suggest a
  businesslike operation.
• To serve as a focal point for those who can identify with the organization’s purpose and direction, and to deter those who cannot form participating further in the organization’s activities.
• To facilitate the translation of objective and goals into a work structure involving the assignment of tasks to responsible elements within the organization.
• To specify organizational purposes and the translation of these purposes into goals in such a way that cost, time, and performance parameters can be assessed and controlled.

 Characteristics of a Mission Statement

• It should be feasible & It should be precise.
• It should be clear & It should be distinctive.
• It should be motivating.
• It should be indicative of major component of strategy
• It should be indicative of how objectives are to be accomplished.

Mission Statement Creation

• To create your mission statement, first identify your organization’s “winning idea”.This is the idea or approach that will make your organization stand out from its competitors, and is the reason that customers will come to you and not your competitors.
• Next identify the key measures of your success. Make sure you choose the most important measures (and not too many of them!)
• Combine your winning idea and success measures into a tangible and measurable goal.
• Refine the words until you have a concise and precise statement of your mission, which expresses your ideas, measures and desired result.

Developing a Mission Statement

1. At is most basic; the mission statement describes the overall purpose of the organization.
2. If the organization elects to develop a vision statement before developing the mission statement, ask “Why does the image, the vision exist — what is it’s purpose?” This purpose is often the same as the mission.
3. Developing a mission statement can be quick culture-specific, i.e., participants may use methods ranging from highly analytical and rational to highly creative and divergent, e.g., focused discussions, divergent experiences around daydreams, sharing stories, etc. Therefore, visit with the participants how they might like to arrive at description of their organizational mission.
4. When wording the mission statement, consider the organization’s products, services, markets, values, and concern for public image, and maybe priorities of activities for survival.
5. Consider any changes that may be needed in wording of the mission statement because of any new suggested strategies during a recent strategic planning process.
6. Ensure that wording of the mission is to the extent that management and employees can infer some order of priorities in how products and services are delivered.
7. When refining the mission, a useful exercise is to add or delete a word from the mission to realize the change in scope of the mission statement and assess how concise is its wording.
8. Does the mission statement include sufficient description that the statement clearly separates the mission of the organization from other organizations?

Mission Statement of Ranbaxy

“To become a $ 1 Billion research based global (International) company pharmaceutical company”

Mission Statement of Graphite India Limited

“To be within top three companies in the world by achieving 1,00,000 MT Production of Graphite Electrodes before 2012”

The mission statement of Farm Fresh Produce is:

          “To become the number one produce store in Main Street by selling the highest quality, freshest farm produce, from farm to customer in under 24 hours on 75% of our range and with 98% customer satisfaction.”

• “Our goal is simply stated. We want to be the best service organization in the world.” (IBM)
• “To give ordinary folk the chance to buy the same thing as rich people.” (Wal-Mart)
• “FedEx is committed to our People-Service-Profit Philosophy. We will produce outstanding financial returns by providing totally reliable, competitively superior, global, air-ground transportation of high-priority goods and documents that require rapid, time-certain delivery.” (Federal Express)
• “Our mission is to earn the loyalty of Saturn owners and grow our family by developing and marketing U.S.-manufactured vehicles that are world leaders in quality, cost, and customer enthusiasm through the integration of people, technology, and business systems.” (Saturn)
• “In order to realize our Vision, our Mission must be to exceed the expectations of our customers, whom we define as guests, partners, and fellow employees. (mission) We will accomplish this by committing to our shared values and by achieving the highest levels of customer satisfaction, with extraordinary emphasis on the creation of value. (strategy) In this way we will ensure that our profit, quality and growth goals are met.” (Westin Hotels and Resorts)

Values

• Values are traits or qualities that are considered worthwhile; they represent an individual’s highest priorities and deeply held driving forces. (Values are also known as core values and as governing values; they all refer to the same sentiment.)
• Value statements are grounded in values and define how people want to behave with each other in the organization. They are statements about how the organization will value customers, suppliers, and the internal community. Value statements describe actions which are the living enactment of the fundamental values held by most individuals within the organization.
• The values of each of the individuals in your workplace, along with their experience, upbringing, and so on, held together to form your corporate culture. The values of your senior leaders are especially important in the development of your culture. These leaders have a lot of power in your organization to set the course and environment and they have selected the staff for your workplace.
• If you think about your own life, your values form the cornerstones for all you do and accomplish. They define where you spend your time, if you are truly living your values. Each of you makes choices in life according to your most important four – ten values. It is necessary to take the time to identify what is most important to you and to your organization.

Developing a Values Statement

• Values represent the core priorities in the organization’s culture, including what drives members’ priorities and how they truly act in the organization, etc. Values are increasingly important in strategic planning. They often drive the intent and direction for “organic” planners.
• Developing a values statement can be quick culture-specific, i.e., participants may use methods ranging from highly analytical and rational to highly creative and divergent, e.g., focused discussions, divergent experiences around daydreams, sharing stories, etc. Therefore, visit with the participants how they might like to arrive at description of their organizational values.
• Establish four to six core values from which the organization would like to operate. Consider values of customers, shareholders, employees and the community
• Notice any differences between the organization’s preferred values and its true values (the values actually reflected by members’ behaviours in the organization). Record each preferred value on a flash card, then have each member “rank” the values with 1, 2, or 3 in terms of the priority needed by the organization with 3 indicating the value is very important to the organization and 1 is least important. Then go through the cards again to rank how people think the values are actually being enacted in the organization with 3 indicating the values are fully enacted and 1 indicating the value is hardly reflected at all. Then address discrepancies where a value is highly preferred (ranked with a 3), but hardly enacted (ranked with a 1).
• Incorporate into the strategic plan, actions to align actual behaviours with preferred behaviours.

Samples of Values and Value Statements

• “To preserve and improve human life.” (Merck)
• At Merck, “corporate conduct is inseparable from the conduct of individual employees in the performance of their work. Every Merck employee is responsible for adhering to business practices that are in accordance with the letter and spirit of the applicable laws and with ethical principles that reflect the highest standards of corporate and individual behaviour…
• “At Merck, we are committed to the highest standards of ethics and integrity. We are responsible to our customers, to Merck employees and their families, to the environments we inhabit, and to the societies we serve worldwide. In discharging our responsibilities, we do not take professional or ethical shortcuts. Our interactions with all segments of society must reflect the high standards we profess.”
• Patriot Ledger (SouthofBoston.com): “We have a total commitment to these values, shaping the way we do business for our employees, our customers and our company.
• Our employees are the most valued assets of our company, essential participants with a shared responsibility in fulfilling our mission.
• We recognize that the quality, motivation and performance of our employees are the key factors in achieving our success.

Business definition:

Business explains the business of an organization in terms of customer needs, customer groups and alternative technologies.

A clear business definition is helpful in identifying several strategic choices. The choices regarding various customer groups, various customer functions and alternative technologies give the strategists various strategic alternatives.

Oerik Abell suggests defining business along the three dimension of customer groups. Customer functions and alternative technologies. They are developed as follows:

• Customer groups are created according to the identity of the customers.
• Customer functions are based on provision of goods/services to customers.
• Alternative Technologies describe the manner in which a particular function can be performed for a customer.

Business Model

A business model describes the rationale of how an organization creates, delivers, and captures value, in economic, social, cultural or other contexts. The process of business model construction is part of business strategy.

In theory and practice, the term business model is used for a broad range of informal and formal descriptions to represent core aspects of a business, including purpose, target customers, offerings, strategies, infrastructure, organizational structures, trading practices, and operational processes and policies.

Goal and objectives

Goals denote what an organisation hopes to accomplish in a future period of time in a broader aspect. They represent the future state or outcome of effort put in now. A broad category of financial and non-fmancial issues are addressed by the goals that a firm sets.

Objectives are the ends that state specifically how the goals shall be achieved. They are concrete and specific in contrast to goals that are generalised. In this manner, objectives make the goals operational. While goals may be qualitative, objectives tend to be mainly quantitative in specification.

Difference between objectives and goals

The points of difference between the two are as follows:

• The goals are broad while objectives are specific.
• The goals are set for a relatively longer period of time.
• Goals are more influenced by external environment.
• Goals are not quantified while objectives are quantified.

Broadly, it is more convenient to use one term rather than both. The difference

between the two is simply a matter of degree and it may vary widely.

What Objectives should be set?

According to Peter  Druker, objectives should be set in the area of market standing, innovation productivity, physical and financial resources,  profitability,  manager performance and development, worker performance  and attitude and public responsibility.

Areas for setting objectives:

Researchers have identified the following areas for setting objectives:

Profit Objective: It is the most important objective for any business enterprise. In order to earn a profit, an enterprise has to set multiple objectives in key result areas such as market share, new product development, quality of service etc. Ackoff calls them performance objectives.

Marketing Objective may be expressed as:  “to increase market share to 20 percent within five years” or “to increase total sales by 10 percent annually”. They are related to a functional area.

Productivity Objective may be expressed in terms of ratio of input to output. This objective may also be stated in terms of cost per unit of production. Product Objective may be expressed in terms of product development, product diversification, branding etc.

Social Objective may be described in terms of social orientation. It may be tree plantation or provision of drinking water or development of parks or setting up of community centers.

Financial Objective relates to cash flow, debt equity ratio, working capital, new issues, stock exchange operations, collection periods, debt instruments etc. For example a company may state to decrease the collection period to 30 days by the end of this year.

Human resource Objective may be described in terms of absenteeism, turnover number of grievances, strikes and lockouts etc. An example may be “to reduce absenteeism to less than 10 percent by the end of six months”.