STRATEGIC DIRECTION/BUSINESS GOALS

Where do we want to be/achieve? •

This question is answered by setting goals and objectives (desired end results to be achieve at
different organizational levels and times)

This include your strategic vision/intent, mission/mission statement to guide competitive

decision making, good hierarchical objectives

Arrangement of these business goals/purposes

Whether in a strategic plan or business plan or marketing plan, the generally accepted
arrangement is as follows;

1. Vision -Ambitious firms follow it with the strategic intent

2. Mission -Sometimes accompanied with the company’s purpose/mandate, core
values/shared values, and product/service portfolio to be offered
Strategic goals or objectives -These are long-term(3-5years) objectives set by top
management, are broad/generalized/less detailed to allow flexibility at the different parts and
levels of the organization that they affect.
They are usually not SMART enough.
Are sometimes accompanied by SBU/Divisional/branch objectives especially for already
existing large organizations or firms
Tactical goals and/or objectives -Mid-term (2-3years)objectives usually set at the
departmental level -Not so generalized, they more SMART compared to strategic goals
-The decisions and actions (strategies) to achieve them are semi-structured

Operational objectives -Short –term ( up to 1year)objectives set by low level/line managers

such as supervisors and affect day-to-day activities

-Must strictly be SMART because they are for implementing the above objectives -Are
achieve through structured decisions and actions (strategies and tactics)

The first step in defining the firm’s strategic direction is to re- determine/determine the kind
of business it is in.

• This enables the company to set its strategic orientation in terms its current and future
customers, their needs and expectations you/are to satisfy, and its fundamental unique way of
satisfying them in light of our dynamic environment.

• This enables better definition/re-definition of the company’s vision and mission (if
necessary), the consistent formulation of goals and objectives, and crafting of the right
consistent strategies at different levels of the organizational hierarchy.

Their definitions, characteristics/features, and why we need them in business

• Generally;
1. All these goals (vision, mission, and objectives) are desired end results that an organization
wants to achieve
2. They should be clearly understood/shared, accepted, and seen as beneficial to the relevant-
key stakeholders especially the employees

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These goals are needed to provide the company/organization with competitive sense of
direction towards which all management/staff activities and efforts should be focused or
committed  In order to strategically/competitively achieve these goals, participatory
approaches like MBO are recommended.

1) Vision
• Strategic vision –The long-term business course. It is a guiding concept/motivating
dream of what the organization is trying to do and to become in the long-term. It is a
‘big picture’ perspective (dream) of the ‘star’ that the organization wants to become in
the long run. It shows where the organization is heading (the big picture painted about
the desired future position created by top management into the minds of all your
stakeholders of what we aiming to become in 5- 20 years )

Characteristics of an effective vision

• It should motivate your stakeholders to devote their efforts towards achieving it. Otherwise
enhance it with your ‘strategic intent’
• Clearly understood/shared by your employees and other stakeholders • Precise and concise
, easy to be recited by your key stakeholders
• Not usually achieved, it is brought to reality by the mission statement

Its benefits

• To motivate people’s efforts towards a common desired/leading place in the firm’s

competitive environment
• To create synergy due to the common desired strategic direction, that is why an effective
vision should in terms of ‘shared vision’
• It (its related strategic intent) makes people dream more, create and innovate more, be more
committed, and work more to achieve that ‘star dream’
• Task-Brain storm others

2) Mission

• Definition-is a fundamental unique aim or purpose for an organization’s/a firm’s existence

that sets it apart from others of its kind.
• It shows the world the unique reason why you are in business, in terms of the unique nature
of business you are pursuing.

Definition cont-

• Defines the firms major/target industry scope, market scope, geographical scope
• An invisible or common thread that positively sells the company to its external
customers/markets ,and holds all internal parts( especially the human assets) of the company
together by way of consistently guiding their decisions and actions
• Defined in terms of the customers to be served, needs to satisfied, and the unique way of
achieving this.

Characteristics of a good mission

i. It should clearly define the firm’s business in its environment

ii. It should positively sell the company to its customers, employees, and publics

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 iii. It should act as an ‘invisible hand or thread’ that competitively guides/holds all
parts of the organization together (perspective). Promote teamwork focusing
competitiveness.
iv. Not too broad or too narrow
v. Should reflect the firm’s fundamental uniqueness which motivates all those
concerned.
vi. Should not be a ‘mere nice statement’ which your staff will/do not follow. It
should be shared/understood, accepted, and acted upon by your key stakeholders

Why it is needed

 To show how the company uniquely fulfills its purpose for existence by reflecting the
company’s core perspective/philosophy (core values) to its internal and external
customers.
 To make the firm or organization to be acceptable among its publics especially its
target customers (corporate image).
 To consistently guide the firm’s strategic direction in relation to its present and future
customers, markets, and competitiveness.
 To guide the consistent formulation of your objectives, the strategies to achieve them,
and how to put these strategies into action.
 It acts as a rallying point hence maintaining a competitive sense of direction

Business objectives-

 definition/meaning
 Objectives are desired end-results that the organization is aiming to achieve through
its existence and what it does in terms of organizing, coordinating, leading, and
controlling activities.
 Objectives are specific aims that the organization has decided to achieve.

Characteristics of generally good objectives-

 We set several objectives.

 Should be clearly understood and accepted by key stakeholders
 Should be set in line with the company’s mission statement, strategic intent, and core
competence
 Should be relevant to the firm’s external and internal environment
 Especially the operational level objectives should be SMART
 Set through and managed by MBO
 Be hierarchical, measurable, relevant, and consistent

Benefits of having good objectives

 Organizational members become goal focused/ focused to the right objectives

(specific aims)
 They give a sense of achievement of common desired ends towards which all
management and staff functions/activities should be directed.

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To set the right mission/objectives

Consider;

1. Past company history-Past mission and objectives ,and past performance

2. Values/briefs of top management to establish a vertical fit with them
3. The relevant opportunities and threats
4. The relevant strengths and weaknesses
5. The companies core competence, mission statement, and strategic vision or intent

MBO

 A consistent cycle of clearly accepted procedures of involving all organizational

members in the achievement of common organizational goals and objective
 Aimed at ensuring commitment/ a goal contract (especially the unwritten goal
contract) among all managers (and staff) concerned in the different functional areas
and at the different levels of the entire enterprise
 Also aimed at tapping the creativity and innovativeness, facit knowledge, experience,
and other latent competences
 Effective communication, team work, motivation/encouragement/mentoring from the
managers, recognizing and rewarding excellent performance KSFs are necessary for
MBO to succeed

Steps involved in MBO

1. Central goal setting

2. Goal/objectives setting of individual departmental and operational level- through
productive/effective meetings
3. Agreeing on how these objectives are to be achieved
4. Giving them autonomy to achieve (to tap their hidden competences) those agreed upon
objectives
5. Clearly explaining how their performance is to contribute to the accomplishment of the
overall company objectives
6. Measure their performance, identify the deviations, and why the results are that way
7. Reward performers, encourage and train those trainable non-performers

What Is the Meaning of Strategic Direction?

Running a business without an eye toward strategic direction is liking setting out on a road
trip to an unfamiliar place without a map or a navigation app. You may eventually reach your
destination, but the journey will be chaotic, and you'll most likely waste more effort than
necessary. Developing a solid strategy that outlines your company direction will help you to
increase profitability while making your day-to-day work less stressful.

Strategic direction is an approach to planning that includes setting and synching short-term,
medium-term and long-term goals.

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How to Set a Strategic Direction

The importance of strategic direction lies in its capacity to orient your company's overall
purpose. Consider your vision, or your big-picture reason for wanting to be in business.
This can be as ethereal as wanting to make the world a better place or as practical as wanting
to earn as much money as possible while making the least possible effort. Your vision should
embody the "why" behind your venture

Next, consider your company's mission, or the tangible way you will make your vision into
a reality. Your mission statement will likely include some specifics about your products and
services. For example, an auto mechanic might articulate a mission to keep its customers' cars
safe and mechanically sound, and a fair-trade importer might adopt a mission to improve the
quality of life for indigenous artisans by paying fair prices for their offerings. Your mission is
the "what" to your vision's "why."

Setting Periodic Goals

 Long-term goals. By thinking through where you want to be far down the line, you'll be able
to make shorter-term plans aimed at taking you in the direction you've defined. Long-term
goals should be practical, big-picture steps aimed at moving you toward achieving your
mission and fulfilling your vision.

 Medium-term goals. These are objectives that cover a time frame of approximately two to
three years, long enough to be broad and meaningful but short enough for you to actually
be able to get specific about possible outcomes. Medium-term goals connect the scope of
long-term plans with the concrete details of shorter-term steps.

 Short-term goals. The process of setting short-term goals breaks your longer-term planning
into achievable, manageable steps. Short-term goals should take into account short-term
needs such as having to meet your rent and payroll. They should also be crafted with an eye
toward long-term objectives.

Setting Quantifiable Goals

When setting goals, frame your objectives in terms that will be easy to measure. It's far more
useful to say that you plan to increase your gross sales by 20% over the next year than to say
that you plan to grow significantly. The more specific you are about goals, the easier it will
be to see what you need to do to achieve them and to measure your success through each
stage of the process.

If you don't meet the specific targets that you have set, this does not necessarily mean that
you have failed. If you fall short by just a small margin, you probably just need to do some
tinkering with your business model. If you are nowhere near your target, you may need to
make some more major adjustments to your operations.

Keep in mind that the issue may be the goals themselves rather than your work toward
achieving them. Circumstances change, and sometimes variables appear that you couldn't
possibly have anticipated, such as the introduction of an especially savvy new competitor or a
brilliant new technology. In that case, it is prudent to re-evaluate your goals and set new
objectives that keep the current situation aligned with your strategic direction.

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Short-Term, Medium-Term & Long-Term Planning in Business

Although short-term, medium-term and long-term planning in businesses address different

time frames, they should be cut from the same cloth. The more closely you align your short,
medium and long-term goals, the more effectively you will be able to make plans that sync
your immediate objectives with your big picture vision.

Short-Term Planning

Short-term planning in business generally focuses on a three-to-six-month time frame,

especially in reference to revenue and profitability. Short-term objectives are geared towards
short-term needs such as improving cash flow or launching a new product. This short-term
perspective is especially useful for satisfying investors who want to see results or improving
your company's bottom line so you can secure additional financing for longer-term goals.
Whatever your short-term goals, make sure they serve your longer-term vision. Your new
product launch should be consistent with your overall brand and with the line of products
you're building over time. Your strategies to improve cash flow should bring in additional
revenue in ways that don't compromise your values or distract you from your overall mission.

Medium-Term Planning

Medium-term planning is often overlooked in discussions of strategic objectives, but it is

important because it brings together the clarity of shorter-term goals with the depth of longer-
term planning. A short-term goal may be based on an immediate need and a long-term goal
may be so broad that it is difficult to create measurable milestones. But a medium-term goal
is close enough for you to project a specific targeted outcome, while also being distant
enough to be meaningful for your longer-term vision. Medium-term planning generally
covers a period of about three years. It may include plans to open a new store or enter a new
market. It is a long enough time frame for you to see if you're achieving real results, yet it's a
short enough period for you to pivot and change direction if your initial strategy isn't
successful.

Long-Term Planning

Long-term planning is rooted in your company's identity and purpose. It may have elements
of specificity such as a goal to open a certain number of new stores over the next ten years.
However, it is impossible to predict market conditions and current events over such an
extended time frame. Because of this difficulty, even specific long-term plans are mainly
concrete ways to express a larger vision such as eventually supplying work shoes to your
entire region. Take your long-term planning very seriously, but adjust it over time as your
medium-term situation unfolds.