We would argue that one of the biggest reasons organizations are so complex is because we have a hard time just agreeing on terminology. Communication is a key to organizational health and prosperity. And, in order to communicate effectively, executives need to have the same understanding of the words that are being used. While there are numerous words and definitions we could discuss, we are going to start at the top and define some terms that arguably have the biggest impact on guiding organizations.
Vision – a vision is a statement of what you would like to become. It should be enduring and an ultimate stretch goal – most likely something that will never be attained. (i.e., We strive to be the world’s best supplier of XXXX)
Mission – a mission is a statement of how we will accomplish our vision. It should include a summary of core competencies and competitive differentiation. (i.e., We supply the best XXXX with unique capabilities in XXXXX to deliver superior value to our customers)
Purpose – a purpose is a statement of why we exist/reason for being – think self-actualization for an organization. It should energize stakeholders to focus on something greater than oneself. (i.e., We exist to help our customers be better at XXXXXX)
Strategy –a strategy is a plan to beat the competition to achieve your Vision and Mission and Purpose. It is what you are going to do to dominate your market/segment through competitive positioning and value chain optimization. Research shows that it takes 3-5 years for a real strategy to start to take hold so it changes very little. If you are talking strategies (plural), you are not focused on strategy you are focused on tactics. (i.e., Walmart – Strategy=Low Price (“everyday low prices”))
Tactics – Tactics are specific actions that you will take to implement the strategy. It is how you are going to do it – M&A, people, process, technology, etc. Tactics are actions taken by everyone in the organization and should be aligned with and focused on strategy. Tactics are many and will change periodically as improvements take place and market dynamics change. (i.e., Walmart – a couple of the tactics used to deliver the Low Price Strategy are global sourcing to find the best product at the best price and scale to negotiate the lowest cost).