Because your strategic plan is a work in progress the MyStrategicPlan System gives you a comprehensive, one-screen module to stay current on your key performance indicators.

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Tammy Tantalizing Tacos’ top line financial goal is to increase her annual revenue by 10%. How will she achieve her financial goal? To sell more tacos. In order to sell more tacos, what must she do from her customers’ perspective? Provide great customer service. And what does she need to do to deliver great customer service? Have efficient processes that deliver food quickly. And how does she excel at quick food delivery? By having well-trained employees.

Criteria:
Use the following criteria when evaluating each objective:

• Is my objective broad and non-measurable?
• Is my objective continuous, ongoing, and non-dated?
• Does it convert my mission/vision into action?
• Does it help to sustain my competitive advantage?

Financial Growth

• Financial Growth: To exceed $10 million in the next ten years.
• Financial Growth: To increase revenue by 10% annually.
• Financial Growth: To increase gross profit by 10% annually.
• Financial Growth: To increase sales by 10% annually.

Financial Efficiency

• Financial Efficiency: To decrease expenses by 5%.
• Financial Efficiency: To increase net profit by 10%.annually.
• Financial Efficiency: To improve overall efficiency as measured by throughput.
• Financial Efficiency: To improve overall productivity (doing more with what you have).

Customer/Constituent

Current Customer

• Current Customer: Expand sales to existing customers.
• Current Customer: Increase customer retention.
• Current Customer: Increase customer loyalty.
• Current Customer: Cross sell existing products/services to current clients.
• Current Customer: Achieve and maintain outstanding customer service.
• Current Customer: Develop and use a customer database.
• Current Customer: Anticipate future customer needs through customer feedback.

New Customer

• New Customer: Introduce existing products into a new market.
• New Customer: Introduce new products to new and existing markets.
• New Customer: Anticipate future customer needs through customer feedback.
• New Customer: To expand sales to the global marketplace.

Customer Service

• Customer Service: Improve our service approach for new and existing customers.

Internal/Operational

Product/Service/Program Managment

• Product/Service/Program Mngt: To have all product meet standard of excellence guidelines. (Some businesses prefer to list their individual product or service as separate objectives.)

Operations Managment

• Operations Mngt: To continually improve internal process to realize efficiencies.
• Operations Mngt: Capitalize on physical facilities (location, capacity, etc.).
• Operations Mngt: Improve organizational structure.
• Operations Mngt: Redirect or restructure available resources.
• Operations Mngt: Increase community outreach.

Technology Management

• Technology Mngt: Increase efficiencies through use of wireless or virtual technology.
• Technology Mngt: To successfully implement and realize benefits from our computer and software systems.

Communication Management

• Communication Mngt: Improve internal communications.

Customer Management

• Customer Mngt: Acquire enhanced CRM data mining capabilities.
• Customer Mngt: To execute and maintain a CRM process that is producing results.

Marketing Management

• Marketing Mngt: To continuously broaden our customer database by obtaining new information on customer characteristics and needs.
• Marketing Mngt: Develop and implement a promotional plan to drive increased business.
• Marketing Mngt: Improve marketing, advertising and public relations.

Alliance Management

• Alliance Mngt: Establish one new strategic alliance annually.

Channel Management

• Channel Mngt: To aggressively strengthen our upstream channels.
• Channel Mngt: Improve distributor and/or supplier relationships.

People/Learning

People

• People: To hire, develop and maintain the right people, in the right “seats on the bus.”
• People: Employ professionals who create success for customers.

Training

• Training: Develop broad set of skills useful for customer support.
• Training: To develop the leadership abilities and potential of our team.

Culture

• Culture: To align incentives and staff rewards with performance.

Knowledge

• Knowledge: Transfer knowledge from leading-edge clients.
• Knowledge: To continually learn and adopt current best practices.

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No one strategic model fits all organizations, but the planning process includes certain basic elements that all churches can use to explore their vision, goals, and next steps of an effective strategic plan.

Why do a strategic plan?

Strategic planning is a process that helps focus on aligning the unique gifts an resources that God has given your organization to take advantage of your opportunities. Scripture says, “Be very careful, then, how you live—not as unwise but as wise, making the most of every opportunity” (Ephesians 5:15–16). As you do the planning, let God do the directing.

For the Christian, this is not simply projection-based planning but the realization that through prayer and obedience you can be a catalyst to help bring about a future that is in alignment with God’s will. Through prayer, the framework for a plan can be established. We do the planning, but God does the directing.

What is strategic planning?

Simply put, a strategic plan is the formalized road map that describes how your organization executes the chosen strategy. A plan spells out where an organization is going over the next year or more and how it is going to get there. A strategic plan is a management tool that serves the purpose of helping an organization do a better job, and it improves organizations because a plan focuses the energy, resources, and time of everyone in the organization in the same direction.

Strategic planning does not have to be mysterious, complicated, or time-consuming. In fact, it should be quick, simple, and easily executed. Additionally, strategic planning is not just something you cross off your list of “to-dos”—you must create a culture of strategic thinking, so your strategic planning does not become an annual retreat but, instead, a part of daily decision making.

A good strategic plan achieves the following:

• Reflects the values of the organization.
• Clearly defines what is most important for achieving success.
• Assists everyone in daily decision making.
• Gets everyone on the same page focused and pulling in the same direction.
• Creates a culture of strategic thinking and a part of daily decision making.

What are the elements of a strategic plan?

There are several different components or pieces in a strategic plan. The typical questions people have relating to the elements are the following:

• What is the difference between mission and vision?
• Which comes first–objectives or goals?
• How do they work together?

This is probably the most widely debated part of strategic planning. Every person you ask will provide a different answer. Ignore the semantics and focus on establishing a framework. What matters is having a combination of long-term and short-term markers to keep your church moving in the right direction.

Think of the elements of a typical strategic plan in the hierarchy as outlined in Figure 1:

• Mission–To define the organization’s purpose. Why do we exist?
• Values–To clarify what you stand for and believe in.
• SWOT–To assess the particular strengths, weaknesses, opportunities and threats that are strategically important to your church. (SWOT is a filtering tool to assess where you are now.)
• Advantage–To define what you do best. What do you do best?
• Vision–To explain where you are headed. Where do we want to be in five years?
• Organization-wide strategy–How will you get to your vision? What is the route you will take?
• Objectives–To connect your mission to your vision. What are the long-term, 3-year out strategic priorities you need to perform in order to achieve your vision?
• Goals–To set goals that convert the strategic objectives into specific performance targets. What are the one-year goals you are trying to achieve to support your objectives?
• Action–To set specific action plans that lead to implementing your goals. What the 30, 60, 90 days actions?
• Scorecard–To measure and manage your strategic plan. What are the key performance measured you can track in order to monitor if you are achieving your goals?

How do the elements fit together?

Because it is easy to confuse how all the elements of a plan come together and where they go, the visual Strategy Map in Figure 2 is a simple, yet clear way of looking at the whole plan. By placing all the elements of the plan into three areas, you can clearly see how the pieces fit together. Each area has certain components of the plan. The three areas are:

• Where are we now?
• Where are we going?
• How will we get there?

Where are we now?

As you think about where your organization is now, you want to look at your foundational elements (mission and values) to make sure there has not been a change. More than likely, you will not revise these two areas very often. Then you want to look at your current strategic position, which is where you look at what is happening internally and externally to determine how you need to shift and change. Here are your foundational elements:

Mission

Mission defines your purpose—the purpose for which you were founded and why you exist. A mission statement states what the church organization intends to accomplish and the needs it is endeavoring to serve. It also serves as a guide for day-to-day operations and as the foundation for future decision-making.

To create a mission statement you need to understand how God has uniquely gifted your church with core strengths, abilities, and gifts. You need to embrace your church’s uniqueness and develop plans around it. With this in mind, your mission statement will be one that expresses God’s call on your church—focusing on who you are and what you do.

To write a mission ask the following questions:

• Why do we exist?
• What is God’s purpose for our church?
• How can we, with limited resources, really make a difference?

Examples:

• To gather to worship and become empowered to serve.
• To be an oasis of faith at a busy crossroad.
• To help our community experience Jesus in a real and relevant way.
• To build an overcoming church out of broken lives through the power of Jesus.
• To exalt the Lord, equip the believer, evangelize the world, and expand the Kingdom.
• To present authentic Christianity to our families, community, country and world.

Values

Values are enduring, passionate, and distinctive core beliefs. They are guiding principles that never change. Values are why we do what we do and what we stand for. They are beliefs that guide the conduct, activities, and goals of the organization. Values are deeply held convictions, priorities, and underlying assumptions which influence our attitudes and behaviors. They have intrinsic value and importance to those inside the organization. Your core values are part of your strategic foundation.

A church’s values can dominate the kind of strategic direction it considers or rejects. When values and beliefs are deeply ingrained and widely shared by pastors, board and staff, they become a way of life within the church and they mold church strategy.

To write values ask the following questions:

• What are the core values and beliefs of our organization?
• What values and beliefs guide our daily interactions?
• What is our church really committed

Examples:

• Family–We believe there is nothing more important than strong united families.
• Excellence–We believe excellence honors God and inspires greatness.
• Equipping–We believe in equipping the saints for ministry and life by helping them to operate in their spiritual gifts.
• Prayer–We believe in the power of prayer, and that makes a critical difference in all we attempt to achieve. We are to be a house of prayer for all nations.
• Authenticity–Through authentic living, biblical authority, worship, prayer, and spirit.
• Committed Community–Through intimacy within the community, servant leadership, genuine relationships, and beauty in diversity.

SWOT (Strategic Position)

The SWOT (Strengths, Weaknesses, Opportunities, Threats) is a tool to help match internal organizational strengths with external opportunities to meet the needs of your constituents and community best. Think of the SWOT as a filtering tool to assess your current strategic position. A good understanding of your strengths and weaknesses, your opportunities, and the external threats is essential to the assessment.

The SWOT is only as good as the information it contains. Gathering information from your constituents and stakeholders about the effectiveness of your programs, services, and church is essential for the SWOT to identify key issues. The purpose of a SWOT is to help produce a good fit between your church’s internal resources and capabilities and your external environment.

When you plan you will need to set goals to build on your church’s strengths, shore up the weaknesses, capitalize on the opportunities, and recognize the threats.

Assess your strengths and weaknesses by answering these questions: what do we do well, and where could we improve?

Assess your opportunities and threats by asking what opportunities should we take advantage of and are there any emerging trends that might affect our organization?

Unique Advantage

Just what is a unique advantage? It is simply the answer to “what does your church do best?” Your unique advantage is what your church does or potentially could do better than similar organizations. The result of a well-developed and executed strategic plan is to develop a unique advantage. It is what you do best that draws constituents/stakeholders to use your programs and services instead of similar organizations. Successful churches deliberately make choices to be unique and different in activities that they are really, really good at doing and they focus all of their energy in these areas.

Your unique advantages are the foundation, the cornerstone of your strategic plan. Throughout the planning process you will need to evaluate every part of your plan to determine whether it supports or detracts from this.

To identify your unique advantages ask the following questions:

• What does your church do best?
• What can your organization potentially do better than any other organization?
• What unique skills, resources, gifts and capabilities has God placed in your church?

Examples:

• We are young-minded, progressive and culturally relevant messengers of the Gospel of Christ.
• We have a prime location.
• We have Bible-based preaching.
• We are a church of small home groups.
• We have an extensive care ministry.
• We have a strong youth ministry.

Where are we going?

The elements of the question, “Where are we going?” help you answer other questions, such as, What will my church look like in the future? Where are we headed? What is the future I want to create for my church? The following elements help you define the future for your church:

Vision

A vision is a picture of what your church’s future makeup will be and where the organization is headed. Vision provides a clear mental picture, by faith, of what your church will look like in five to ten years from now. Forming a strategic vision should provide long-term direction, delineate the organizational activities to be pursued, the capabilities it plans to develop, and infuse the church with a sense of purposeful action. It serves as a unifying focal point for everyone in the organization like a North Star. It delineates the future focus and where the church is going.

A Godly vision is based on God’s will for the church. It is a picture of seeking the needs of other people and meeting those needs. It is vitally connected to the heart of God and His perspective. A vision which is inspired by God is God-sized and will require the power of God to fulfill. A Godly vision makes your heart surge, carries you to heights you never dreamed possible, and causes exponential growth. You are empowered and motivated by it. It seizes hold of you and orders your thoughts and actions. Scripture says, “Record the vision and inscribe it on tablets, that the one who reads it may run.” (Habakkuk 2:2)

To write a vision, pray and seek God’s wisdom by asking the following questions:

• What will our church look like ten years from now?
• Where is God directing our church?
• What is God’s vision for our church?

Examples:

• To be an interdenominational, cell-based, multi-congregational church of believers in our community who practice authentic Christian community.
• To be a place where people searching to know God are welcomed and taught Biblical principles and relevant Christian community.
• To develop a loving and caring Christian community effecting a global impact for Christ through its local, regional, and international outreach.
• To be the premier seeker-driven, community church in the state.
• To become a premier multi-cultural, soul winning, disciple-making church in the are, renowned worldwide for our commitment to missions and our passion for excellence, service, and team work.

How will we get there?

Knowing how you will reach your vision is the meat of your strategic plan, but it is also the most time consuming. The reason it takes so much time to develop is because there are a number of routes from your current position to your vision. Picking the right one determines how quickly or slowly you get to your final destination. The parts of your plan that lay out your roadmap are as follows:

Strategic Objectives/Priorities

Strategic objectives are long-term, continuous strategic areas that get you moving from your mission to achieving your vision. Objectives explain how you will get there. In other words, objectives are long-term (3–5 years) general areas that state how your organization will get from its mission (where you are now) to its vision (where you are going).

Objectives are also called strategic priorities, initiatives, and cornerstones. It is helpful to think of objectives as broad general area. Objectives state the broad direction; goals then operationalize that direction. They are the continuous strategic activities necessary to achieve your vision. They define what your organization is intending to accomplish both programmatically and organizationally. Objectives work towards converting your mission into actions that will accomplish your vision and help sustain your unique advantage.

To write objectives ask these questions:

• What are the key activities that you need to perform in order to achieve your vision?
• What areas do we need to focus on over the next 3-5 years to accomplish our vision?

Examples:

• To impact strategically more lives each year.
• To manage our church on a fiscally sound operating basis.
• Expand programs/services to existing congregation.
• To serve more people in the community through new programs and services.
• To improve internal process continually to realize efficiencies.
• To improve internal communications.
• To develop the leadership abilities and potential of our staff.

Strategy

Strategy establishes a way to match your church’s strengths with opportunities so that your church comes to mind when people have a need. A strategy is like an umbrella. It is a general statement(s) that guides and covers a set of activities. You can develop one strategy for your church or guiding statement for each year. Strategy answers the question “how.” It explains how you will travel to your final destination.

Consider listing the top one to two strategies or long-term activities your church needs to pursue in order to achieve its vision by asking how will we achieve our vision and how can we best match our strengths in a way that provides value and is perceived by our constituents?

Examples:

• Overall–Number of lives changed
• 1st year–Birth of the church
• 2nd year–Leadership development
• 3rd year–Growth
• 4th year–Discipleship
• 5th year–Community outreach
• 6th year–International outreach

Goals convert your strategic objectives into specific performance targets. Effective SMART goals clearly state what you want to accomplish, when you want to accomplish it, how you are going to do it, and who is going to be responsible. Each goal should be specific and measurable. With short-term goals, the organization converts the mission, vision, and long-term objectives into performance targets. Realistic goals ought to serve as a tool for stretching an organization to reach its full potential.

It is important for the church to view goals as motivational targets, and exciting, measurable milestones for the future. Think about achieving them in a 12–18 month time frame. Write goals to build your unique advantage. Additionally, use your SWOT analysis to write goals. Match your strengths with opportunities, shore up your weaknesses and guard against threats.

Goals can be difficult to set because they should be faith-stretching without being presumptuous.

Goals ought to serve as a tool for stretching a church to reach its full potential. This means setting them high enough to be challenging to energize the organization and its strategy. Prayerfully seek God’s guidance in setting faith goals. Let God give you things He wants you to do. Hold your plans before the Lord.

The following is an explanation of the criteria for SMART goals:

• Specific–Goals must answer the questions: How much? What kind of performance is to be accomplished?
• Measurable–Goals must be stated in measurable or quantifiable terms: Can we measure this goal? How will we know if we achieved this goal?
• Aggressive yet Achievable–Is the goal aggressive yet achievable? Goals must provide a stretch that inspires people to aim higher. Set goals you know you can realistically achieve.
• Relevant/Realistic–Is the goal relevant to achieving the objective? Goals must maintain consistency and focus.
• Time Specific–Is the goal time specific? Goals must answer the question, “by when is it to be accomplished?”

Write goals by asking these questions:

• What are the 1- to 3-year goals we are trying to achieve to support our strategic objective?
• What are your specific, measurable, and realistic targets of accomplishment?

Action Items

Action items are plans that set specific actions that lead to implementing your goals. Action items are basically a “To-Do List” for each goal. It involves listing out the concrete steps that you need to accomplish in order to achieve your goals. An action plan explains who is going to do what, by when, and in what order for the church to reach its goals. The design and implementation of the action planning depend on the nature and needs of the organization.

get buy-in from your stakeholders is to ensure implementation of action items, it is important to assign responsibilities and deadlines. A great method to assign each goal to a board member, staff, or volunteer. Ask him/her to write the action plan and be responsible for making sure each task is accomplished. Another method is to identify all the actions that need to occur in the next ninety days. You can continue this same process every ninety-day increment until the goal is achieved.

To write action items ask, “What are we going to do in the next 90, 60, 30 days to work towards this goal?”

Scorecard

To help monitor your strategic plan, one of the best tools around is the Balanced Scorecard developed by Kaplan and Norton from Harvard. The scorecard is to be used as both a measurement and management tool to assist in fulfilling an organization’s vision. With it, you can actively track progress towards your goals.

For each goal put a measurement and target on a scorecard (in Excel). With the scorecard, you can actively track your progress on a monthly basis. To begin using the scorecard, select the “Top Five” key goals that you want to measure that will have the most impact in moving your church forward.

To develop a scorecard ask, “what are the key performance measures you can track in order to monitor if you are achieving your goals?”

Execution

Implementation is the most difficult part of the planning process: it is actually achieving the goals set out in the plan while remaining alert and flexible to new opportunities as they unfold. The overall aim is integrating the strategic planning with daily, weekly, and monthly routines. It is good to remember that a plan that is well-implemented brings Godly success to the church.

An administrator devoted to the successful implementation of the plan is key. The plan needs to be supported with people, money, time, systems, and, above all, communication. Communicate the plan to everyone in your organization. Hold a monthly or quarterly strategy meeting to report on the progress toward achieving the goals. Take corrective actions as needed. Above all, remember that implementing the plan requires continued daily prayer for direction accompanied by obedient action in response to what God reveals.

Conclusion

A strategic plan is a living, dynamic document. It drives your church and must be integrated into every fiber of your organization, so all staff is helping to move the church in the same direction. All the best missions and strategies in the world are a waste of time if they are not implemented. To be truly successful, the plan cannot gather dust on the bookshelf. You know what “shelf” we are talking about.

Strategic planning is about keeping the plan active so that it does not gather that proverbial dust. Know what your end result looks like and where your milestones should be. Plan your near-term actions and evaluate your progress each quarter. Are you where you thought you would be if you had been on target? Or, if you are off target, how far are you off? The course correction to put you back on track becomes your next action plan. When your church has a clear plan and acts according to the plan, you are going to go from where you are to where you want to go, therefore, ensuring your success!

Click here to download the full PDF version

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MANY ASPECTS of an envisioned future can be influenced or changed by decisions and actions you make today. For the church, this is not simply projection-based planning but the realization that through prayer and obedience you can be a catalyst to help bring about a future that is in alignment with God’s will. Through prayer, the framework for plan is established. Implementing strategy requires continued daily prayer for direction accompanied by obedient action in response to what God reveals.

One of the questions many churches wrestle with is, “Should a church try to plan future direction?” James 4:14 (NASB) says, “Yet you do not know what your life will be like tomorrow. You are just a vapor that appears for a little while and then vanishes away.” So why plan? The next verse goes on to say, “Instead, you ought to say, ‘If the Lord wills, we will live and also do this or that.” The real issue is not whether we should plan; it is whether we will put God’s will first in our planning, always deferring to His wisdom and sovereignty.

Our attitude when we plan should result in this kind of prayer: “God, we want Your will above everything else. We’re not just asking You to bless whatever plan we devise—we want Your wisdom. We want to move by Your direction and in Your timing. Please guide our thoughts and keep our hearts tuned to Yours.”

God designed us with the ability and need to plan. From the moment He placed Adam in the Garden “to work it and take care of it” (Genesis 2:15), planning became essential. If anything, it is even more important after the Fall:

“Be very careful, then, how you live— not as unwise but as wise, making the most of every opportunity, because the days are evil. Therefore do not be foolish, but understand what the Lord’s will is. Do not get drunk on wine, which leads to debauchery. Instead, be filled with the Spirit” (Ephesians 5:15–8).

These verses warn us not to be foolish, just doing what comes naturally with no organizational strategy. That results in weakness and missed opportunities to live for God in an evil environment. Planning is a necessity, helping us to be aware and make the most of the opportunities God provides. The key is to make plans by seeking God and asking for His discernment.

A Scriptural Basis for Planning

There are many reasons why it is scriptural to plan. Consider these reasons and supporting scriptures:

God’s Word Teaches That We Should Plan

“The plans of the diligent lead to profit” (Proverbs 21:5). “Commit to the Lord whatever you do, and your plans will succeed” (Proverbs 16:3).

Planning Helps To Enable God’s Best For Us

God wants only the best for his children. When we make Him the center of our planning, we free Him to give us His best. “May he give you the desire of your heart and make all your plans succeed” (Psalm 20:4).

Planning Means Anticipating Costs and Consequences

“The wisdom of the prudent is to give thought to their ways” (Proverbs 14:8). Prudent churches know where they are going. Planning helps them get there. Every mistake revealed on a planning sheet saves the cost, pain, and waste of the same mistake in real life.

A wise person calculates the hard and hidden costs. Luke 14:28–33 presents two parables that underscore the importance of counting the cost. The first is about building a tower: “Suppose one of you wants to build a tower. Will he not first sit down and estimate the cost to see if he has enough money to complete it?” (Luke 14:28). Jesus relates both stories to the cost of being His disciple, emphasizing the price to be paid and the necessity of counting the cost beforehand.

Planning Produces Favor

When God gives us understanding, we gain favor with man. “Good understanding wins favor” (Proverbs 13:15). People will see that we know where we are going and how to get there, that we know the costs as well as the consequences. Being diligent assumes planning, and those plans lead to plenty. “The plans of the diligent lead to profit as surely as haste leads to poverty” (Proverbs 21:5).

Planning Helps Us to Heed the Warnings in Scripture

The Scriptures warn us: “Do not boast about tomorrow, for you do not know what a day may bring forth” (Proverbs 27:1). “Pride only breeds quarrels, but wisdom is found in those who take advice” (Proverbs 13:10). Pride, as used here, means relying solely on our own opinion and not seeking God’s wisdom or the counsel of others. This is human nature—the fallen nature that is in deadly rebellion to God’s purposes.

A good planning process keeps us humble and constantly returns us to God for His perspective. While planning, we continually ask, “Lord, what is your direction in this area?”

Planning Can Keep Us From Disaster

Planning can keep us from doing what might seem right but would end up in disaster. We usually intend to do the right thing but we often fail to think through the whole process. After the disaster, our postmortem evaluation reveals that we did not consider unintended consequences: “There is a way that seems right to a man, but in the end it leads to death” (Proverbs 14:12).

We need to be prudent, carefully considering our steps; “A simple man believes anything, but a prudent man gives thought to his steps” (Proverbs 14:15).

How We Should Approach Planning

Scripture teaches us the planning process. Consider these guidelines:

Plan By Seeking God’s Wisdom

We begin the planning process by seeking what God wants us to accomplish. He reveals His desires through Scripture, inspired thoughts in our minds, and the counsel of others. He may also use dreams, visions, and prophecy.

The key is to meet with God, get our directions from Him, and then be obedient. There is no substitute for serious study of God’s Word. The same is true for unhurried time in which we not only speak our concerns but also listen. Look at the importance God places on wisdom:

“Teach us to number our days aright, that we may gain a heart of wisdom” (Psalm 90:12).

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• Where are we now?
• Where are we going?
• How will we get there?

Each part has certain elements to show you how and where things fit it.

Where are we now?

As you think about where your organization is now, you want to look at your foundational elements (mission and value) to make sure there has not been a change. More than likely, you will not revise these two areas very often. Then you want to look at your current position or your strategic position. This is where you look at what is happening internally and externally to determine how you need to shift and change You should review your strategic position regularly through the use of a SWOT. These elements are as follows:

• Mission statement: The mission describes your organization’s purpose — the purpose for which you were founded and why you exist. Some mission statements include the business of the organization. Others explain what products or services they produce or customers they serve. Does your mission statement say what you do? Why does your organization exist?
• Values and/or guiding principles: This clarifies what you stand for and believe in. Values guide the organization in its daily business. What are the core values and beliefs of your company? What values and beliefs guide your daily interactions? What are you and your people really committed to?
• SWOT: SWOT is an acronym that stand for strengths, weaknesses, opportunities, and threats. These elements are crucial in assessing your strategic position with your organization. You want to build on your company’s strengths; shore up the weaknesses; capitalize on the opportunities; and recognize the threats.

Where are we going?

The elements of the question Where are we going? help you answer other questions such as What will my organization look like in the future? Where are we headed? What is the future I want to create for my company? Because the future is hard to predict, you can have fun imagining what it may look like. The following elements help you define the future for your business:

• Sustainable competitive advantage: Sustainable competitive advantage explains what your are best at compared to your competitors. Each company strives to create an advantage that continues to be competitive over the time. What can you be best at? What is your uniqueness? What can your organization potentially do better than any other organization?
• Vision statement: Your vision is formulating a picture of what your organization’s future makeup will be and where the organization is headed. What will your organization look like in 5 to 10 years from now?

How will we get there?

Knowing how you’ll reach your vision is the meat of your strategic plan, but it’s also the most time consuming. The reason it takes so much time to develop is because there are a number of routes from your current position to your vision. Picking the right one determines how quickly or slowly you get to your final destination.
The parts of your plan that layout your roadmap are listed below:

• Strategic objectives: Strategic objectives are long-term, continuous strategic areas that help you connect your mission to your vision. Holistic objectives encompass four areas: financial, customer, operational, and people. What are the key activities that you need to perform in order to achieve your vision?
• Strategy: Strategy establishes a way to match your organization’s strengths with market opportunities so that your organization comes to mind when your customer has a need. This section explains how you travel to your final destination. Does your strategy match your strengths in a way that provides value to your customers? Does it build an organizational reputation and recognizable industry position?
• Short-term goals/priorities/initiatives: Short-term goals convert your the strategic objectives into specific performance targets. You can use goals, priorities, initiatives interchangeably. In this book, I use goals to define short-term action. Effective goals clearly state what you want to accomplish, when you want to accomplish it, how you’re going to do it, and who’s going to be responsible. Each goal should be specific and measurable. What are the 1- to 3-year-goals you’re trying to achieve to reach your vision? What are your specific, measurable, and realistic targets of accomplishment?
• Action items: Action items are plans that set specific actions that lead to implementing your goals. They include start and end dates and appointing a person responsible Are your action items comprehensive enough to achieve your goals?
• Scorecard: A scorecard measures and manages your strategic plan. What are the key performance indicators you need to track to monitor whether you’re achieving your mission? Pick 5 to 10 goal related measures you can use to track the progress of your plan and plug them into your scorecard.
• Execution: In executing the plan, identify issues that surround who manages and monitors the plan and how the plan is communicated and supported. How committed are you to implementing the plan to move your organization forward? Will you commit money, resources, and time to support the plan.

Use our plan

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SWOT Analysis

SWOT is an acronym used to describe the particular Strengths, Weaknesses, Opportunities, and Threats that are strategic factors for a specific company. A SWOT analysis should not only result in the identification of a corporation’s core competencies, but also in the identification of opportunities that the firm is not currently able to take advantage of due to a lack of appropriate resources. (Wheelen, Hunger pg 107)

The SWOT analysis framework has gained widespread acceptance because it is both simple and powerful for strategy development. However, like any planning tool, SWOT is only as good as the information it contains. Thorough market research and accurate information systems are essential for the SWOT analysis to identify key issues in the environment. (Marketing and Its Environment, pg 44)

Assess your market:

• What is happening externally and internally that will affect our company?
• Who are our customers?
• What are the strengths and weaknesses of each competitor? (Think Competitive Advantage)
• What are the driving forces behind sales trends?
• What are important and potentially important markets?
• What is happening in the world that might affect our company?
• What does it take to be successful in this market? (List the strengths all companies need to compete successfully in this market.)

Assess your company:

• What do we do best?
• What are our company resources – assets, intellectual property, and people?
• What are our company capabilities (functions)?

Assess your competition:

• How are we different from the competition?
• What are the general market conditions of our business?
• What needs are there for our products and services?
• What are the customer-market-technology opportunities?
• What are the customer’s problems and complains with the current products and services in the industry?
• What “If only….” Statements does a customer make?

Opportunity an area of “need” in which a company can perform profitably.

Threat

challenge posed by an unfavorable trend or development that would lead (in absence of a defensive marketing action) to deterioration in profits/sales.

An evaluation needs to be completed drawing conclusions about how the opportunities and threats may affect the firm.

EXTERNAL: MACRO- demographic/economic, technological, social/cultural, political/legal MICRO- customers, competitors, channels, suppliers, publics INTERNAL RESOURCES: the firm

Competitor analysis is a critical aspect of this step.

• Identify the actual competitors as well as substitutes.
• Assess competitors’ objectives, strategies, strengths & weaknesses, and reaction patterns.
• Select which competitors to attack or avoid.

The Internal Analysis of strengths and weaknesses focuses on internal factors that give an organization certain advantages and disadvantages in meeting the needs of its target market. Strengths refer to core competencies that give the firm an advantage in meeting the needs of its target markets. Any analysis of company strengths should be market oriented/customer focused because strengths are only meaningful when they assist the firm in meeting customer needs. Weaknesses refer to any limitations a company faces in developing or implementing a strategy (?). Weaknesses should also be examined from a customer perspective because customers often perceive weaknesses that a company cannot see. Being market focused when analyzing strengths and weaknesses does not mean that non-market oriented strengths and weaknesses should be forgotten. Rather, it suggests that all firms should tie their strengths and weaknesses to customer requirements. Only those strengths that relate to satisfying a customer need should be considered true core competencies. (Marketing and Its Environment, pg 44)

The following area analyses are used to look at all internal factors effecting a company:

• Resources: Profitability, sales, product quality brand associations, existing overall brand, relative cost of this new product, employee capability, product portfolio analysis
• Capabilities: Goal: To identify internal strategic strengths, weaknesses, problems, constraints and uncertainties

The External Analysis examines opportunities and threats that exist in the environment. Both opportunities and threats exist independently of the firm. The way to differentiate between a strength or weakness from an opportunity or threat is to ask: Would this issue exist if the company did not exist? If the answer is yes, it should be considered external to the firm. Opportunities refer to favorable conditions in the environment that could produce rewards for the organization if acted upon properly. That is, opportunities are situations that exist but must be acted on if the firm is to benefit from them. Threats refer to conditions or barriers that may prevent the firms from reaching its objectives. (Marketing and Its Environment, pg 44)

The following area analyses are used to look at all external factors effecting a company:

• Customer analysis: Segments, motivations, unmet needs
• Competitive analysis: Identify completely, put in strategic groups, evaluate performance, image, their objectives, strategies, culture, cost structure, strengths, weakness
• Market analysis: Overall size, projected growth, profitability, entry barriers, cost structure, distribution system, trends, key success factors
• Environmental analysis: Technological, governmental, economic, cultural, demographic, scenarios, information-need areas Goal: To identify external opportunities, threats, trends, and strategic uncertainties

The SWOT Matrix helps visualize the analysis. Also, when executing this analysis it is important to understand how these element work together. When an organization matched internal strengths to external opportunities, it creates core competencies in meeting the needs of its customers. In addition, an organization should act to convert internal weaknesses into strengths and external threats into opportunities.

SWOT

Focus on your strengths. Shore up your weaknesses. Capitalize on your opportunities. Recognize your threats.

Identify

• Against whom do we compete?
• Who are our most intense competitors? Less intense?
• Makers of substitute products?
• Can these competitors be grouped into strategic groups on the basis of assets, competencies, or strategies?
• Who are potential competitive entrants? What are their barriers to entry?

Evaluate

• What are their objectives and strategies?
• What is their cost structure? Do they have a cost advantage or disadvantage?
• What is their image and positioning strategy?
• Which are the most successful/unsuccessful competitors over time? Why?
• What are the strengths and weaknesses of each competitor?
• Evaluate competitors with respect to their assets and competencies.

Size and Growth What are important and potentially important markets? What are their size and growth characteristics? What markets are declining? What are the driving forces behind sales trends?

Profitability For each major market consider the following: Is this a business are in which the average firm will make money? How intense is the competition among existing firms? Evaluate the threats from potential entrants and substitute products. What is the bargaining power of suppliers and customers? How attractive/profitable are the market now and in the future?

Cost Structure What are the major cost and value-added components for various types of competitors?

Distribution Systems What are the alternative channels of distribution? How are they changing?

Market Trends What are the trends in the market?

Key Success Factors What are the key success factors, assets and competencies needed to compete successfully? How will these change in the future?

Environmental Analysis An environmental analysis is the four dimension of the External Analysis. The interest is in environmental trends and events that have the potential to affect strategy. This analysis should identify such trends and events and the estimate their likelihood and impact. When conducting this type of analysis, it is easy to get bogged down in an extensive, broad survey of trends. It is necessary to restrict the analysis to those areas relevant enough to have significant impact on strategy.

This analysis is divided into five areas: economic, technological, political-legal, sociocultural, and future.

Economic What economic trends might have an impact on business activity? (Interest rates, inflation, unemployment levels, energy availability, disposable income, etc)

Technological To what extent are existing technologies maturing? What technological developments or trends are affecting or could affect our industry?

Government What changes in regulation are possible? What will their impact be on our industry? What tax or other incentives are being developed that might affect strategy development? Are there political or government stability risks?

Sociocultural What are the current or emerging trends in lifestyle, fashions, and other components of culture? What are there implications? What demographic trends will affect the market size of the industry? (growth rate, income, population shifts) Do these trends represent an opportunity or a threat?

Future What are significant trends and future events? What are the key areas of uncertainty as to trends or events that have the potential to impact strategy?

Internal Analysis Understanding a business in depth is the goal of internal analysis. This analysis is based resources and capabilities of the firm.

Resources A good starting point to identify company resources is to look at tangible, intangible and human resources.

Tangible resources are the easiest to identify and evaluate: financial resources and physical assets are identifies and valued in the firm’s financial statements.

Intangible resources are largely invisible, but over time become more important to the firm than tangible assets because they can be a main source for a competitive advantage. Such intangible recourses include reputational assets (brands, image, etc.) and technological assets (proprietary technology and know-how).

Human resources or human capital are the productive services human beings offer the firm in terms of their skills, knowledge, reasoning, and decision-making abilities.

strategic planning analysis

Capabilities

Resources are not productive on their own. The most productive tasks require that resources collaborate closely together within teams. The term organizational capabilities is used to refer to a firm’s capacity for undertaking a particular productive activity. Our interest is not in capabilities per se, but in capabilities relative to other firms. To identify the firm’s capabilities we will use the functional classification approach. A functional classification identifies organizational capabilities in relation to each of the principal functional areas.

strategic planning swot

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Questions to Ask:

• What will our business look like in 3 to 5 years from now?
• What new things do we intend to pursue?
• What future customer needs do we want to satisfy?

Futurecasting

• Does our vision statement provides a powerful picture of what our business will look like in 3 to 5 years from now?
• Is your vision statement a picture of your company’s future?

Audacious

• Does our vision statement represents a dream that is beyond what we think is possible?
• Does it represent the mountaintop of where the company is headed?

Motivating

• Does our vision statement clarify the direction in which our organization needs to move?
• Does it clarify the future direction the company is headed?
• Does it clarify the customer focus our company should have?Does it clarify the market position our company should try to occupy?
• Does is clarify the business activities our company it to pursue?
• Does is clarify the capabilities our company plans to develop?

Purpose-Driven

• Does our vision statement give employees a larger sense of purpose?
• Is our vision statement worded in such a way that our employees see themselves as “building a cathedral” rather than “laying stones.”

Inspiring

• Is our vision statement worded in engaging language that inspires and engages people?
• Does it create a vivid image in people’s heads that provokes emotion and excitement?
• Does it create enthusiasm and pose a challenge that inspires and engages people in the company?

Capitalizes on Unique Competencies

• Does our vision statement build on our company’s core competencies?
• Does it build on our company history, customer base, strengths, and unique capabilities, resources and assets?

Kouzes, J. and Posner, B. “Envisioning your Future: Imagining Ideal Scenarios,” Futurist
(May 1996, v 30, p.14)

Talk of being a visionary goes hand-in-hand with talk of leadership. An intriguing article from the Futurist, entitled “Envisioning your Future: Imagining Ideal Scenarios,” discusses basically, “a leader’s step-by-step guide to envisioning the future – and communicating it to others” (Kouzes and Posner, 1996). This 8 step program has a very simple, yet very useful, fundamental idea. The idea is that by having a vision is to be an idealist. This idealism should not be confused with unrealistic ideas; it should be used synonymously with having “a standard of excellence”. A person that is by nature a visionary looks into the future as though it is filled with possibilities, not probabilities.

Kim, W.Chan, Mauborgne, Renee. 2002. Charting Your Company’s Future. Harvard Business Review, June 2002 volume. Harvard Business School, Boston, MA

One article from the June 2002 issue entitled Charting your Company’s Future presented a novel way to present a strategic plan. Usually a strategic plan is a stuffy, numbers-filled document that presents a lot of history, some lengthy description of the competition, some goals and initiatives, and a budget. The authors make the point that it is not surprising that many strategic plan don’t result in action or implementation.

They present four steps of visualizing strategy:

1. Visual awakening – draw an as-is picture and see where you need to change
2. Visual exploration – look at alternatives – customers, products, services, etc
3. Visual Strategy Fair – draw a “to-be” based on field insights, get feedback from a wide audience, build the best “to-be”
4. Visual Communication – Show before and after, support those projects that close the gap to your new strategy.
   The pictures are in reality a series of line charts that plot the key metrics or elements of the strategy against competitors and customer needs. The visual tools are very helpful, and I have used this principle in many large meetings where a diverse group with very different agendas would build the picture cross-functionally, and begin to see inter-relationships that may not have been understood previously.

“What will our business look like in 5 to 10 years from now?”
“Success is about maintaining the vision even through the most grueling details.”

Strategic Vision

A strategic vision is a view of an organization’s future direction and business makeup. It is a guiding concept for what the organization is trying to do and to become. Whereas the focus of the company’s mission tends to be on the present, the focus of a strategic vision is on a company’s future. If the statement of mission speaks as much to the future path the organization intends to follow as to the present organizational purpose, then the mission statement incorporates the strategic vision and there’s no separate need for a vision.) (Thompson Strickland p.24)

A vision statement answers the questions “What will our business look like in 5 to 10 years from now?” A strategic vision is a roadmap of a company’s future – the direction it is headed, the customer focus it should have, the market position it should try to occupy, the business activities to be pursued, and the capabilities it plans to develop. Forming a strategic vision of what the company’s future business makeup will be and where the organization is headed is needed so as to provide long-term direction, delineate what kind of enterprise the company is trying to become, and infuse the organization with a sense of purposeful action. Strategic vision charts the course for the organization to pursue and creates organizational purpose and identity. Strategic vision spells out a direction and describes the destination. (Thomas Strickland, p.3, 27)

A vision statement is a powerful picture of what the company’s business can and should be a decade from now. When a strategic vision conveys the market position it intends to stake out and what course the company is going to follow, then the vision is truly capable in

1. guiding managerial decision making
2. shaping the company’s strategy
3. impacting how the company is run.(Thomas Strickland, p.28)

A well-worded strategic vision statement has real value: (Thomas Strickland,, p.36)

1. It crystallizes senior executive’s own views about firm long-term direction and future.
2. It guides managerial decision making.
3. It conveys an organizational purpose that arouses employee buy-in and commitment.
4. It provides a beacon lower-level managers can use to form departmental missions, set departmental objectives, and craft strategies.
5. It helps an organization prepare for the future.

Developing a Strategic Vision Statement

The entrepreneurial challenge in developing a strategic vision is to think creatively about how to prepare a company for the future. It requires rational analysis of what the company should be doing to get ready for the changes coming in its present business and to capitalize on newly developing market opportunities. In formulating a company vision, we need to ask some of the following questions: (Thomas Strickland, p.4, 33)

Criteria of a Strategic Vision Statement

The whole idea behind developing a mission statement is to set an organization apart from others in its industry and give it its own special identity, business emphasis, and path for development. The following are some characteristics of a good mission statement: (Thompson Strickland, p.29, 34-35)

• The Vision Statement Provides a Picture of What Our Business will Look Like in 5 to 10 Years from Now.
  It should have a time horizon of a decade or more.
• The Vision Statement Represents a Dream that is Beyond What you Think is Possible
  It represents the mountain top of where the company is headed. Visioning takes you out beyond the present.

Some examples are:

• “We will put a man on the moon before the end of the decade.” (President John F. Kennedy)
• ” A mortgage loan company sets a goal of a 15-minute loan. (The industry average is several days.)
• ” Breaking the four-minute mile (in track and field).

The Vision Statement Clarifies the Direction in Which Our Organization Needs to Move

The Vision Statement is Worded To Give Employees a Larger Sense of Purpose.
It is worded to give employees a larger sense of purpose – so they see themselves as “building a cathedral” rather than laying stones.”

The Vision Statement is Worded in Engaging Language that Reaches Out and Grabs People

It creates a vivid image in people’s heads that provokes emotion and excitement. It creates enthusiasm and poses a challenge that inspires and engages people in the company.

Benefits of a Vision Statement

Seeing the benefits of vision can be a powerful motivation for individuals to reprioritize their activities and resources. A vision is beneficial for some of the following reasons:

• It empowers people and focuses their efforts
• It focuses energy for greater effectiveness
• It raises the standard of excellence
• It establishes meaning for today
• It gives hope for the future
• It brings unity to community
• It provides a sense of continuity
• It raises commitment level
• It brings positive change

ACTIVITY

Here’s an exercise I like us to do: Visualize walking into a room three years from now and shaking hands with yourself. Who are you? What is your life like? What is your business like? Write down what you saw.
Don’t let yourself wake up in three years and say, ‘I’m three years older, and I just happened to get here.’ Clarify your vision so that you can grow into it.”

Communicating the Mission and Strategic Vision

• A well-articulated strategic vision creates enthusiasm. Mangers need to communicate the mission and vision in words that induce employee buy-in, build pride, and create a strong sense of organizational purpose.
• Find it everywhere. When the mission statement is created, make it visible! Post it on the conference wall, place it on promotional materials, even on the packaging of products.
• Presented and repeated. They have to be presented over and over as a worthy organizational challenge, one capable of benefiting customers in a valuable and meaningful way.

Vision Casting

Communication of a vision is the difficult process of inspiring others to see the future reality which you see and are committed to make happen. Vision will help people focus their energies so real needs can be met. When communicating a vision remember the following:

• Clearly articulate the vision of your organization.
• Be enthusiastic toward vision and the benefits.
• Repeatedly share the vision in various ways, in order to be effective.
• Carefully plan how you will get your constituency to become committed to the vision. The people who will help you implement your vision must embrace the vision.
• Beginning to pursue the vision draws people’s attention and commitment to the vision. There is a snowball effect which begins to happen as people begin to catch on to the vision.

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Questions to Ask:

• What is our business and what are we trying to accomplish on behalf of our customers?
• What is our company’s reason for existing?

Criteria for Evaluating a Mission Statement

• Is our mission statement focused on satisfying customer needs rather than being focused on the product?
• Does our mission statement tell who our customers are?
• Does our mission statement explain what customer needs our company is trying to satisfy?
• Does our mission statement explain how our company will serve its customers?
• Does our mission statement fit the current market environment?
• Is our mission statement based on our core competencies? (A core competency is a company strength.)
• Is our mission statement motivating and does it inspire employee commitment?
• Is our mission statement realistic?
• Is our mission statement specific, short, sharply focused and memorable.
• Is our mission statement clear and easily understood?
• Does our mission statement say what we want to be remembered for?

“What is our business and what are we trying to accomplish on behalf of our customers?” (Direction, umbrella statement, purpose statement, scope of operation)

Purpose Statement

What a company is currently seeking to do for its customers is often termed the company’s mission. It answers the question “What is the company’s reason for existing?” A mission statement is a statement of the company’s purpose. A mission statement is useful for putting the spotlight on what business a company is presently in and the customer needs it is presently endeavoring to serve. A mission statement deals with the present and answers the question “What is our business and what are we trying to accomplish on behalf of our customers?” A mission statement is a logical vantage point from which to look down the road. (Thomas Strickland, p.4, 28)

A mission statement defines the company’s purpose. It is a single statement of why something or someone exists. The question to ask to determine purpose is:

In light of all the needs we see, why do we exist as an organization?

A mission statement is like your North Star. A North Star, is not a place you go, it is a fixed point giving you perspective on where you are going. Your mission statement keeps you headed in the right general direction. A mission statement is a very specific umbrella statement explaining why you do everything you do within your organization. (Bobb Beihl)

A mission statement is a statement of the organization’s reason for being, its purpose – what it wants to accomplish in the larger environment. (Kotler p.49). It explains why the organization does what it does. It says what, in the end, the organization wants to be remembered for.(Drucker). A clear mission statement acts as an “invisible hand” that guides people in the organization. (Kotler p.49).

An effective mission statement clearly defines who the customer is and what services and products the business intends to provide. It also serves as a guide for day-to-day operations and as the foundation for future decision-making.

Contemporary strategic marketing perspectives indicate that an organization should define a business by the type of customers it wishes to serve, the particular needs of those customers groups it wishes to satisfy, and the means or technology by which the organization will satisfy these customer needs. Thus the firm will be perceived and act more customer & market-oriented. (A customer-satisfying entity, not a product-producing entity.) (Kerin & Peterson, p.2).

A company’s Mission Statement acts as the company’s compass. The mission is the path. (The vision is the end point.) The mission directs the company to its vision (dream). With it, anyone in the organization can always judge the direction the company is moving in relation to its stated purpose. With it, one can easily make adjustments to keep the company moving in the direction intended.

Missions may need to be revised every few years in response to every new turn in the economy. A company must redefine its mission if that mission has lost credibility or no longer defines an optimal course for the company. (Kotler p.68)

Without the mission statement, a company is lost, and will drift according to the pressures of the business environment. The fundamental problem, termed mission creep, has been a diffusion of focus. There is the tendency of successful organizations to try to extend their influence beyond the limits of their core expertise. So if you want to stay focused, develop a clear, concise mission statement.

Writing a Mission Statement Mission Statement = Define of company’s business + Meeting customer needs

Questions to Ask in Writing a Mission Statement: (Bobb Beihl)

1. What single, solitary word is the focus for our organization? This is a single focus word within our organization.
2. What would be the 2 or 3 words that would explain why we exist?
3. What one sentence would sum up what our organization is about, in a very simple, clear, easy to understand way? Take your 2-3 words and put them into a single non-technical sentence that anyone could easily understand.

Criteria of a Good Mission Statement

Changing the mission or creating an organization’s first mission statement is a process of gathering ideas and suggestions for the mission and honing them into a short, sharply focused phrase that meets specific criteria.

An effective mission statement clearly defines who the customer is and what services and products the business intends to provide. It also serves as a guide for day-to-day operations and as the foundation for future decision-making. The following are criteria for a good mission statement:

The Mission Statement is Focuses on Satisfying Customer Needs A mission statement should focused on satisfying customer needs rather than being focused on the product. Products and technologies eventually become outdated, but basic market needs may last forever. A market-oriented mission statement defines the business in terms of satisfying basic customer needs. For examples refer to the following “Market-Oriented Business Definitions” table. (Kotler p.49)

mission statements

The Mission Statement Tells “Who” Our Customers are. (Thompson Strickland, p.30) Who is being satisfied? A company should define the type of customers it wishes to serve. Which customer groups it is targeting. Customer groups are relevant because they indicate the market to be served, the geographic domain to be covered, and the types of buyers the firm is going after.

The Mission Statement Explains “What” Customer Needs Our Company is Trying to Satisfy. What customer needs is the company trying to satisfy? A company should define the particular needs of those customers groups it wishes to satisfy. A product or service becomes a business when it satisfies a need or a want.

The Mission Statement Explains “How” Our Company will Serve its Customers. How customers’ needs are satisfied? A company should define the means or technology by which it will serve the target market and satisfy the customer’s needs. By incorporating Who, What and How the firm will be perceived and act more customer & market-oriented. It will be perceived as a customer-satisfying entity, not a product-producing entity. (Kerin & Peterson, p.2.)

McDonald’s business mission is built around:

• serving a limited menu of hot, tasty food (what) quickly in a clean, friendly restaurant for a good value (how)
• to a broad base of fast-food customers worldwide (who).

The Mission Statement Fits the Current Market Environment Missions should fit the current market environment. (Kotler p.52) ” Girl Scouts would not recruit successfully in today’s environment with their former mission: “to prepare young girls for motherhood and wifely duties.”

The Mission Statement is Based on Our Competitive Advantage Competitive advantage arises from leveraging a firm’s unique skills and resources to implement value-creating strategy that competitors cannot implement as effectively. Your company should base its mission on a competitively superior internal strength or resource that the company performs well in comparison to its competitors.

The Mission Statement is Based on Our Distinctive Core Competencies. The organization should base its mission on its distinctive competencies. (Kotler p.52) A distinctive core competency is a competitively superior company resource that the company performs well in comparison to its competitors.(Thompson Strickland) It needs to stay focused on specific traits (i.e., quality, customer service) and on target or niche markets. McDonald’s core competence is providing low-cost food and fast service to large groups of customers.

The Mission Statement Motivates and Inspires Employee Commitment Mission statements should be motivating. It should not be stated as making more sales or profits. A company’s employees need to feel that their work is significant and that it contributes to people’s lives. Visionary companies set a purpose beyond making money. Even though profits may not be part of these companies’ mission statements, they are the inevitable results.(Kotler p.53).

A company that says its mission is to make a profit begs the question “What will we do to make a profit?” To understand a company’s direction, we must answer “to make a profit doing what and for whom?” (Thompson Strickland, p.29).

Focus on profit – IBM’s mission is “To become a $100 billion company by the end of the century.” Focus on motivating – Microsoft’s mission is “information at your fingertips.”

The Mission Statement is Realistic Mission statements should be realistic. The company should avoid making the mission too narrow or too broad. (Kotler p.50)

Southwest Airlines would be deluding itself if it adopted the mission to become the world’s largest airlines. Too broad – “providing society with superior products and service – innovations and solutions that satisfy customer needs and improve the quality of life.” Merck Too narrow – providing toys has proved too narrow a scope for Toys-R-Us

The Mission Statement is Specific, Short and Sharply Focused Mission statements should be specific. Vague or generic mission statements lack resonance and meaning. They won’t be remembered by anyone, and will likely be dismissed as too difficult to understand. Many mission statements are written for public relations purposes and lack specific, workable guidelines. It is a precise statement of purpose. (Kotler p.51)

Too general – “We want to become the leading company in this industry by producing the highest-quality products with the best service at the lowest prices.” Very specific – Celestial Seasonings’ mission statement is “Our mission is to grow and dominate the U.S. specialty tea market by exceeding consumer expectations with: The best tasting, 100% natural hot and iced teas, packaged with Celestial art and philosophy, creating the most valued tea experience.”

It should be memorable. Describe the essence of the business in words your employees and customers can remember you by. Peter Drucker says the mission should “fit on a T-shirt,” yet not be a slogan.. Don’t use the mission statement as an essay or a vehicle for abstract philosophy. Words should be chosen for their meaning rather than beauty, for clarity over cleverness. The best mission statements are plan speech with no technical jargon and no adornments.

International Red Cross – “To serve the most vulnerable”

The Mission Statement is Clear and Easily Understood. Develop your mission statement to a “party level.” A simple, clear, “party level” mission statement can be used to tell people you meet at a party or on airplanes why your company exists. At the same time it needs to give your company team as a profoundly simple focus for everything it does as a firm. (Bobb Beihl)

The Mission Statement says What We Want to be Remembered for. A mission statement says what, in the end, you want to be remembered for. It is actually an epitaph in present tense. What would you want your epitaph to read some day? Your ideal can provide a profoundly simple insight into your purpose for existing today. (Bobb Beihl)

To develop a mission statement at the corporate level the following steps are suggested: (Drucker)

1. Establish a mission-writing group The writing group must be able to identify the company’s reason for existing, the primary customer, and what the goals and results should be. Members should include the chief executive, the board chairman or another representative of the board, a writer, a manageable number of additional members who represent different parts of the organization, and a facilitator.

2. Adopt criteria for an effective mission statement. Gather ideas and suggestions for first drafts. The writing group should adopt the criteria they will use to judge the effectiveness of the mission they are about to develop. Following the adoption of criteria, the group moves on to ideas and suggestions for the mission statement. Idea-generating techniques include:

• Open brainstorming: any thought or idea is welcome.
• Each group member finishes the sentence, “The mission should be…”
• Small teams “complete” in a very short time span to draft and nominate the “best” new mission statement
• Go around the group two or three times asking for the one word that must be in the mission statement.
• Each person quickly draws a picture of the mission, then “shows and tells.”

To conclude the exercise, the group:

• Posts and reviews all ideas and suggestions. The facilitator draws a circle around the words or phrases that appear most often.
• Discusses key ideas or themes the must be captured in the new statement.
• Discusses key ideas or themes that must not be part of the new mission statement.

3. Develop one or more draft statements. The writers along or with a small group develops drafts of at least two possible new mission statements.

4. Judge initial drafts against criteria and suggest revisions or new options. To judge drafts and make suggestions:

• The groups reviews the criteria for an effective mission statement.
• The first draft statement is posted in front of the group.
• Group members individually rate the draft for each criteria using the worksheet.
• The facilitator polls and records the group’s response for each criteria to determine the overall strengths and we4aknesses of the draft.
• The group discusses the merits of the draft and makes specific suggestions for how it might be improved. All suggestions are encouraged and recorded.
• The second draft statement is posted and steps are repeated.
• The facilitator instructs each group member to individually write their recommended mission statement. Members read their statement aloud, and give it to the writer.
• The group discusses whether it has developed an effective statement or whether the writer should develop a second set of drafts.

5. Develop second drafts. The writer or small subgroup develops a second draft of one or more possible new mission statements.

6. Gain feedback from outside the writing groups. The board chairman and chief executive decide who outside the writing group will be asked to give feedback. This may includes organization wide input or a few key people inside or outside the organization. Each individual group being contacted for their response is:

• Shown the criteria for an effective mission statement.
• Asked for a rating of each draft, based on the criteria.
• Asked for comments on the merits and weaknesses of the draft(s).
• Asked for ideas or recommendations for improvement.

7. Summarize feedback and distribute second drafts and summary to writing group.

8. Propose a draft mission statement. The writing group meets:

• Reviews the second draft(s).
• Discusses a summary of feedback from outside the writing group.
• Rates the draft(s) against criteria and cites merits and weaknesses
• Attempts group editing or rewriting.
• Approves its proposed mission statement..

9. Presents the proposed mission statement for board approval.

Mission Statements for Functional Departments

There is a place for mission statements for key functions (R&D, marketing, finance) and support units (human resources, training, information systems). Every department can benefit from a consensus statement spelling out its contribution to the company mission, its principal role and activities, and the direction it needs to be moving. The following are some examples: (Thompson Strickland, p.33)

• The mission of the human resources department is to contribute to organizational success by developing effective leaders, creating high-performance teams, and maximizing the potential of individuals.
• The mission of corporate security is to provide services for the protection of corporate personnel and assets through preventives measures and investigations.

Shaped by five elements: 1. Its history – do not depart too radically from past. 2. Current preferences of owners and management. 3. Market environment. 4. Its resources. 5. Core competencies. CRITICAL

How to Write a Mission Statement – Agency Management

Defining an organizations mission statement is a fundamental aspect of beginning strategic planning. Miss-representing the company’s mission can lead to strategic plans that do not complement the company’s purpose and reason for being. The article by Radtke (1998) takes a very simple three-step approach to writing a mission statement. Several examples of mission statements from other organizations are presented, and the article concludes with seven simple points that define the goal of a mission statement. These last seven points can provide even the most novice planner with a useful set of rules to get started on the right track for creating a valuable mission statement.

The Coca-Cola Company

The Coca-Cola Company exists to benefit and refresh everyone who is touched by our business.

Home Depot

The Home Depot is in the home improvement business and our goal is to provide the highest level of service, the broadest selection of products and the most competitive prices. We are a values-driven company and our eight core values include the following:

• Excellent customer service
• Taking care of our people
• Giving back
• Doing the “right” thing
• Creating shareholder value
• Respect for all people
• Entrepreneurial spirit
• Building strong relationships

The Boeing Company, Africa Division

Our mission is to establish a powerful presence and positive image of The Boeing Company with governments, businesses, and community leaders.

Nike

Our mission is to bring inspiration and innovation to every athlete* in the world. *If you have a body, you are an athlete.

Bechtel Corporation

To be the world’s premier engineering, construction and project management company.

Unisource – Forestry & Wood Products

Our mission is to serve our targeted customers with the highest level of integrity and satisfaction bringing solutions that improve business operations and reduce total operating expense. We will fulfill our mission through the mutual satisfaction of the needs of our customers, employees and investors.

Publix

Our Mission at Publix is to be the premier quality food retailer in the world.

Pfizer – Pharmaceuticals

We will become the world’s most valued company to patients, customers, colleagues, investors, business partners and the communities where we work and live.

AVEDA

Our mission at Aveda is to care for the world we live in, from the products we make to the ways in which we give back to society. At Aveda, we strive to set an example for environmental leadership and responsibility, not just in the word of beauty, but around the world.

General Motors

We are working to create an environment that naturally enables GM employees, suppliers, dealers and communities to fully contribute in the pursuit of total customer enthusiasm.

LaserMonk

LaserMonks’ mission is to provide monetary savings and a rewarding purchasing experience for businesses, educational and medical institutions, religious organizations, and individuals by offering premium quality imaging products based on low cost and honest service. Consequently, this mission also provides support for charitable causes around the world.

Leaf Paper – Paper Industry

The mission of New Leaf Paper is to be the leading national source for environmentally responsible, economically sound paper. We supply paper with the greatest environmental benefit while meeting the business needs of our customers. Our goal is to inspire, through our success, a fundamental shift toward environmental responsibility in the paper industry.

Latino Public

Broadcasting Latino Public Broadcasting supports the development, production, acquisition and distribution of non-commercial educational and cultural television that is representative of Latino people, or addresses issues of particular interest to Latino Americans. These programs are produced for dissemination to the public broadcasting stations and other public telecommunication entities. By acting as minority consortium, LPB provides a voice to the diverse Latino community throughout the United States.

Seventh Generation

Seventh Generation is the nation’s leading brand of non-toxic and environmentally safe household products.

Integrated Medical Systems

Integrated Medical Systems is an independent service organization for the healthcare market. We provide equipment-renewal services, Proactive Maintenance™, education and consultation for over 1,500 different types of equipment and accessories, including flexible scopes, rigid scopes, power equipment, video cart systems and surgical equipment. When you choose IMS as your service provider for medical equipment, we will change the way you think about service. You will experience the freedom and confidence that comes from IMS taking care of all the details behind the scenes – details you once had to handle yourself.

Axiom – groundbreaking legal services firm

Dedicated to a simple principle: the best talent and the best service without unnecessary costs. Whether you’re looking for an outside solution for an important transaction or a great attorney to round out your team on a flexible basis, we’re the smart alternative that wasn’t there before.

UTStarcom – global leader in IP access infrastructure products

Enable service providers to deliver high-quality, affordable voice, data and video services in both emerging and established telecommunications markets. The company designs, develops and markets carrier-class wireline, wireless, optical and switching systems that are crucial to the cost-effective expansion of next-generation telecom networks. Service providers can deploy UTStarcom’s solutions to deliver high-margin access services using their existing infrastructure, while enabling a smooth migration to highly efficient integrated IP networks. The company’s global customer support and professional service organization ensures customer satisfaction after the sale. UTStarcom has built a sustainable competitive track record through continued innovation in IP access technology, leveraging its success in China to capitalize on other high-growth markets worldwide, and delivering consistently strong, high-quality financial results.

University of Phoenix

The mission of University of Phoenix is to educate working adults to develop the knowledge and skills that will enable them to achieve their professional goals, improve the productivity of their organizations, and provide leadership and service to their communities.

Winn Dixie – Food Distributor

Honest and ethical conduct; accurate and timely disclosures and financial records; and compliance with applicable governmental rules and regulations are essential to obtaining and maintaining the trust of our shareholders, associates, consumers, vendors and the public at large. We are committed to acting with integrity and to conducting our business in compliance with applicable law.

American Standard Company-Wide Values (Air Conditioning Systems and Services, Bath & Kitchen Products and Vehicle Control Systems.)

American Standard’s mission is to “be the best in the eyes of our customers, employees and shareholders.”

The Clorox Company

The mission of The Clorox Company Foundation is to improve the quality of life in communities where Clorox employees live and work. Community involvement is an integral part of our business and is carried out through a program of grant-making, volunteerism and leadership in community service.

Hershey Foods

Our mission is to be a focused food company in North America, and selected international markets, and a leader in every aspect of our business. Our goal is to enhance our #1 position in the North American confectionery market, to be the leader in U.S. chocolate-related grocery products, and to build leadership positions in selected international markets.

John Deere

Double and Double Again the John Deere Experience of Genuine Value for Employees, Customers and Shareholders.

Run Smart – Think like an inventor, being first in creating smart and innovative customer solutions through machines, service and concepts.

Run Fast – Think like a customer, pursuing rapid expansion of our global customer coverage on the farmsite, worksite and homesite.

Run Lean – Think like an investor, driving financial returns higher by maximizing employee performance, achieving global cost leadership, reducing asset intensity, and creating profitable global preeminence through acquisitions, strategic alliances, and e-business.

Dow – Chemicals

To constantly improve what is essential to human progress by mastering science and technology. The Mission Statement can be broken into three components:

• Constantly Improve – This concept is bedrock to Dow’s culture and has been since H.H. Dow first said, “If you can’t do it better, why do it?” It underscores our drive to become an ever better and bigger company.
• Essential to Human Progress – The products we make find their way into products that provide people the world over with improved lifestyles. All of us at Dow must understand and take pride in this. We must also use this concept to further connect Dow with the external markets we serve. When we think in terms of the markets we serve, we become more outside-in focused and we can better seek growth opportunities.
• Mastering Science and Technology – We must put our science and technology to work to create solutions for our customers and for society.

FPL Group (Florida Power & Light Co., FPL Energy & FPL Fibernet, LLC)

Quality and corporate vision – Quality is one of several areas of focus FPL is pursuing to achieve its corporate vision: “We will be the preferred provider of safe, reliable, cost-effective products and services that satisfy the electricity related needs of all our customer segments.” The other focus areas are: safety, cost, customer orientation, speed and flexibility, growth and commercial skills.

CVS – Retail

Our company’s vision is to help people live longer, healthier and happier lives. An integral part of this vision is our investment in the communities we serve. The primary focus of our programs is health and education, two natural extensions of our company’s goals.

Black & Veatch – Engineering, Construction

Black & Veatch is Building a World of Difference by challenging the frontiers of knowledge to provide energy, water, information and other vital infrastructure for a better world.

WellPoint – Health Care Co.

The WellPoint Companies provide health security by offering a choice of quality branded health and related financial services designed to meet the changing expectations of individuals, families and their sponsors throughout a lifelong relationship.

Perdue – Food Service

Meeting and exceeding your expectations is a tradition at Perdue Farms, one of the nation’s largest poultry processors. Our mission is to provide solutions to our customers and users of our products that are profitable for them, and for us. For over 80 years, we have been driven by one goal, that our company be known for quality that is uncompromising and without end. Heritage, Experience, Leadership. That’s the Perdue difference.

Booz Allen

Hamilton Booz Allen Hamilton develops, supports and delivers comprehensive Intelligent Transportation System (ITS) services to federal, state, local, commercial and international clients. Our services encompass all areas of ITS planning, procurement and deployment with the aim of maximizing the value of our clients’ programs.

TXU – Energy & Gas

The mission of TXU is to be the most admired international energy services company.

Burlington Resources – Oil & Natural Gas Exploration

We will build long-term shareholder value through competitive returns and profitable growth.

Reliant Resources – Electricity

How we work:

• Creating value for every customer
• Ensuring a safe, healthy and enjoyable workplace
• Caring for our environment and communities

AVON – Household & Personal Products

Our vision is to be the best company that best understands and satisfies the product, the service and the self-fulfillment needs of women globally. Our dedication to supporting women that touches not only beauty – but health, fitness, self-empowerment and financial independence.

Marriott International – Entertainment & Information

Core Values: The “Marriott Way” is built on fundamental ideals of service to associates, customers and community. These ideals serve as the cornerstone for all Marriott associates fulfilling the “Spirit to Serve.”

Family Dollar – Retailing

For Our Customers – A compelling place to shop, by providing convenience and low prices. For Our Associates – A compelling place to work, by providing exceptional opportunities and rewards for achievement. For Our Investors – A compelling place to invest, by providing outstanding returns.

Rite Aid – Retailing

The mission of Rite Aid is to be a successful chain of friendly, neighborhood drugstores. Our knowledgeable, caring associates work together to provide a superior pharmacy experience, and offer everyday products and services that help our valued customers lead healthier, happier lives

Ingram Micro – Computers & Electronics

Ingram Micro will be universally regarded as the best way to deliver technology to the world. To help our business partners grow and be more profitable, while maximizing value for our shareowners, by:

• Broadening the reach of our business partners, connecting them with new markets, technologies and solutions
• Earning the respect and loyalty of our business partners through superior value and service.
• Creating innovative ideas through bright, energetic, customer-focused and talented people

Sunoco – Energy

Sunoco’s goal is to be a source of excellence for our customers; to provide a challenging professional experience for our employees; to be a rewarding investment for our shareholders; to be a respected citizen of community and country.

ECOLAB – Business Services

Culture Statement:

Spirit Ecolab associates are the company’s heart and soul. Hungry to succeed and passionate to achieve, we embrace the unknown, fearlessly taking risks, confident in our ability to deliver results. We are eager and ambitious. We tenaciously persevere, surmounting obstacles with grit and determination. Above all, we find joy in our work, and in serving the company and our customers.

Pride Exceptional service, exceptional products…We delight in presenting premium quality in all we offer. No matter how big the project, or how small the request, we strive for excellence in our response, for we relish perfection. We cherish our company, and represent it with honor.

Determination Ambitious and aggressive, driven and determined, enthusiastic and energetic, we cultivate the opportunity to compete. We thrive on challenges, viewing them as an invitation to success. A true team, we work together to routinely please our customers, surpass our record achievements, and drive our organization to greater success.

Commitment Like a family, we are united by an unspoken pledge, bound by our convictions. We prize dedication, and are moved to help each other and our customers. We accept nothing less than loyalty in our ranks. We are true to each other and to our cause.

Passion We wholeheartedly believe in our company; its goals and objectives are our mission, and we enthusiastically embrace them and relentlessly pursue them. More importantly, we truly believe in each other, care, protect and support each other.

Integrity Professional. Reliable. Trustworthy. Honest. Our corporate integrity is a critical asset and we are committed to upholding it worldwide. We set high standards, and we abide by them as we practice business fairly and behave ethically. We share our expectations with each other and strive to maintain a workplace built on mutual values, trust and goodwill.

EQUIFAX – Business Services

To serve our customers by utilizing information and technology that provide real-time answers to increasingly complex questions.

United Stationers

United Stationers mission is to enable our customers to sell and deliver the best selection of products in the most efficient, reliable, user-friendly way possible by always making decisions based on asking, “If I were the customer…”

The City of Windsor, Canada

“The City of Windsor, with the involvement of its citizens, will deliver effective and responsive municipal services, and will mobilize innovative community partnerships.”

New Jersey State Board of Education

The New Jersey State Board of Education, in collaboration with the Department of Education, establishes policy and provides leadership in the development of exceptional learning opportunities for New Jersey’s public school students for the purpose of enabling them to obtain a superior education.

Oklahoma State Bar Association

The mission of the Oklahoma Bar Association is to enable OBA members to provide excellent legal services to the community in an ethical, professional and civil manner. The vision of the Oklahoma Bar Association is that all people shall have access to and full benefit of the rule of law and the system of justice in Oklahoma. United States Naval Academy Mission The strategic planning process reaffirmed the validity of the Naval Academy Mission and the core values it represents. The Mission provides the grounding for the Vision. The Mission: To develop midshipmen morally, mentally and physically and to imbue them with the highest ideals of duty, honor and loyalty in order to provide graduates who are dedicated to a career of naval service and have potential for future development in mind and character to assume the highest responsibilities of command, citizenship and government. The Vision: Provide leaders of great character, competence, vision and drive to transform the Navy and Marine Corps and serve the nation in a century of promise and uncertainty.

Toastmasters International

Toastmasters International empowers people to achieve their full potential and realize their dreams. Through our member clubs, people throughout the world can improve their communication and leadership skills, and find the courage to change. Toastmasters International is the leading movement devoted to making effective oral communication a worldwide reality. Through its member Clubs, Toastmasters International helps men and women learn the arts of speaking, listening and thinking – vital skills that promote self-actualization, enhance leadership, foster human understanding, and contribute to the betterment of mankind. It is basic to this mission that Toastmasters International continually expand its worldwide network of Clubs, thereby offering ever-greater numbers of people the opportunity to benefit from its programs.

The Medical Library Association

The Medical Library Association (MLA) believes that quality information is essential for improved health. To that end, MLA aspires to be the association of the most visible, valued, and trusted health information experts, fostering excellence in the professional achievement and leadership of health sciences library and information professionals to enhance the quality of healthcare, education and research throughout the world.

Rotary International

The mission of Rotary International is to support its member clubs in fulfilling the Object of Rotary by:

• Fostering unity among member clubs
• Strengthening and expanding Rotary around the world
• Communicating worldwide the work of Rotary
• Providing a system of international administration.

The Marine Stewardship Council

To safeguard the world’s seafood supply by promoting the best environmental choice. The Marine Stewardship Council (MSC) is an independent, global, non-profit organization. It works to enhance responsible management of seafood resources, to ensure the sustainability of global fish stocks and the health of the marine ecosystem. It is supported by a broad coalition of those with a stake in the future of the global seafood supply. The MSC harnesses consumer power by identifying sustainable seafood products through an eco-label.

The New Jersey Section of the American Water Works Association

The New Jersey Section of the American Water Works Association (NJAWWA) is dedicated to the promotion of public health and welfare in the provision of drinking water of unquestionable quality and sufficient quantity. NJAWWA must be pro-active and effective in advancing the technology, science, management and government policies relative to the stewardship of water. NJAWWA will be the leading force in New Jersey dedicated to safe drinking water.

Marketing Regional Victoria

Over the life of the plan more Australians and international visitors will be aware of and visit destinations in regional Victoria. This will contribute to increased tourism yield, greater dispersal of visitors and economic, social and environmental benefits to regional communities.

Heinz

Our vision is to be “the world’s premier food company, offering nutritious, superior tasting foods to people everywhere.” Being the premier food company does not mean being the biggest but it does mean being the best in terms of consumer value, customer service, employee talent and consistent and predictable growth. We are well on our way to realizing this vision but there is more we must do to fully achieve it.

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• Retaining existing customers is cheaper than acquiring new ones.
• Eighty percent of your business comes from 20 percent of your customer base.
• The best new business is referral business.

It’s clear that keeping customers and developing customer loyalty brings remarkable value to a company. Certainly, it is one of the primary reasons behind any firm’s success. And most all owners and employees know customers are one of your most valuable assets. But just how valuable are your customers? According to a 1994 Harvard Business Review study, Putting the Service-Profit Chain to Work, found “an increase of 5% in customer loyalty can increase profitability by 25-80%.”

While this statistic emphasizes the importance of customer loyalty, it is even more helpful to understand exactly how much a customer is worth to you now. This is also called the “Lifetime Value of a Customer.” There are numerous ways to calculate the lifetime value of a customer to a company. No matter the measure, producing a concrete dollar figure gives you a tangible point around which to design customer retention strategies, promotional campaigns, and even bonus plans. (Note: The following calculation does not determine profit, rather the overall customer value.)

Here’s a quick way to determine the lifetime value of your customers. The box to the right corresponds with explanation below.

1. What is your average sale or average amount of money a customer spends per month? (Simply add up your total dollar sales for a year and divide that by the total number of sales transactions you completed.)
2. How many times a year does an average customer buy from you? (Take your total number of sales transactions for a year and divide it by the total number of customers.)
3. What is the expected number of years a customer will use your services or buy your products?
4. How many people per year does your average customer tell about your company? (You may have to guess at this one. It’s probably between 3 and 12. Generally, the better your customer service, the higher this number will be.)
5. What percentage of these people actually become customers? (Usually between 20% and 70%.)

Let’s apply this calculation to a local personal coaching business. If each coaching session is $150 and the average customer has two sessions a month, the gross sales per customer is $3,600 per year. Estimating that a customer stays with their person coach on average for five years, the lifetime value of this customer, before referrals, is $18,000. Customers that are seeing results from personal coaching will more than likely tell their friends. The power of positive word of mouth magnifies the value of each customer. If we conservatively estimate that each customer tells four people and 50%, or two, become customers, the gross sales from referrals is $36,000. Therefore, the total lifetime value of a customer is $54,000 (the gross sales per customer plus gross sales from referrals)!

Now, do the exercise in the box. Find out for yourself just how much money each of your customers is worth to you.

The outcome of this calculation represents a relatively accurate estimation of your customer’s value to your company over the course of the customer’s lifetime. No wonder it is so important for employees to understand the value of each customer! Clearly, customer retention should be among any firm’s most important priorities. But success doesn’t occur in a vacuum. Rather, strong customer retention rates result from customer satisfaction. This, in turn, results from the firm’s continuous ability to provide value at all contact points with the customer. When you have satisfied customers, you will also have a strong referral base. The impact of positive word mouth has a multiplying effect in this calculation and also in the marketplace. When designing long-term strategies or assessing the cost of losing customers, this equation can provide a sobering illustration of the results of your efforts. Keep this number in mind when you’re dealing with disgruntled customers or trying to decide your daily priorities. Do everything you can to create loyal customers!

Erica Olsen (Erica@m3planning.com) is a principal of M3 Planning, which helps companies build market-focused cultures through customer-driven strategic planning, empirical market research, and measurable marketing approaches. Her company launched MyStrategicPlan.com, an web-based strategic planning site for small and medium businesses. She is also an instructor and a writer.

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