What is Strategic Intent ?
Strategic intent refers to the pre-defined future state that the organization is planning to reach within a stipulated period of time. The term strategic intent was popularized by Gary Hamel and C.K Prahalad. They defined strategic intent as the reason of existence of an organization and the ends it wants to achieve. It shows the beliefs and values of an organization.
To achieve a certain future state and to achieve certain ends the organization should take certain courses of action. These ends can be either long-term or short-term. While the long-term ends have broad focus, the short-term ends are narrow in nature. For an organization to become effective, it is very important for every staff member to have an understanding of the strategic intent. Hence, the strategic intent should be achievable as well as understandable.
Definitions of Strategic Intent
According to Prahalad and Doz :
"Intent is used here to describe long-term goals and aims, rather than detached plans. Strategic intent is crucial for a firm to aim for goals for which one cannot plan. It is important to separate that orientation (strategic intent) from strategic planning or strategies. Strategic intent allows for a firm to build layers of competitive advantage painstakingly, to accomplish long-term goals".
According to Burgelman and Grove :
"Strategic dissonance (misalignment between a firm's strategic intent and strategic action), strategic inflection point (the change of one winning strategy into another), and strategic recognition (the capacity of top managers to appreciate the strategic importance of managerial initiatives after they have come about but before unequivocal environmental feedback is available) are the three interrelated key concepts that answer the question of how top management can decide on strategic intent in high technology industries".
According to Lovas and Ghoshal :
"Strategic intent is long-term goals that reflect the preferred future position of the firm, as articulated by its top management".
It is important to consider that the strategic intent should be common for everyone in the organisation. It can also be termed as 'collective consciousness', which implies a common end, shared by all the employees. Strategic intent outlines a path that is required to be followed for attaining the broad mutual end.
Attributes of Strategic Intent
Strategic intent defines the nature of the path which an organisation needs to follow in order to secure the long-term strategic position that is to be achieved (accomplished) by the organisation.
According to Hamel and Prahalad, if the organisation clearly communicates its strategic intent, then each activity would have precise and consistent purpose. Strategic intent has the following attributes :
1) Sense of Direction :
The sense of direction defines where the organisation wants to go in the future and why. Every organisation requires a significant, steady, and common end. These ends should be valuable and necessary for the organisation. The environment and market for business changes very frequently and hence the strategic decisions should not be based on these short-term motives, else the efforts made by the organisations become inconsistent and fail to achieve the desired future state. Therefore, the organisations should pursue a long-term mutual end, which is consistent and shared in nature. A proper set direction helps organisation to achieve its long-term strategic intent.
2) Sense of Discovery :
The sense of discovery refers to the ability of inspiring the employees for innovation and creativity. This is necessary because the employees feel less enthusiastic when the strategic intent is not inspiring. The strategic intent should motivate the employees to perform the challenging tasks and explore new concepts. It should introduce new dimensions in the organisation and innovate superior ways to achieve them.
3) Sense of Destiny :
The sense of density refers to the ability of the strategic intent to provide meaning to the existence of the organisation. It should be able to create a sense of respect among the organisational members. Strategic intent should be meaningful and significant so that it can direct the organisation and motivate its employees. Thus, strategic intent must be meaningful for the employees and have the capability to set proper direction for them.
Hierarchy of Strategic Intent
Strategic Intent Vision, Mission, Goals and Objectives are elements included in the hierarchy of strategic intent :
The Strategic Intent Elements (Strategic intent vision, mission and objectives) serve to unify the ideas and resources towards a certain direction. These elements are not only beginning points but also the milestones at various levels. These elements act as a foundation for planning and directing activities. Strategic intent also provides a way and assures that all the efforts lead to organisation-wide progress. Strategic intent should be shared effectively with all stakeholders to strengthen their belief in company's offerings and its ability to lead the particular industry segment. Hierarchy of strategic intent with example are as follows :
A) Vision :
Hierarchy of strategic intent vision is a mental perception of the kind of environment and individual or an organisation aspires create within a board time horizone and the underlying conditions for the actualisation of this perception.
Vision statement can be referred as the statement defining company's long term goals. A vision statement can exceed from one line to a few paragraphs highlighting what the organisation want to achieve in future.
An effective vision statement motivate the employees and provide them a sense of direction for carrying out day to day business activities and also help in taking strategic decisions.
A vision statement is prepared to boost the moral of the employees by painting a picture of the path on which the organisation is heading. The vision statement of an organisation allow the managers to practically monitor the organisations progress by comparing the stated objectives and operational plans for achieving those objectives.
Strategic Intent Examples :
Infosys vision is "To be a globally respected corporation that provide best of breed business solutions, leveraging, technology, delivered by best-in-class people".
FEATURES OF A GOOD VISION :
- Should be realistic and idealistic.
- Clarifies direction for the organization.
- Inspires organization members and encourages commitment.
- Reflects the uniqueness of the organization, its distinctive competence.
- Appropriate for the organization, consistent with its values and culture.
- Well articulated and easily understood.
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B) Mission :
A mission provides the basis of our awareness of a sense of purpose, the competitive environment degree to which the firms mission hit its capabilities and the opportunity which the government offers.
A mission statement refers to the corporate reason for the existence of an organisation. Mission statement does not outline the outcome. It has no time frame or measurement associated with it. It highlights the current position and future scenario of an organisation in terms of product, market, pricing, customer service etc. Mission has a little touch of philosophy in it, as it talks about the aspects for which an individual is destined to be in this world. It provide the ground on resource allocation as per the objective.
- Mission defined as the fundamental, unique purpose that sets a business apart from other firms of its type and identifies the scope of its operations in product and market terms.
- It is a statement of attitude, outlook and orientation.
- It communicates what the firm wants to be.
- It indicates the businesses the firm will pursue and the customer needs it will seek to satisfy.
- Shaped by the vision of the corporation's leaders.
For example :
Infosys mission statement is "To achieve our objectives in an environment of fairness, honesty and courtesy towards our clients, employees, vendors and society at large".
NEED FOR A MISSION
- To ensure unanimity of purpose within the organisation.
- To provide a basis for motivation.
- To establish an organisation climate.
- To serve as a focal point.
- To facilitate the translation of objectives and goals into work structure.
- It implies the image which the firm seeks to project.
C) Business Definition :
Business definition refers to the description of products, services, activities, functions, and markets in which an organisation deals. It is a component of mission statement which forms the foundation for all the strategic planning processes and shows the organisation a way to achieve success. It also helps the organisation in estimating the changes as well as their effects. Business definition outlines the current position and the desired future positions. It discusses the operations of the business but does not exactly specify the reasons behind particular operation.
Some of the questions that are needed to answer while defining a business are :
- What are the products, services, or markets in which the organisation operates?
- Who are the target customers?
- Which activities and functions are performed to satisfy the customers?
- What are the resources and capabilities utilised to satisfy the customers?
This concept applies to both the product and service organisations. Business definition is usually marketing oriented. It focuses on customers as they are the strength of the organisation. As an external stakeholder the customers have the power to make or break the organisation. Business definition outlines the scope of an organisation.
For example :
Some organisations like Reliance Industries Limited, Tata Group, and Birla Group have wide scope, but some other organisations like Infosys, Wipro, etc., have limited scope.
D) Goals :
Organisational goals refer to the ideal situations to be achieved in undefined time-duration in future. These goals direct the daily activities and decisions. However, goals do not essentially lead to the quantifiable outcomes. These statements are related to the vision and mission statements. Goals can be followed for day-to-day operational activities and decisions, not essentially tied up with quantifiable results.
Organisational goals provide the standards to measure the performances for achieving the wide-ranging objectives. These are the targets that convert the vision and mission into reality. Goals help in portraying a positive image of the organisation in the industry. It plays an important role in maintaining public relations and encourages support from various groups.
Goals is to establish a venereal tone or organisational climate to serve as a focal point for those who can identify with the organisation purpose and direction and to defer those who cannot, from participating in the organisation's activities; to facilitate the translation of the broad purposes and mission into identifiable tasks and their assignment to responsible groups within the organisation and to help in allocating organisational resources.
According to Robey :
"An organisation falling short of its tartest might set up a task force to develop new policies for achieving a higher level of goal attainment. Goals can also provide a rationale for designing the organisation. A goal of rapid growth through introduction of new products may lead and organisation to create a strong R & D department and to create a mechanism for close integration among the engineering, marketing and R & D departments”.
Features of Goals :
The goals of an organisation are characterised as follows :
1) Specific :
The goals should clearly specify targets to be achieved and the tasks to be fulfilled. This would help the managers in evaluating the performance at regular intervals. An ideal goal should address major issues that are critical for success of the organisation.
2) Realistic and Challenging :
An organisational goal should be realistic as well as challenging. If the goal is unrealistic, the employees may find it unachievable and may get demotivated. But, the goal should also not be too easy. It should be challenging enough so that it can encourage the employees to improve their performances by searching new and creative ways of carrying-out the organisational activities.
3) Time Constraint :
Another important characteristic of an organisational goal is that there should be a time-period associated within which it has to be completed. It provides a deadline to the employees and managers so that they are motivated to improve performance for achieving success within the time constraint.
4) Measurable :
The goals should be quantifiable. It implies that the goals should be measurable so that the outcome could be evaluated and the progress can be estimated. Measurable goals act as a yardstick for the managers and their team members to evaluate their performance.
5) Level-Oriented Goals :
A goal should be set to address important issues only. The top and middle level managers are accountable for such long-term goals. On the other hand, the short-term goals should be addressed by lower-level managers.
6) Commitment :
The members of the organisation should be committed for the achievement of set goals.
Types of Goals :
1) Official Goals :
Official goals are the common objectives of the organisation. These goals validate the activities of the organisation and stabilise the organisation in its environment. These goals are mentioned in the documents published in the organisation periodically, such memorandum of association, annual performance report, etc. The top level management addresses these goals in their public statement.
2) Operative Goals :
Operative goals indicate the actual targets that an organisation wishes to achieve. These can be considered as the operating policies. These goals help the managers in reducing the possibilities of uncertainty while remaining attentive. The operating goals help in selecting the alternative designs for organisation.
3) Operational Goals :
These goals are set by the middle level managers for supervising or controlling the subordinates. These goals help in measuring the performance of the employees.
E) Objectives :
Objectives are states or outcomes of behavior that are desired. An organisation may desire either to obtain something that it does not currently have or to retain something it already has. Hence, objectives may be either acquisitive or retentive.
Strategic objectives are those aims that are formulated to bring major changes in response to the changes, competition, and issues in the environment. These objectives are formulated to address various internal and external issues such as target customers, target markets, product, and changes in technology, etc.
Precisely, these objectives are the ultimate aim that an organisation needs to attain to remain competitive in the market and for its long-term survival. Strategic objectives determine the direction of the organisation in long-term and helps in allocating organisational resources.
Strategic objectives are the specified targets to be achieved in a stipulated period of time. These objectives help the managers in evaluating performances of the employees in term of quality and quantity. Strategic objectives answer the questions like what to achieve, how much to achieve, when to achieve, how to achieve and who must achieve it.
The objectives identify the activities of the organisation. While formulating strategies, objectives help in decision-making by assisting the managers in various perspectives. The objectives also provide measures for evaluating the final performance of employees.
According to Robert L. Trewatha and M. Gene Newport :
"Objectives may be defined as the targets people seek to achieve over various time periods".
According to H. Igor Ansoff :
"Objectives are decision rules which enable management to guide and measure the firms performance towards its purpose".
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