Strategy terms you should know, but you are embarrassed to ask

Sometimes strategy looks more like a diffuse ideal than like a clear and concrete plan because the complexity of expressing such a broad idea. To be able to both explain and understand any given strategy there are some terms that should be clearly defined to ensure that everybody is talking about the same thing. I found a very useful explanation in a book called “Exploring Corporate Strategy” by Johnson, Scholes and Whittington, which I will use as a basis for this post because I liked the proposal and I think it is clear enough to be used as a solid start.

I put the terms together in 5 groups, which are shown in figure 1 below. They serve as well as a great check-list to define a strategy because all of them together complement each other to form a pretty complete strategic proposal.

Figure 1: Strategy proposal groups

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To explain every term, I will talk about projects, but remember that this can be used for anything else. It could be from a small project to a whole company… whatever you need, just change the word “project” for whatever you are designing your strategy for. To support the explanation, I will add the example I found in the book I mentioned before: Improving fitness.

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Who am I?

1.- Mission

This is the purpose of the project, what we want to achieve. For a company, it should define “what business are we in”. It has to be totally aligned with the values and limited by the scope and boundaries of the project definition. This must satisfy the stakeholders’ expectations and motivate both employees and customers to be part of it.

  • Question: What is our greatest end?
  • Review frequency: It should be a medium-long term definition (i.e. 5-10 years), unless a change of paradigm is needed.
  • Example: Be healthy and fit

2.- Vision (strategic intend)

It is an aspiration or the desired future state. The way I see it, is as clear image of how we want our project to look like. It has to be so clear, that we should be able to represent it in a picture, hang it on the wall and look at it in each decision to make the choices that will only take us closer to that vision. That vision will be the focus of the strategy and the efforts of all the stakeholders involved.

  • Question: How will it look when it reaches perfection?
  • Review frequency: The same as the mission, it should be a medium-long term definition (i.e. 5-10 years), unless a change of paradigm is needed.
  • Example: Run a marathon

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Where should I start (or where am I going)?

3.- Goal(s)

It is the general aim of the project which has to be aligned with the mission (purpose). It will be a qualitative and maybe general target to pursuit which will take us closer to our vision. They might be more than one and they set the priorities and focus when tradeoffs have to be made, which might as well change with time. Hence, setting the right goals in the right order will take us to reach our vision and accomplish our mission.

  • Question: What should we accomplish now to get closer to your vision?
  • Review frequency: Goals can be changed as often as needed triggered by either deadlines or completion. In a company it could be every quarter, in a project or department maybe even every month or week.
  • Example: Lose weight and strengthen muscles

4.- Objective(s)

It is a quantification of the goal which will give a clear idea about how does “good” look like.

  • Question: Talking about our goal, how does “good” looks like? (numbers and dates!)
  • Review frequency: Most likely it will change with the goal, but sometimes it could change more often representing stages or phases of a wide goal.
  • Example: Lose 5Kg by September 1 and run the marathon next year

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What do I have to achieve it?

5.- Strategic capability

This one is the resources and competences that you have (or need) to reach goals and objectives towards your vision and mission. If they are unique they become competitive advantages and are the tools you will use to add value and differentiate from competitors.

  • Question: What do we have to reach our goals (or objectives) better? Is it unique?
  • Review frequency: These might change with goals as well, but many of them will stay constant on a longer term if mission and vision do not change. However, they must be reviewed with a some frequency considering competition and customer behaviours.
  • Example: Proximity to a fitness centre, successful diet

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How do I achieve it?

6.- Strategies

This one is about the long-term direction of the team or organisation and the actions to be taken. It is the result of putting together the previous questions generating a conceptual plan on: how to use the strategic capabilities to meet the objectives and goals which will take us to our vision and achieve our mission. Like in chess, you will have to plan the steps to follow, their sequence, the needed resources, the expected response of both competitors and customers and contingency plans if something does not go as expected. Strategy is the plan to reach the vision which may comprise the sequence of many different goals and objectives and the plan to make them work in that sequence.

  • Question: What plan should we follow?
  • Review frequency: Strategy should be revisited at least once a year, considering changes in competitive landscape, customer behaviour and/or our strategic capabilities.
  • Example: Exercise regularly, compete in half marathons, stick to the diet.

7.- Business Model -> How do I achieve it?

It is the flow of the activities between the participating parties and their roles and responsibilities. It describes the structure of the product (or service) as well as the activities and information flows. The business model is the materialisation of the strategy in a clear operation plan to use the current strategic capabilities to meet the objectives and goals which will take us to our vision and achieve our mission.

  • Question: How do we execute the plan?
  • Review frequency: Business model is a long-term definition, and might only change if the long-term strategy changes. Therefore, it should be revisited once a year and be aware that big changes might be painful.
  • Example: Join a running club

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Am I doing it right?

8.- Control

It is the monitoring to define whether the strategy is right to achieve the goals and objectives. It defines effectiveness and might suggest opportunities of improvement.

  • Question: How can we know if we are doing the right thing?
  • Review frequency: This one depends a lot on the life cycle of the goals, objectives and strategy. Some of them will need close monitoring and some of them will need some time to show any kind of response.
  • Example: Monitor weight, km run, times. Consider other strategies if the progress is not satisfactory.

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This is a combination of the definitions in the literature I mentioned before and my own perspective, however it is important to clarify that there is no standard or official definition or boundaries between terms. Most of the time, each organization or person uses them according to subjective definitions. That is the reason why I strongly recommend to clarify them before starting any discussion based on them.

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