Regardless of all the different definitions out there, the most important thing is that everyone within your organization agrees on a common definition and understanding of what these terms mean to you if you have any hope of being successful.
To that end, here’s how I define and use these terms. To me, these terms represent three levels of your strategic plan, and each level supports and accomplishes the one above.
Top Level – Vision vs Mission
Vision and mission are high-level, “north-star” statements. Unless your business radically changes what it does, these statements won’t change. They should be broad enough to not easily be made obsolete or moot. These are forward-looking and the timeframe is an undermined point in the future.
- Vision is your organization’s inspirational and aspirational picture of the future, it’s your ‘Why’. Why do you exist, why do you do any of the things you do? Your “Elevage Digital” is the best version of the future that you can bring about. Start by getting really clear on your vision before moving on to the next level.
- Mission is the defining purpose of your organization. It is the “how” to your vision’s “why”. For some businesses, vision and mission may be combined into one statement.
As an example, these could be the vision and mission of a hypothetical winery:
- Vision – Bring enjoyment to others through wine
- Mission – Make exceptional wine
Middle Level – Strategy vs Goals
Your SMARTEST Goal and Strategy make up the middle level which represents how you want to accomplish your Vision and Mission. At this level, details start to get a bit more specific.
- A SMARTEST Goal is the big thing you plan to achieve that is in direct alignment with your vision and mission. My definition of “SMARTEST” stands for
- Strategic – something worth doing and of value to your customers
- Measurable – quantifiable more than subjective
- Actionable/Achievable – make sure it can be done
- Relevant – the goal needs to directly relate to achieving your vision
- Time-bound – typically 3-10 years
- Exciting – for both your employees and your customers; make people feel like they are part of something bigger
- Shared – your employees need to know what the goal is and how they play a part in achieving it
- Tuned-up – periodically, make sure your goal is still relevant, of value, and that people are still excited by it. If not, make the necessary adjustments
- Your Strategy is the general plan, approach, or method for how to achieve your goal. Your strategy may include details about the customers you plan to target and the geographic areas you intend to focus on (a specific state, country, or the whole world?). Your strategy should include a consideration of what choices you intend to make – choosing to follow one course of action means specifically not following a different path. What will you do differently than your competition? What activities won’t you worry about to focus on what is most important?
Your strategy needs to be somewhat flexible to accommodate changes in the world and business environment. Your organization’s structure should be built around your strategy and what needs to be accomplished. Focus on the skills and capabilities that you need, not the individual employees you currently have.
The middle level for our hypothetical winery may look like this:
- Smartest Goal – Within 10 years, earn a 100-point score from Wine Spectator for our flagship wine
- Strategy – Refine vineyard and winery process to improve quality; hire a new Director of Wine Operations; regularly submit wines for review to multiple sources to get feedback
Bottom Level – Objectives vs Tactics
The bottom level is the base upon which the other layers rest. This is the work!
- Objectives are the yearly and quarterly steps you will take towards achieving your goals – objectives move a strategy forward. Setting both yearly and quarterly objectives allows you to focus on the most important things that need to happen while being flexible so you can adapt to the changing environment. In my experience, I prefer to have one objective per business function (i.e. Sales/Marketing, Production, Admin/Operations) per time period. The more objectives, the less focus you have.
- Tactics (also called key results, tasks, or action items) are the concrete things that you will do to accomplish an objective. These should be measurable in a way that it is 100% clear if the action is complete.
Back to our hypothetical winery, they could have objectives and tactics that look like this
- Objectives – Year 1: Improve vineyard materials and vineyard management processes
- Tactics – Determine the best clone to use for our specific terroir; implement new vine training and pruning techniques to optimize ripeness and grape chemistry
Lastly, I’ll throw in one more term that should be considered as it permeates throughout all of the layers (especially the middle and bottom).
- Issues are all of the problems, challenges, roadblocks, and opportunities that need to be considered and addressed to keep moving forward. The most common issues are people issues and process issues. You may also run into material and supply chain issues, new competitors, changes in customer attitudes and demands, changes in technology, and global pandemics. Part of your process for setting and reviewing goals and objectives needs to include dealing with issues. Every business has them, and the most successful businesses deal with them head-on.