In an earlier blog post on Setting Strategic Objectives, I argued that organisations often get hung up on creating their Mission, Vision and Values, and generally mistake these for strategy.
This argument has now been supported by the team at Booz and Company in their recently published “How Leaders Mistake Execution for Strategy (and Why That Damages Both)” article.
In this article, Booz and Company’s Ken Favaro (senior partner with Booz & Company based in New York and global head of the firm’s enterprise strategy practice) argues that, “When discussing strategy, executives often invoke some version of a vision, a mission, a purpose, a plan, or a set of goals. I call these ‘the corporate five’. Each is important in driving execution, no doubt, but none should be mistaken for a strategy. The corporate five may help bring your strategy to life, but they do not give you a strategy to begin with.
“Nevertheless, they are often mistaken for strategy—and when that happens, real damage can ensue. If the corporate five are the cart and strategy is the horse, leaders who put the cart first often end up with no horse at all.”
It’s an interesting article, and one well worth reading as it supports our view that a) it is vitally important to get the ‘Strategic Five’ right (as follows), and b) that the development of Missions, Visions and Values are not about strategy, they are about supporting implementation and execution.
Managers need to ensure that they are not confused because, as Ken says, real damage can ensue.
The Strategic Five
- What business or businesses should you be in?
- How do you add value to your businesses?
- Who are the target customers for your businesses?
- What are your value propositions to those target customers?
- What capabilities are essential to adding value to your businesses and differentiating their value propositions?
We consider the importance of setting the right strategic objectives, and the distinction between planning and execution, in our Planning, Implementing and Managing an Effective Strategy course.