Strategic Planning Terminology for Small Businesses

Most of what we learn in business schools and textbooks is written for large companies. There are many justifiable reasons for this. Jim Collins says that he studies large public companies simply because there is not enough information available for smaller private ones.  However, big or small, there is probably nothing in business more valuable than good strategic planning.

A critical first step in the planning process is articulating the purpose for your business, identifying your core values and developing a vision of the future. This post is about understanding the terminology of these elements which are vital to the rest of the strategic planning process.


Your purpose is your businesses fundamental reason for existence beyond just making money. It is a perpetual star on the horizon and is not to be confused with specific goals or business strategies. It answers the question “why are we here?” A purpose is broad, fundamental, and enduring.  A good purpose should serve to guide and inspire for 100+ years.

Purpose need not be wholly unique…rather its role is to guide and inspire…not necessarily differentiate. There have been numerous studies and surveys of employees that have concluded that involvement in meaningful work is actually a more important factor than pay. Meaningful work is what gets business owners, and employees, out of bed in the morning.

Sample core purposes

  • Merck: To preserve and improve human life
  • Walt Disney: To make people happy
  • Sony: To experience the joy of advancing and applying technology for the benefit of the public


Values govern the operation of the business and its conduct or relationships with society at large, customers, suppliers, employees, local community and other stakeholders. Values answer the questions “What do we want to live by?” and “How?” They need to be clearly described, so you know exactly the behaviors that demonstrate that the value is being lived. They are learned and reveled internal governors of right and wrong that we feel in our gut and throat. They help us choose what is most important.

Core values are a small set of general guiding principles:

  1. They are not to be confused with specific cultural or operational practices.
  2. They are not to be compromised for financial gain or short-term expediency.
  3. They are the organization’s essential and enduring tenants…never to be compromised.
  4. The real difference between success and failure in a business can be traced to how well the organization brings out the great energies and talents of it’s people.
  5. It sustains this common cause and sense of direction through many changes which take place from one generation to another. (It is the stake in the ground that keeps everyone from veering too far off course.)
  6. In most cases it can be boiled down to a piercing simplicity that provides substantial guidance.
  7. Visionary companies have between 3-6 core values. (Any more than 6 and you begin drifting away from those that are core.)

Sample core values


  • Corporate social responsibility
  • Unequivocal excellence in all aspects of the company
  • Science-based innovation
  • Honesty and integrity
  • Profit, but profit from work that benefits humanity

Walt Disney:

  • No cynicism
  • Nurturing and promulgation of “wholesome American values”
  • Creativity, dreams, and imagination
  • Fanatical attention to consistency and detail
  • Preservation and control of the Disney magic


  • Elevation of the Japanese culture and national status
  • Being a pioneer – not following others; doing the impossible
  • Encouraging individual ability and creativity


Vision should be presented as a pen picture of the business in five to seven years time in terms of its likely physical appearance, size, activities etc. Vision answers the question, “Where are we going?” It is the picture of the end result…something you can actually see…not vague. Vision is knowing who you are, where you are going, and what will guide your journey.

Vision and direction are essential for greatness. In world-class organizations, every-one has a clear sense of where the enterprise is going. Only when the leaders of an organization know that their people understand the agreed-upon vision and direction can they attend to strengthening the organization’s ability to deliver on this vision.

Vision helps people make smart choices because their decisions are being made with the end result in mind. As goals are accomplished, the answer to “What next?” becomes clear. Vision takes into account a larger picture than the immediate goal. Martin Luther King Jr. described his vision of a world where people live together in mutual respect. In his “I Have a Dream” speech, he described a world where his children “will not be judged by the color of their skin, but by the content of their character.” He created powerful and specific images from the values of brotherhood, respect, and freedom for all—values that resonate with the founding values of the United States. King’s vision has passed a crucial test – it continues to mobilize and guide people beyond his lifetime. Vision allows for a long-term proactive stance—creating what we want—rather than a short-term reactive stance—getting rid of what we don’t want.

Vision is important for leaders because leadership is about going somewhere. If you and your people don’t know where you are going, your leadership doesn’t matter. Without a clear vision, an organization becomes a self-serving bureaucracy.  The top managers begin to think “the sheep are there for the benefit of the shepherd.” All the money, recognition, power, and status move up the hierarchy, away from the people closest to the customers, and leadership begins to serve the leaders and not the organization’s larger purpose and goals. The results of this type of behavior have been all too evident recently at Enron, World-com, and other companies. Once the vision is clarified and shared, the leader can focus on serving and being responsive to the needs of the people. The greatest leaders have mobilized others by coalescing people around a shared vision. Sometimes leaders don’t get it at first, but the great ones eventually do.

Tests of a compelling vision are:

  1. Helps you understand what business you’re really in.
  2. Provides guidelines that help you make daily decisions.
  3. Provides a picture of the desired future that you can actually see.
  4. Is enduring
  5. Is about being great – not solely about beating the competition.
  6. Is inspiring – not expressed solely in numbers.
  7. Touches the hearts and spirits of everyone.
  8. Helps each team member see how he/she can contribute.

Parting thoughts

Jim Collins raises the question, “How can we be sure the core ideologies of highly visionary companies represent more than just a bunch of nice-sounding platitudes – words with no bite, words meant merely to pacify, manipulate, or mislead?” He then offers an answer. Social psychology research strongly indicates that when people publicly espouse a particular point of view, they become more likely to behave consistent with that point of view even if they did not previously hold that point of view. In other words, the very act of stating a core ideology influences behavior toward consistency with that ideology.

By Don James CPA/PFS, CFP


About Don James, CPA/PFS, CFP
Don is the Tax & Financial Planning partner with Kiplinger & Co., CPAs headquartered in sunny Cleveland, Ohio since 1982. He partners with business owners and families and specializes in goal achievement solutions, tax minimization strategies and serves in the role of gatekeeper of sound financial advice.

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