The corporate strategy establishes the purpose and scope of the company. Its definition includes two momentous decisions. The first has to do with the Mission of the Company and the second, with the Definition of the Business to which the company is dedicated.
When deciding the mission of the company, the result is a statement that most of the time seems, in addition to an unattainable dream, something to which every company would be obliged.
As a bad example, let's take this first statement from a real company:
Achieve and consistently exceed the expectations of our customers and their customers, better than any other provider on the market.
Dr. Russell Ackoff in his book 'Management in small doses' (Wiley, 1989) proposes that to have value, a company's mission statement must assert something with which it can reasonably disagree.
It's a disturbing proposition because it forces shareholders to make decisions, to choose things that they would be willing to do and things that they would have to leave out, at least for a while. Also disturbing because it leads us to consider that the mission statement must be temporary, even if it is formulated for the long term.
This second example reflects a decision making that establishes the purpose and scope of an insurance company:
Satisfy the protection, financial forecast and health service needs of Mexican society.
GNP will become the most profitable and efficient institution in the country in Insurance, Pensions and Health Services.
Beyond what can be immediately perceived as the good and the bad of these two statements, it is valid to ask what, then, are the characteristics that the company's mission statement should have?
Ackoff raises five essential characteristics for the mission statement to have value.
- The first one means that the adoption of a mission must change the behavior of the company that states it:
It should contain a formulation of the objectives of the company, in such a way that the progress in that sense can be measured.
- The second requires establishing individually, or uniquely, what the company wants; not what most companies want:
It must differentiate it from other companies.
- The third involves finding a unifying concept that broadens the vision that the company has of itself and approaches it correctly:
It must define the business in which the company wants to be, and not necessarily the one in which it is already.
- The fourth, leads to establishing how the company intends to serve its customers and suppliers, the general public, shareholders and employees:
It must be meaningful to all participants in the company.
- The fifth characteristic of the mission statement is that it must motivate all those whose participation is required:
It should be uplifting and inspiring.
A third example clearly shows the achievement of these characteristics in a mission statement:
Offer the producers of audiovisual material in the city of Monterrey, technological innovation with a philosophy of service, installing and making available the most modern equipment and the most qualified personnel, without the need to invest in them.
Adding value to the audiovisual production activity, raising the quality of local production until Monterrey is considered an excellent option, and offering a high-level work environment that improves the image of the local producer in dealing with their clients.
The best proof that the mission statement has value is that the company changes as a result of what is established in it. If nothing happens the next day or in the following years, it means that the mission of the company is different.
Once its mission is defined, the company must then clearly define the business to which it will be dedicated.
Companies are traditionally inclined to define their business with reference to products and / or markets. However, although the product or service is the company before customers, in strategic terms neither the customers nor the product or service strategically define a company.
The product or service that a company offers is the result of a specific technology and represents for its clients a solution to problems or a satisfaction of needs; generally speaking, it represents a benefit to them.
These three dimensions of business definition change at different rates over time and all three are essential to define the company's performance in the short, medium and long term.
Consequently, the business of the company must be defined on the basis of:
1. A Solution Technology that shapes the products and services it offers.
2. One or more customer segments that you want to serve.
3. A clear set of Benefits offered to those customers, through their technology.
This business definition of the audiovisual material production company allows us to see how it integrates with the mission of the company to clearly establish its corporate strategy.
Provide equipment, personnel and facilities for the production and post-production of audiovisual material, with advanced technology, talent to handle it creatively and adequate facilities. (Technology)
To current and future producers of audiovisual programs, mass media, advertisers and other users of audiovisual material. (Segments)
Allowing them to produce high quality audiovisual programs, in a suitable environment, without the need to invest and with the advantage of the location in Monterrey. (Benefits)
The truly significant point of this exercise is that the corporate strategy will be better, that is, it will be better established and will lead more easily to good results, to the extent that it is linked to the business definition dimensions, which, in turn, fit with the marketing strategy; that is, with decisions on market segmentation, product differentiation and brand positioning.
This is the best proof that the market approach is the business philosophy that most ensures in the long term that a company will obtain successful results.
