In an earlier article we discussed the three layers of the enterprise. In this article we will
discuss in
more detail the strategy layer.
It can be represented as follows:
Strategy Layer
The primary components of the strategy layer are:
- Vision - The vision of the enterprise generally is a broad inspirational image of the future that
an enterprise is aiming to achieve. It aims at the long term objective that the enterprise
wants to achieve. The vision defines the overall goal of an enterprise that all business
activities and processes should contribute towards achieving. It serves as an important
component to the strategic framework since all strategies are inspired by and based on the
vision.
- Mission - The mission is a memorable statement of the reasons for the existence of the
enterprise and defines a general declaration of the purposes of the enterprise and the
objectives that the enterprise wants to achieve in the long term. The mission can be
considered to be a high level statement of how the vision is to be achieved.
- High Level Business Strategy - The high level strategy, also referred to as the long term
strategy, describes the direction than the enterprise takes with the aim of achieving business
success in the long term. It is closely aligned with the vision and mission and normally
describes in detail how the vision will be achieved.
- Scenarios - When an enterprise becomes active in their market, or markets, of choice it
needs to plan for future sustainability. As the enterprise can only control the internal
workings, and the impact it has on its chosen markets, it can only react to external driving
forces. This has the effect that the enterprise can only plan for futures it suspect as opposed
to the futures that will happen. To properly plan for, and anticipate, the future, different
futures must be considered. Different futures are planned for by consideration of and planning
for different scenarios, each of which describes a different type of future. Normally, a
combination of scenarios describes the future. Some aspects of each scenario will come true
in the future. By casting the net of scenarios wide enough, an enterprise will be prepared for
a wide range of possible futures.
- Detail Business Strategy - Once the possible futures (scenarios) are known and business
plans have been compiled on how those scenarios will be managed the enterprise may
develop the detail business strategy. The detail business strategy intends to achieve the long
term strategic objectives and is normally based on the most likely scenario to occur. Some
enterprises refer to the detail strategy plans as their tactical strategy. Time frames for the
detail business strategy normally covers a period of 12-24 months in the future of the
enterprise. Detailed business strategies can be considered stepping stones in order to achieve
the long term high-level strategy, and ultimately the vision.
- Performance Management - Once a detail business strategy exists and is executed it is crucial
to measure on whether there is progress in terms of achieving that strategy. In order to
measure progress it is necessary to implement some sort of performance management
framework that will provide the indicators that will show progress against the plan. A
performance management framework normally represents the detailed business strategy
objectives and how they are measured. The performance management framework provides a
mechanism which links the vision/mission, long term business objectives, scenarios, detail
business strategy into a framework that can be measured with the use of performance
measurements. An example of a performance management framework is the Balanced
Scorecard. The Balanced Scorecard is a comprehensive, top-down view of enterprise
performance that has a strong focus on vision and strategy.
All of the strategy layer components are dependent on each other and must be closely aligned in
order to focus on the achievement of the ultimate purpose - the vision. This means that these
components must be:
- Specific - The vision is the only component that may be stated in terms of a general statement.
Even though general, it must be very specific to the long term goal to be achieved. All other
components follow from the vision statement and must be specific and unambiguous in terms
of the vision statement.
- Consistent - All parts of the strategy layer must be in agreement with each other. For example,
the mission cannot disagree with the vision. Inconsistency between the strategy layer
components will lead to business strategies that contradict each other and ultimately will lead
to business processes that contradict and work against each other.
- Highly traceable - The vision statement must run like a golden threat through all of the strategy
layer components and may be seen as the foundation for the strategy layer. Upon this
foundation is built the mission, on that - long term strategy, and so on.
Ultimately the proper and precise definition of the strategy layer components will underlie the
successful business practices of the enterprise.
