Posted by: kevinliebl | May 20, 2009

Returning to Business Fundamentals – What Business Are You In?

I recently overheard a group of 8-year-old neighborhood kids talking about what their parents do for a living.  After some discussion, they agreed that their parents do “email” for a living.  It made me laugh, because from their viewpoint that is exactly what we do all day.  When I started my career, no one had a PC on their desk.  The top executives had a “terminal”, but it sat on a credenza and most of them didn’t know what to do with it.  It was more of a status symbol.  Today, most of us sit in front of our computer all day long.

Technology has changed the way we complete our jobs, but the basic functions have not changed that much.  There are still sales, marketing, engineering, manufacturing, support and finance roles throughout most companies.  The difference is that we interface with each other virtually rather than face-to-face.  We use email, WebEx, Twitter, instant messaging and a number of other technologies to communicate with hundreds, if not thousands of people each day.

Dilbert's Mission Statement

Dilbert's Mission Statement

In this high-tech world, it is very easy to become tactical and forget the basic fundamentals of business strategy.  As an example, can you recall your company’s mission statement?  Does your company actually have a mission statement?

The mission statement is the cornerstone upon which the entire corporate plan is built.  All sales, marketing, engineering plans should align with the mission statement.  It should be a one-sentence statement that clearly defines the purpose, function and vision for the company.  In simple terms – “what business are you in and who is your customer?”

Examples:

“Acme Inc. designs, manufactures and sells high-quality, cost-effective ski equipment to meet the needs of the recreational skier.”

“Diamond Software develops supply-chain management solutions for the paper, printing and publishing industry.”

In the 1960 Harvard Business Review article “Marketing Myopia”, the authors discussed the short-sidedness of the “Railroad” industry.  The railroad industry failed to have the proper mission statement and it destroyed one of the largest industries in North America.  They believed they were in the “railroad” business rather than the “transportation” business and eventually collapsed due to other forms of transportation providing more efficient solutions to the market.

Make sure that your mission statement properly captures your business.  However, keep it broad enough to allow you to navigate market shifts.  There was a time when every salesman owned a Thomas Guide (a book of maps).  However, MapQuest, Google Maps and more recently GPS systems eliminated the market need for Thomas Guides.  Was the Thomas Brothers Company in the business of providing books of maps or providing directional tools?

Action Item:  Revisit your mission statement and make sure that it accurately reflects your business, target market and vision.  Is it broad enough for management to be able to respond to market changes?  Is it specific enough to keep the company focused?  Is it well communicated within the company?  Do the sales, marketing, engineering and other departmental plans align properly with it?

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Responses

  1. Kevin,
    Interesting points as usual. You might want to check out Guy Kawasaki’s site http://www.artofthestart.com. In chapter one of his book (which you can get from this site), he mentions that instead of a mission statement that you should have a mantra statement as they are more powerful and emotional.
    Take care.
    Jim Walery

    • Jim – great point. Guy Kawasaki’s reference to a mantra statement is good. There are many different names for the statement, but the key point is to have one. Many companies have forgotten the basics of business strategy. The recession is causing many people to go back and re-think the fundamentals of their business.

  2. Hi all

    I like Your blog. It is interesting. Do You have RSS I would add to my favorites.
    Let me know when it will be ready. Keep it up.


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