Begin setting objectives for your business or your company’s business by projecting forward three to five years and imagining a perfect future. Decide what is right before you decide what is possible. If the business were ideal in every respect five years from today, what would it look like?
Imagine that you could wave a magic wand and create the perfect situation in every part of the company. Imagine that you have all the money, manpower, and resources to do anything you want in your organization. If the business were perfect in five years, what would be its level of sales, profitability, and reputation in the marketplace? How much would your company be earning, and what would your personal income be?
All business planning begins with an ideal vision of the future. Clarifying and sharing this vision is a key responsibility of leadership. As the Bible says, “Where there is no vision, the people perish.” Where there is no vision in a company, people are eventually reduced to simply going through the motions, operating from day to day, with no idea of the kind of future they are supposed to be creating.
The purpose of a business strategy is to provide a plan to organize and deploy the resources of the business in such a way as to increase the return on equity invested in the business. This is the amount of money that the owners of the business have put at risk to earn a profit.
The second aim of business strategy is to decrease costs by finding better, faster, cheaper ways to produce the same products or services and accomplish the same results.
The third objective of business strategy is to identify and exploit the opportunities of tomorrow while simultaneously reducing the risks of today.
There are four key questions with regard to setting objectives that you should ask and answer continually, especially when you are experiencing resistance or frustration of any kind in the accomplishment of your goals. These questions are:
1. What are we trying to do? What exactly are your goals? Are they written down, clear, specific, time-bounded, and measurable? Lack of clarity with regard to goals leads to lack of accomplishment, both in the short term and in the long term.
2. How are we trying to do it? Always remain open to the possibility that there could be a different or better way to accomplish the same objective—with lower costs, lower risks, and greater certainty.
3. What are our assumptions? What are you assuming about your current situation that may not be true at all? Every decision is made on the basis of certain assumptions, either clear or unclear. As Alex MacKenzie, author of The Time Trap, wrote, “Errant assumptions lie at the root of every failure.” For example, in World War II, the fortress of Singapore was supposedly impregnable, but the British defenders assumed that any attack on Singapore would come from the sea. When the Japanese instead attacked from the landward side to the north, the British were quickly over- whelmed and surrendered a garrison of 62,000 men on February 15, 1942. Winston Churchill described it as, “The worst disaster and largest capitulation in British history.”
4. What if our assumptions are wrong? What if you are taking actions today that would be completely inappropriate for achieving your objectives if certain assumptions were wrong? Always be open to the possibility that you are dead wrong in your beliefs and assumptions. If you were wrong, what changes would you have to make immediately to survive and thrive in your current market?