Silly question, I know. Without profit, businesses cannot long survive. Even not-for-profits have to be managed so they operate in a fiscally responsible way.
But when the business' strategic vision is "profit," the business has nowhere to go and no way to grow. It's a dead end because the "profit vision" offers no road or guidance to activity that can over time result in the very profit that is being sought.
Declaring the target to be "profit" is like saying the object of living is to be alive. Indeed, it is. But what one does with the privilege of living is how one learns, grows and prospers. It's no different for organizations.
Most organizations would claim a strategic vision beyond "profit." But can those associated with the organization see it? Are they captured and driven by it? Is this vision widely shared and understood? Is it relevant to today and the future?
Far too often when I have asked organizational participants why their organization is in business, the answer I get is either "to make money" or something fuzzy and vaguely associated with what the business has historically done or the products and services it has developed. I call those fuzzy statements "vestige visions," like the appendix or a prehensile tail, something that does describe the organization but is not necessarily relevant to today and the future.
(Parenthetically, I find that mission statements as typically construed have the same problem as "vestige visions": They tend to be descriptive and focused on what has been rather than prescriptive and motivating.)
For it to have great value, a strategic vision needs to be center stage in the organization and owned by the participants in a way that intensely focuses the organization. An organization with a "vestige vision" is like a boat that is lost at sea. It may still be going somewhere, but the direction may not be relevant to a successful landfall in a desirable port.
Be honest. Is your organization's strategic vision neither strategic nor visionary? Does the organization really have the "profit vision" or is it stuck on a "vestige vision"?
If so, then it's high time for the organizational leaders to get on with creating a compelling shared vision of the organization in the future that gives the organization the motive and means to change and become more successful. By doing so, you likely will make a buck or two more than you would otherwise, as well.
Formal planning reduces risk (as measured by variability of earnings). Capon, Farley and Hurlburt
Research suggests 80% of companies are dissatisfied with their planning and budgeting processes. Accenture
Only 23% of companies use a formal strategic planning process to make important strategic decisions. In 52% of companies, these decisions are made by a small senior group. McKinsey
Strategic Planning Focus of the Week: Identify and Counter Strategic Threats
A strategic threat is any significant aspect of the external environment that can block or derail the organization from moving to brighter future offered by the strategic vision.
Strategic threats can be identified through various avenues, including an environmental scan, an organizational survey and brainstorming by the strategic planning participants.
Strategic threats unless recognized, guarded against and countered can result in significant negative outcomes for the organization.
Strategic threats arise because of change. For example, markets and technology are continuously in flux. Distribution channels change. Social trends close out former needs and kill demand for old products and services.
When possible strategic threats are identified, they need to be screened, evaluated and prioritized. Organizations cannot protect against every potential threat. In looking at gaps between the strategic vision and the likely future course of the organization, the threats that will be most likely to divert the organization from the path to the vision (and which the organization has the possibility of eliminating or mitigating in same fashion) are those that need to be focused on in planning.
Strategic Vision of the Week
E.&J. Gallo Winery: "To become the most innovative global marketer and distributor of wines."
Strategic Planning Quote of the Week
“There is no more powerful engine driving an organization toward excellence and long-range success than an attractive, worthwhile, achievable vision for the future, widely shared." - Burt Nanus
Our vision is every organization creates a plan with strategies and action steps leading to greater success.
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Don't delay! Without a strategic vision and a plan to get there, your future is not as bright as it can be.
