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Thoughtful strategic planning pays huge dividends for any organization that aspires to be healthy and enjoy sustainable growth. Clarity is essential. Everyone on your leadership team should be in alignment with your strategic direction. It’s hard enough to run a business even with everyone “on the same page.” It’s monumentally difficult and chaotic when words like “mission,” “vision” and “values” mean different things to different people.
Strategic planning pertains to being clear about who you are, what you do, who your customer is, where you are going, how you will get there, and when you will get there. With clarity around these questions, you give your firm a real chance at being highly disciplined and productive with every activity, task and initiative fully aligned with your strategic direction. A strategically disciplined advisory firm is like a well-written story with a tight plot line with no random characters or events.
Not surprisingly, there are a lot of resources available on strategic planning – books, articles and lectures – that are worth your time and effort. But sometimes proliferation begets confusion. Different words and labels get thrown around by executives and managers (and often by consultants, academics and writers) without regard to what they mean. This is certainly the case among owners and leaders of advisory firms.
I can clarify four oft-used terms listed below by defining them and providing examples.
- Core purpose
- Mission
- Vision
- (Core) values
Core purpose
Core purpose answers the question, “Why does our firm exist?” It has to do with why it’s worth doing what you do and why what you do matters. As David Packard, the co-founder of Hewlett Packard, succinctly put, “[Core purpose] is like a guiding star on the horizon – forever pursued but never reached. Yet although purpose itself does not change, it does inspire change.”
Core purpose is frequently confused with vision. But it’s not vision.
Below are some examples of core purpose:
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Walt Disney: To make people happy.
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IKEA: To create a better everyday life for the many people.
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Southwest Airlines: To connect people to what's important in their lives through friendly, reliable, and low-cost air travel.
Think of it as a single unifying principle that connects every one of your team members (including you) with the emotional aspirations of your clients.
Mission
Mission answers the question, “What business are we in?” Further, by extension, it also answers what business your firm isn’t in. While core purpose describes why you do what you do, mission describes what you do. Core purpose speaks to the heart while mission speaks to the mind. It provides focus and motivation to building and running your firm.
Many companies combine their core purpose and mission, and simply call it a mission. This is acceptable since they are two aspects of the same tenant. Confusing mission (or core purpose) with vision, however, is problematic because it will result in chaos in communications within the leadership team.
Some examples of mission are:
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Starbucks: To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.
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Warby Parker: To offer designer eyewear at a revolutionary price, while leading the way for socially-conscious businesses.
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Southwest Airlines: Dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit.
Vision
Vision answers the question, “What is our 10-year (or 20-year or 30-year) target?” Unlike mission and core purpose, which remain constant throughout, vision changes over time to reflect the evolution of your firm. According to Jim Collins in his Harvard Business Review article, “Building Your Company’s Vision,” a vision should be both audacious and simple. It should also compel you to be a visionary, rather than just strategic or tactical.
Collins also suggests that you write a vivid description of what it will be like to achieve your vision in a vibrant, engaging and tangible fashion.
Some examples include:
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Microsoft: A computer on every desk and in every home.
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Stanford University: Become the Harvard of the West.
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Southwest Airlines: Become the world’s most loved, most flown and most profitable airline.
Core values
Core values answer the question, “How do we behave?” They are a small set of timeless guiding principles, and ultimately define your firm’s culture. They are non-negotiable behaviors, which your current and prospective employees should be aligned with. They provide clear philosophical and behavioral framework on how to carry out your daily tasks and what your activities mean to your firm and its clients.
Starbucks
- Creating a culture of warmth and belonging, where everyone is welcome.
- Acting with courage, challenging the status quo and finding new ways to grow our company and each other.
- Being present, connecting with transparency, dignity and respect.
- Delivering our very best in all we do, holding ourselves accountable for results.
- We are performance driven, through the lens of humanity.
Zappos
- Deliver WOW through service.
- Embrace and drive change.
- Create fun and a little weirdness.
- Be adventurous, creative and open-minded.
- Pursue growth and learning.
- Build open and honest relationships with communication.
- Build a positive team and family spirit.
- Do more with less.
- Be passionate and determined.
- Be humble.
Nordstrom
- Service to the customer above all else.
- Hard work and individual productivity.
- Never being satisfied.
- Excellence in reputation; being part of something special.
With clarity around and a full alignment with your strategic direction, you give your firm the best possible chance to succeed.
Hoon Kang, CPA, CFP®, ChFC, CLU is a practice management consultant with Elliott Bay Advisors. His practice focuses on helping founder-centric advisory firms transform from practices to enduring businesses with transferable enterprise values. His articles have appeared in AICPA PFP Planner, Leimberg Information Services and Journal of Financial Service Professionals. He can be reached at [email protected].
Read more articles by Hoon Kang
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
