7 Types of Strategic Direction

Creating a solid strategy that outlines your company's direction can help you increase its efficiency, lower stress and help improve its profitability. Knowing the various types of strategic direction can help you create a more comprehensive strategic direction overall. In this article, we define strategic direction, list the types of strategic direction and provide you with the steps for setting a strategic direction.

What is strategic direction?

Strategic direction refers to the foundational ideas or actions that allow for greater consistency in strategy over time. It ultimately helps a company achieve its vision and helps it fulfill the goals of its organizational strategy. It also helps unite a company's strategies and provides for greater stability into the future. When an organization has a strategic direction, it helps determine the company's objectives and how it plans to accomplish them, it helps determine the required resources and it helps identify how an organization needs to operate in order to find success.

Types of strategic direction

Companies use various types of strategic directions to help it achieve a wide variety of goals. Here are seven types of strategic direction:

Mission

A mission establishes your company's purpose and explains why it exists. Companies use their mission as a guide for meeting its goals. For example, if your company has a mission to provide the highest quality jeans compared to other companies on the market, this allows for a greater long-term strategic direction that focuses on quality rather than focusing on goals like saving costs.

Related: Company Vision Statement vs. Mission Statement (With Examples)

Culture

Company culture refers to employee attitudes and behaviors within an organization. While it's hard to change company culture, culture itself helps to shape a company's strategic direction. For example, if you have a company with a service culture regarding the company's customers, you can easily improve your customer service where other companies don't.

Related: Guide To Company Culture

Vision

A company's vision highlights what the organization hopes to be and achieve in the future. It ultimately provides strategic direction alongside a company's mission statement. When a company has a particular vision, it can use it to modify its current business plan and spending in a way that better aligns with its vision. For example, if a company envisions zero pollution, it can use this vision to prioritize the company's current planning and spending ventures. It's worth noting that companies need a specific vision so its employees can determine whether or not they're ultimately helping the company move forward.

Related: Guide To Vision Statements

Values

Values refer to a company's fundamental beliefs. In other words, they refer to a company's principles that are right or wrong. Values help guide your organization and help employees work better toward common goals. Some examples of common company values include integrity, fairness and accountability.

As a strategic direction, your companies values help it move toward the achievement of its goals. If you own a technology company, for example, you may create a sustainability principle that states you plan to procure energy from a sustainable source and use it as efficiently as you can. Essentially, you can use your vision to provide direction for your company's actions.

Related: 83 Core Value Examples for the Workplace

Ideology

An ideology is a belief that defines a company's purpose. It describes how you want to conduct yourself with your employees, with your clients and with your industry at large. Ideology provides strategic direction through consistent and stable policies over time. Since it's part of a company's vision, you can use ideology to help your company aspire to what you want it to become.

Principles

Principles are guidelines or rules that give future strategy and decision making greater direction. For example, if you work for a technology company, you may have the principle that all data needs encryption. This means it can't have encryption lapses, which ultimately provides strategic direction for the company's future projects and initiatives.

Grand strategy

This refers to a long-term strategy that includes every approach and tool you can find. Even current strategies that seem irrational may make better sense when you consider the grand strategy.

For example, if an electric car manufacturer allows the free use of its patents by competing manufacturers, it may seem irrational from a business standpoint. However, opening them up to competitors may increase the rate of adoption for these vehicles and charging stations. This may then beat competing approaches such as those by hydrogen vehicles. Ultimately, a grand strategy can provide you with strategic direction over time. It also highlights the long-term optimization of a strategy rather than focusing on the short-term.

How to set a strategic direction

Strategic direction focuses on the plans and actions you need to implement in order to progress toward a vision for the organization's future. To gain the most value from having a strategic direction, you need to analyze every area area and process of an organization. Use these steps to set a strategic direction:

1. Consider your vision for the company. The importance of a strategic direction involves your ability to consider its overall purpose. Think of your vision for the company. Essentially, think of your reason for wanting this business to exist.

2. Reflect on your company's mission. Consider your company's mission or how you plan to make your vision come true. Typically, a mission statement may include information about a company's products and services.

3. Develop a plan. Identify your future direction and include your stakeholders in the process. You can involve them through various ways such as meetings or phone surveys.

4. Set periodic goals. Create short-, medium- and long-term goals. Start with your long-term goals that can ultimately help you achieve your mission and vision. Then, create medium-term goals that span a few years and eventually, set short-term goals that help separate your long-term planning into more achievable steps.

5. Set quantifiable goals. As you create goals, account for measurability. When you have specific and measurable goals, it's easier to see what you need to do to achieve them. Quantifiable goals also you track your progress and success throughout every stage of the process.