At the heart of organizational meaning-making we find corporate vision and mission as definitions of the good or the change that we seek to create in the world. While this is absolutely essential to thriving organizations and engaging the passions of stakeholders, this is not strategy.
Vision and mission are the “what.” Strategy is the “how.” Strategy is the distillation of opportunities and maneuvers that will make it possible to realize your vision and mission. In a recent article in Strategy + Business, Ken Favaro writes that many organizations mistake what he calls “The Corporate Five” for the “Strategic Five.” The Corporate Five are mission, vision, purpose, plan and goals. You can have all of those things and still be missing a strategy.
In order to develop strategy, a firm has to be able to answer what Favaro calls “The Strategic Five” :
1. What business or businesses should you be in?
2. How do you add value to your businesses?
3. Who are the target customers for your businesses?
4. What are your value propositions to those target customers?
5. What capabilities are essential to adding value to your businesses and differentiating their value
Although most companies can articulate a vision (for instance, “to be the leading biotech company”), a mission (“to find and commercialize innovative drug therapies”), a purpose (“to improve patients’ lives”), a plan (“to develop molecule X, enter market Y, and partner with company Z”), or a goal (“to bring three innovative molecules to market by 2025”), few convincingly answer all five strategic questions, especially with one voice across their top teams and down their organizations.
They can’t answer those questions because often they haven’t asked them in a very long time, if at all.
Favaro says that companies that focus on the “Corporate Five” are mistaking execution for strategy. I’d counter that since there’s no strategy to start with there’s nothing to actually execute. The so-called “plan” is a checklist of technical to-dos, when in reality an adaptive challenge is at hand that requires new thinking. Strategy work is intrinsically adaptive change work.
Development of mission and vision and purpose are engaging exercises that tap the imagination of all stakeholders. If they are developed outside of a framework that addresses “The Strategic Five,” they are likely to lack substance and fail to achieve traction within the organization. An effective business transformation process will embed the Strategic Five into the entire process.
To read Favaro’s whole article go here.
Interested in finding your own answers to “The Strategic Five?” Read our article “Finding Time To Be Strategic.”