It has been a good morning. After a nice walk through the Bukit Kiara Forest Reserve with my wife, we drove over to our favourite noodle soup stall in Taman Tun for breakfast.
I have been strategically rehabilitating my taste buds since I came back. From the home cooked chicken rendang upon arrival to the fried tenggiri at Raju’s the next morning, recovery has been slow but fruitful. I am relearning how to enjoy my food once again, a bite at a time. Forever an optimist, I believe I just need another 10 meals before I attain full recovery.
After a nasi padang lunch of multiple dishes with my colleagues, I was drawn back to a lecture on strategy by Prof Cynthia Montgomery when she asked us whether we know the difference between Mission Statement, Company Values, Vision Statement and Strategy Statement.
The corporate boys from the big organisations were ecstatic. Like national anthems, they memorised each and every line of each and every kind of corporate statement and they sounded like they truly understood what they all mean. Meanwhile, I was lost and confused.
To a small entrepreneur like me, all the statements and visions can be combined into one. Like eating nasi campur without the curry. No clear idea, no understanding and no taste.
Without confusing you to death, I suggest you keep your life simple by just focusing on developing a Strategy Statement for your business and making sure it is a good one. Your statement should cover objective, scope and advantage.
Objective is the definition of the ends that the strategy is trying to achieve.
Scope is the domain of the business: the part of the landscape where the business will operate.
Advantage is your competitive advantage: what sets your business apart and what you will do differently from other competitors to achieve your objective.
As an exercise, let us try to define a Strategy Statement for National Feedlot Corporation (NFC) in not more than 35 words.
“We aim to replace 40% of beef imports into Malaysia through an integrated supply chain of local breeders and centralised meat processing to ensure consistent supply of fresh quality beef (at a lower price) to the rakyat.”
Since we need to squeeze the sentence into not more than 35 words, you can take out “(at a lower price).”
Anyway, on the strength of that Strategic Statement alone, any government in the world will gladly grant a RM250mil loan at 2% interest rate. And if the NFC had put those words into action, it would have benefited the company and the rakyat of the nation. Fresher less frozen beef and possibly at a lower price.
What if the NFC had to come up with a Mission Statement (Why we exist), Company Values (What we believe in and how we will behave), and Vision Statement (What we want to be)?
The existence of NFC must have originated from a brilliant analysis on beef supply. Notwithstanding the fact that cows bred in Malaysia tend to sweat in our tropical weather thus being less meaty compared with colder climate cows.
No comments on Company Values and Vision Statement as condominium ownership do not exactly fit into any of the statements.
Oh! I forgot to mention that the Hierarchy of Company Statements also include a Balanced Scorecard (How we will monitor and implement that plan). You be the judge.
For those of you who want to read more into the Hierarchy of Company Statements, the recommended reading is Can you say what your strategy is? by David J Collis and Michael G Rukstad, Harvard Business Review April 2008. It is a great article which if you understand will help you craft a great business plan with clear strategies that will serve as a guiding light throughout your corporation’s journey.
But if you have a simple mind like me, then a well worded Strategic Statement will suffice. With just a 35 word statement, you would have clarity as to the end point you want to achieve within a certain timeframe. You will also define the landscape in which you want your business to operate. Lastly, you will know what competitive advantage your business will have to help you achieve your objectives.
So, if you are starting a new business, try to put up a 35 word Strategy Statement on what your new business is all about. Words that will lead to action. But do spend more time to develop these few words that truly capture your strategy. Words that will energise and empower your people who will raise the long term financial performance of your organisation.
Writing so many words have made me hungry again. Should I have fresh Malaysian beef rendang or against my doctor’s advice, a full banana leaf meal? Suffering from jet lag and blurred vision, my food mission will have to be abandoned. I will head home for a simple meal of porridge with ikan bilis and salted eggs.