Set the Course of Your Business
By Ben Hershey, CEO, 4Ward Consulting Group, LLC
Many of us just returned from this year’s BCMC show. How appropriate it was to be in Columbus, a city named after a visionary who discovered the new world, and the theme was “Set Your Course.” In your business, no matter the role you serve, you have a chance to set the course for success through vision, strategy and tactics. As we enter the last two months of 2019, let’s take what we’ve learned from BCMC and tune up our strategies for 2020.
Setting Strategic Direction: Vision, Strategy, and Tactics
A lot of companies I work with will stumble when establishing a vision statement. It sounds nice. Inspiring, even. But the vision is useless unless it can direct action.
Your vision lays out a destination; your destination guides your strategy; and strategy chooses action.
It’s action that leads to success. In those moments of action, having clear direction is crucial for building momentum. If your organization is like most, you will spend weeks debating every word crafting your vision, mission, strategy, and goals. But no matter how lofty, if they aren’t created in a way that provides direction, those statements are little more than high-priced indulgences. Maybe you came away from the BCMC show thinking that you need to retool your vision for the next few years. But make sure you know what you want to retool—is it vision or strategy? One of your employees may suggest that you “Provide our customers a faster installation of components in the field” as a vision. Another employee may look at that and say, “That’s a strategy.” Here are some useful definitions that will help you decide if you’ve set a direction that can truly get traction.
Envisioning the Future
Vision is timeless. It’s based on who/what you want to do. It’s why you’ve got an organization in the first place. It must be specific enough that everyone can use it to decide if their work is moving the company forward. Progress towards the vision must be measurable. A vision is independent of specific competition and, while it may mention the customer, it must guide even someone who doesn’t know the customer’s mind. The best visions imply whom the company serves, what it provides, and what distinguishes it from other companies providing the same products and services. Vision sets the broad direction. It says, “Go west, young man.”
Wrong: We will provide exceptional products and services that our customers value.
This vision requires knowing the customers’ mind in order to understand what the company provides. It doesn’t distinguish what is unique about the company, since presumably everyone in the market produces something customers value.
Right: An example from another industry we’ve assisted: “We will help boat owners everywhere navigate new seas with geographically based directional products and services.”
This vision tells us the market, the product (navigation products and services), the distinguisher (geographically based), and the progress measurement (delight).
Some organizations may call this a mission statement, rather than a vision. Or, they may have both a vision and a mission, with the vision expressing the ideal world or company, and the mission expressing the company’s purpose. For our purposes, they’re the same. A mission statement rounds out the vision. Together, they give timeless, overarching principles chosen by the company that express the company’s reason for being.
The Strategy Thing
Strategy links the destination (vision) with current reality. Strategy applies to the whole company and answers the question, “How will we reach our vision, given current market conditions, competitive scenario, regulatory environment, etc.?” Strategy is narrower than vision, but broad enough to guide companywide organization structure, hiring, capabilities that must be developed, and so on. Strategy says, “We’re going west, but we ran into this grand canyon. We can go around to the north or south. Let’s choose south.”
For example, a company may have a vision to “provide mathematically proven technology to solve the engineering needs of component manufacturers.” In the 1970s, the strategy may be doing in-house drafting while also investing in dial-up services for evaluating girder loading. In the 1990s, that same company may have a strategy of migrating towards newer PC technology to figure component drawings and using new advanced Microsoft Windows 1.0 with 5-1/4” floppy storage drives to transfer information to customers. Both strategies will reach the vision, but they are appropriate for different competitive environments, and they have different organization structures, different financing options, and different operational characteristics.
You know you have a strategy if you choose your current path from many alternatives, all of which would have reached your vision, each of which would have required hiring different people and building different systems. If you didn’t consider many alternatives, or you didn’t choose your alternative considering your competition, your vision, and your current market conditions, then you probably have a tactic, not a strategy. If you can execute your strategy with your current people, reward systems, and organization structure, then it’s not a strategy, it’s a tactic.
Tactics are limited in scope, typically just to a part of the company. They’re shorter term than a strategy. They involve executing given the existing capabilities and resources of the company. Unlike strategy, tactics generally work within the current organization structure, rather than changing the organization. Tactics say, “We’re on the south path. Let’s travel two miles today.” Your tactics probably won’t work unless they’re generated from a strategy that lays out a consistent philosophy for how your company will compete/win/attract customers in today’s market.
Your “moments of truth” are those moments in time when you build traction and momentum. For example, a moment of truth in creating a quality-driven organization might be when the CEO refuses to ship a poor-quality product, even though it will hurt quarterly numbers. Moments of truth always happen during a tactical action. That’s why you need a vision and strategy—without them, people won’t have the guidance to ensure they can move the company forward in that moment.
Your strategy also helps you find your moments of truth. If your strategy involves locking up important distributor relationships, your moments will involve reputation and relationship building, creating the perception of value to the distributors, and establishing negotiating leverage to capture an exclusive relationship. If your strategy is to be a low-cost provider, moments of truth might be times when opportunities for efficiencies arise, or incidents where you can encourage a “continuous improvement” mindset in your team.
Summary of Vision, Strategy, and Tactics
|Vision||Timeless. Internally generated. Specific enough to know what to say “No” to.||Major markets. Major uniqueness/skill/advantage. Possible strategies.|
|Strategy||Specific to time, competitors, market conditions. Answers the question, “How do we achieve our vision in the current market, regulatory, and competitive environment?”||Market segments to pursue. Which relationships to pursue (distributors, complementors, customers). Organization structure and priorities.|
|Tactic||Goal, typically < 1 year, to be achieved with existing resources, market structures, etc.||Day-to-day actions to take.|
At the end of the day, your vision and strategy only exist to drive tactics. And often, the most significant tactics are those moments of truth whose effects are far-reaching. When your vision sets direction and your strategy ties it to your current situation, they provide a compass for everyone in your organization to follow for years to come.
If the team at 4Ward Consulting can help you further hone your Vision and Strategy, contact us today; we would enjoy the opportunity to help you Set Your Course for 2020 and beyond!
Ben Hershey is CEO of the 4Ward Consulting Group, LLC team. When the industry needs an actual expert, they turn to 4Ward Consulting Group team with more than 150 years of experience. 4Ward Consulting Group is the leading provider of Management and Manufacturing Consulting to the Structural Component and Lumber Industry. A Past President of SBCA, Ben has owned and managed several manufacturing and distribution companies and is Six Sigma Black Belt Certified. Ben has provided consulting to hundreds of Component Manufacturers, Lumber Dealers, and Millwork Operations in the past seven years. You can reach Ben at ben@4WardConsult.com or 623-512-6770.
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