Organisational Mission: Vision, Purpose And Values Chapter 4 Organisational Mission: Vision, Purpose And Values

Objectives differentiate between vision, purpose and values describe an Australian perspective on organisational vision, purpose and values give a detailed explanation of the nature and purpose of the vision, purpose and values identify and articulate the primary components of the vision, purpose and values, and describe ways commitment to the organisation’s vision, purpose and values can be strengthened Self explanatory. Strategic Management 4e., Viljoen & Dann © 2002 Pearson Education Australia

Major Components of the Strategic Plan / Down to Action Action Plans Evaluate Progress Mission Why we exist Vision What we want to be Goals or purpose What we must achieve to be successful Objectives Specific outcomes expressed in measurable terms (NOT activities) O1 O2 Initiatives Planned Actions to Achieve Objectives AI1 AI2 AI3 Indicators and Monitors of success Measures M1 M2 M3 Targets T1 T1 T1 Desired level of performance and timelines Matt H. Evans, matt@exinfm.com 3

Mission statement Typically contains three elements Vision statement Purpose statement Values statement The organisation’s mission statement is an important step in developing a blueprint for the organisation. A well planned mission statement gives new comers to the organisation a clear understanding of its underlying values. Involvement in the process of developing the statement provides a focus for commitment of existing staff members. In specifying what the organisation stands for and what are key issues and commitments, it encourages unanimity of purpose and limits internal conflict. During the process of identification it leaves the way open for new ideas and projects. Agreeing on exactly what is its business and purpose, highlights those points of differentiation which are unique to that organisation. Clearly stating the mission of the organisation both attracts of deters prospective employees and leaves no doubt in the customer's mind what the organisation stands for and offers. Three major elements - Vision statement – specifies what an organisation could achieve if it performs perfectly. Difficulties encountered when the vision is too far removed from the reality of individual sections of the organisation. Purpose statement- definition of the organisation’s business. Often a problem that the business is stated too narrowly. Values statement – underlying beliefs of the organisation - how is chooses to work as a human enterprise. Strategic Management 4e., Viljoen & Dann © 2002 Pearson Education Australia

The Mission:Vision, Purpose And Values Strategies How we are going to get there Vision Our ideal future Objectives What we want to achieve Purpose Our core business Values Things we Believe in Self explanatory Figure 4.1 Strategic Management 4e., Viljoen & Dann © 2002 Pearson Education Australia

Mission & Vision Vision: Defines the desired or intended future state of an organization or enterprise in terms of its fundamental objective and/or strategic direction. Vision is a long-term view, sometimes describing how the organization would like the world to be in which it operates. For example, a charity working with the poor might have a vision statement which reads "A World without Poverty." The vision is usually developed by the organization’s leader. Mission: Defines the fundamental purpose of an organization or an enterprise, succinctly describing why it exists and what it does to achieve its Vision. It is sometimes used to set out a "picture" of the organization in the future. A mission statement provides details of what is done and answers the question: "What do we do?" For example, the charity might provide "job training for the homeless and unemployed."

Mission & Vision Organizations sometimes summarize goals (or purpose) and objectives into a mission statement and/or a vision statement. Others begin with a vision and mission and use them to formulate goals (or purpose) and objectives. In some cases this mission statement is used as part of the company’s promotion material. A Mission statement tells you the fundamental purpose of the organization. It defines the customer and the critical processes. It informs you of the desired level of performance. A Vision statement outlines what the organization wants to be, or how it wants the world in which it operates to be. It concentrates on the future. It is a source of inspiration. It provides clear decision-making criteria.

Create a Mission Statement Once you have clarified your beliefs, build on them to define your mission statement which is a statement of purpose and function. Your mission statement draws on your belief statements. Your mission statement must be future oriented and portray your organization as it will be, as if it already exists. Your mission statement must focus on one common purpose. Your mission statement must be specific to the organization, not generic. Your mission statement must be a short statement, not more than one or two sentences. Here is an example mission statement: "By providing quality education, we empower individuals to become caring, competent, responsible citizens who value education as a lifelong process."

Creating a Vision When you begin the process of strategic planning, visioning comes first. When visioning the change, ask yourself, "What is our preferred future?" and be sure to: Draw on the beliefs, mission, and environment of the organization. Describe what you want to see in the future. Be specific to each organization. Be positive and inspiring. Do not assume that the system will have the same framework as it does today. Be open to dramatic modifications to current organization, methodology, teaching techniques, facilities, etc.

Keeping the Vision Relevant in Organisations Organisational vision (overreaching) Aspirations for Division A Aspirations for Division B Aspirations for Division C Self explanatory 10 Strategic Management 4e., Viljoen & Dann © 2002 Pearson Education Australia 10

Key Components for Your Vision Incorporate Your Beliefs : Your vision must be encompassed by your beliefs. Your beliefs must meet your organizational goals as well as community goals. Your beliefs are a statement of your values. Your beliefs are a public/visible declaration of your expected outcomes. Your beliefs must be precise and practical. Your beliefs will guide the actions of all involved. Your beliefs reflect the knowledge, philosophy, and actions of all. Your beliefs are a key component of strategic planning.

Exercise in Creating a Vision Take the time to assimilate this information, use the following example to exercise your planning techniques: It is five years from today’s date and you have, marvelously enough, created your most desirable district. Now it is your job, as a team, to describe it - as if you were able to see it, realistically around you. Respond to the following questions: How has the job market changed? What have we done to prepare our students for success in this world? What do we as board members spend most of our time doing? How are our meetings structured?

Purpose statement Issues in defining purpose - narrow versus broad purpose purpose and relevant environment purpose and customer needs purpose and customer segments purpose and technology The organisation’s purpose statement is a description of the nature and scope of the organisation’s activities – the definition of the organisation’s business Issues in defining purpose - narrow versus broad purpose purpose and relevant environment – relates to the total economic, social, political and competitive environment – internal and external. purpose and customer needs – developing a customer orientation – what the customer needs and wants, not what the organisation can produce and wants to give them. purpose and customer segments – not all customers will be appropriate for all organisations – what customer segments can we supply, what customer segments do we want to supply. Focuses the organisation and allows them to concentrate their efforts on the chosen segment. purpose and technology – can be a problem if the organisation defines itself in terms of technology per se rather than technology which will help satisfy their market segment Strategic Management 4e., Viljoen & Dann © 2002 Pearson Education Australia

Fundamental purpose defines organisation’s business is the central reference point of strategic management can be defined too broadly or too narrowly identifies the statement of organisational purpose Although defining the organisation’s business may appear redundant it is one of the most important parts of the process. Organisations should take care not to limit opportunities by defining their statement of fundamental business too narrowly. In expressing the core business of the organisation care should be taken not to limit opportunities by using too narrow a term of reference. Illustration capsule 4.7 shows the recognition of the book store that what they are selling is entertainment rather than the more narrow description of ‘book seller’. Once having accepted that entertainment is the business, there is no conflict with expanding into coffee shops that sell books. It takes time and effort to clearly identify and articulate the statement of organisational purpose. The three most commonly used bases for developing this process is to consider the: customer needs customer group, and technology used 14 Strategic Management 4e., Viljoen & Dann © 2002 Pearson Education Australia 14

Key areas in defining organisational purpose customer need customer group technology utilised Customer need - essential to all services and goods production. It is the desire of someone - the customer- to use or own these products. Therefore those organisations which fail to recognise that it is not what they want to produce, but what the customer wants to buy that is the prime focus, have little chance of success. Customer group - before asking the question 'what do my customers need?' you first need to identify who the customer is. In identifying customer service groups, the organisation is able to provide the service or goods they require. Building from the current customer group allows the organisation to build on its current strengths. Technology utilised - a major group that have taken to using new technology is the banking industry. Traditional financial institutions have had a major shake-up in recent years with the deregulation of the industry. As they are no longer able to differentiate on the types of service offered, they are using technology to develop cost efficient services. A major problem with the technology approach is that the technology itself becomes a focus rather than the customer. 15 Strategic Management 4e., Viljoen & Dann © 2002 Pearson Education Australia 15

Setting Goals and Objectives  The difference between where we are (current status) and where we want to be (vision and goals) is what we do (target objectives and action plans).  As this statement shows, setting goals and objectives builds on the previous steps of visioning and taking stock. Goals are simply a clearer statement of the visions, specifying the accomplishments to be achieved if the vision is to become real. The target objectives are clearer statements of the specific activities required to achieve the goals, starting from the current status.

Goals vs. Objectives GOALS OBJECTIVES Very short statement, few words Longer statement, more descriptive Broad in scope Narrow in scope Directly relates to the Mission Statement Indirectly relates to the Mission Statement Covers long time period (such as 10 years) Covers short time period (such 1 year budget cycle) Matt H. Evans, matt@exinfm.com 17

Examples of Goals Reorganize the entire organization for better responsiveness to customers We will partner with other businesses, industry leaders, and government agencies in order to better meet the needs of stakeholders across the entire value stream. Manage our resources with fiscal responsibility and efficiency through a single comprehensive process that is aligned to our strategic plan. Improve the quality and accuracy of service support information provided to our internal customers. Establish a means by which our decision making process is market and customer focus. Maintain and enhance the physical conditions of our public facilities. Matt H. Evans, matt@exinfm.com 18

Examples of Objectives Develop a customer intelligence database system to capture and analyze patterns in purchasing behavior across our product line. Launch at least three value stream pilot projects to kick-off our transformation to a leaner organization. Centralize the procurement process for improvements in enterprise-wide purchasing power. Consolidate payable processing through a P-Card System over the next two years. Monitor and address employee morale issues through an annual employee satisfaction survey across all business functions. Matt H. Evans, matt@exinfm.com 19

Values statement Values: Beliefs that are shared among the stakeholders of an organization. Values drive an organization's culture and priorities and provide a framework in which decisions are made. For example, "Knowledge and skills are the keys to success" or "give a man bread and feed him for a day, but teach him to farm and feed him for life". These example values may set the priorities of self sufficiency over shelter.

Values statement The values of an organisation Encourage unanimity in the way activities are carried out, thereby reducing internal conflict Establish the climate, or culture, of the organisation Establish the rights and obligations of staff Specify standards for individual behaviours within the organisation. Value statements can be used as effective recruitment tools – attracting likeminded employees. Are able to clearly demonstrate the ethical stand which the organisation wants to take. It is important to clearly specify the behaviours that underpin organisational values for two main reasons: Human behaviours are internalised – we judge the value of a person by their behaviours. Organisations are also judged by the behaviour of their staff and by specifying expected behaviours there is a greater likelihood of the organisation's values being demonstrated. In terms of staff performance, if there are no specific values stated, managers cannot accurately assess performance. 21 Strategic Management 4e., Viljoen & Dann © 2002 Pearson Education Australia 21

Optional components of a mission statement strategic distinctiveness stakeholder promises public image. Although mission statements tend to contain the core elements of vision, purpose, and values there are many other areas that can be included, for example: strategic distinctiveness – something that sets the organisation apart from others – their point of differentiation – could be better technology, superior customer service, etc stakeholder promises – what the organisation commits itself to in terms of relevant stakeholders, e.g. shareholders public image – refers to how the organisation wants to be seen by the general public and how they will achieve this image. Strategic Management 4e., Viljoen & Dann © 2002 Pearson Education Australia

Strategic distinctiveness Competitive differential advantages which can include: superior customer service perceived quality public image efficiency The statement should contain a statement of the organisation's strategic distinctiveness - what it is that makes this organisation different from others. Customer service is another point of distinctiveness. What is acceptable from McDonalds - self service; clean your own table is acceptable when you want quick, cheap accessible food. Perceived quality - customers have their own perception of the quality of well known products and service. It is important that these perceived qualities are maintained. Once again using McDonalds as an example the customer knows what to expect - if they arrive to find excellent waitress service but higher prices and longer waiting times, even if objectively the service was better, the customer would be unlikely to have a perception of improvement. Strategic Management 4e., Viljoen & Dann © 2002 Pearson Education Australia

Other components stakeholder promises values and beliefs standards and behaviours public image Stakeholders include shareholders, employees and customers. Each of these groups will have different expectations of the organisation, but it is important that the mission statement addresses these issues. The values and beliefs of organisations are an essential part of the statement for many reasons, not least that prospective employees are well aware of the working environment within the organisation. Standards and behaviours outline the underlying principles of implementation that the organisation will adopt, eg commitment to continuous improvement. Public image - an area that is often neglected with organisations preferring to focus on internal rather than external issues. It includes such areas as professionalism and social responsibilities. It is important, as in all other areas of strategic management to maintain a balance between the external and internal issues. Strategic Management 4e., Viljoen & Dann © 2002 Pearson Education Australia

Measuring success evaluating mission statements creating a sense of mission Bowman (1998) uses the following criteria to evaluate mission statements: would a new manager entering the organisation have a clear view, just from reading the mission statement, of what is trying to be achieved? does each phrase and sentence help to clarify the organisation’s intentions? If one does not, why is it in there? Could it be taken out? does the top team really believe in the statement? is it obvious how a whole set of schemes must be set in motion if the intentions in the statement are to be realised? Top management need to both ‘sell’ the values embodied in the mission statement and work to them as well. No matter what is said, the actions of managerial staff will be the most effective influence. Additionally, there should be appropriate award systems in place to support those staff who adhere to company values. The mission statement should define those components of the external environment that are relevant to their organisation. Some organisations go as far as to identify key factors that if they change will trigger a need for strategy analysis within their organisation. Strategic Management 4e., Viljoen & Dann © 2002 Pearson Education Australia

Mission statement versus sense of mission effective organisations take their mission seriously knowledge and understanding of mission encourages better performance effective strategic managers engender sense of mission in the organisation The development of a mission statement is often little more than a statement which can be displayed rather than an actionable and achievable statement. The effective mission statement is one that is relevant, disseminated and understood. Formalising the beliefs and overall ethos of the organisation is the first step in achieving cohesion and agreement in future goals. If there is no formal statement then employees will tend to develop their own, based on what they believe the organisation should be achieving. Managers need to be committed to achieving a 'sense of mission within the organisation'. In order to do this they need to develop their actions to be consistent with the organisation's statement. The development of a clear workable mission statement is the first step in developing the overall sense of mission within the organisation. 26 Strategic Management 4e., Viljoen & Dann © 2002 Pearson Education Australia 26