What You Need to Know About Strategy Formulation for the PHR/SPHR Exams
The mission statement, vision statement, and values statement (MVV) are at the foundation of strategy formulation. You probably already know what they mean, but here is what they can tell about an organization:
The mission statement answers the question: Why do we exist?
The vision statement answers the question: Where do we want to be?
The values statement answers the question: What do we believe in?
In addition to the MVV statements, a company’s core competencies are often identified at this stage of the strategic planning process. Core competencies answer the question “at the end of the day, what do we do?” For example, a car wash company’s core competencies statement would be “at the end of the day, we wash cars.” Or a construction company’s statement would be “at the end of the day, we build things.” Although these examples are simplified, they explain that the core competencies set the direction of action for a company in their strategic plan year.
By reducing down a company’s thinking to the core, an organization can then identify, corral, and focus on the resources necessary to accomplish what, at the end of each day, is at the heart of their business.
Finally, no strategic formulation of a plan is complete without the identification of goals. If the MVV and core competencies are at a 50,000-foot view of the organization as a whole, the goals bring them back to boots-on-the-ground action.
The SMART model is a useful way to remember how to write effective goals. The acronym stands for goals that are specific, measurable, attainable, relevant, and time-based. Clearly articulated goals are more likely to be achieved, and applying the SMART model will guide you through the process. From the perspective of the exams, you must be familiar with setting annual goals and objectives that correlate with the company’s strategic direction, including the MVV. Other goals specifically mentioned in the exam objectives are growth targets, new programs and services, and net income expectations. After the goal setting is complete, the implementation of the strategy can begin.
Both the PHR and SPHR exams require that you have a thorough understanding of all stages of strategic planning. But a plan with no action becomes an exercise in futility. A helpful way to remember is to visualize a regular piece of paper folded in half. Above the fold, you have listed all of the steps in this process that occur while sitting in a conference room. Below the fold are the action steps that will require you to be in your office or on the production floor — it’s time to get to work.