- A mission statement informs about a company culture whereas a strategic principle guides a company's strategy
- Mission statement is aspirational in nature but a strategic principle is action oriented
- The mission statement is to inspire frontline workers. The strategic principle is to enable them to act quickly by helping them to make consistent choices.
We know that mission statements are important. Strategic principles are also equally important , more so because of the high levels of uncertainty in any industry today. Some of the reasons of this uncertainty are
- decentralization
- unforseen rapid growth
- technological changes by innovation including disruptive ones
- turmoil in the institutions with high churn rates
What is Strategic Principle then ?
Well it is a short simple statement that is easy to remember and understand , which guides a company's allocation of scare resources to achieve sustainable competitive advantage. A good strategic principle should be able to
- Force trade offs between competing resources
- Can be used to test the soundness of a particular strategic action
- Set boundaries within which employees are free to experiment
The authors have given some excellent examples like GE, Walmart etc. I thought it would be good to include some examples of taglines. Taglines may be different from strategic principles but they reflect the company strategy to the external world. Tagline sets the expectations while strategic principle enables the frontline to meet the expectations. I think there should be a sync between the two.
Accenture - High performance. Delivered.
Infosys - Powered by intellect , driven by values
Wipro - Applying thought
Phillips - Sense and Simplicity
Tata Motors - More cars per car
CitiBank - The Citi never sleeps
Bank of India - Relationship beyond Banking
While all these taglines are pretty nice they do not necessarily qualify the criteria set by the authors. A proper survey of frontline employees and the past performance of the companies can throw light on this.
Apart from this I also think there is a subtle difference in the way customers perceive the company. A fundamental difference is about the type of customers B2B or B2C. B2B customers are much more aware and typically look beyond taglines into the actual performance of the company whether it can live up to its expectations. Whereas in B2C customers might be more attracted but they may not really be able to correlate the actions of the frontline with the tagline.
