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Frequently we become so busy, so absorbed by our day to day work that we forget to ensure that our organization has a clear and well communicated purpose. Yet research tells us that a clear and widely understood ‘purpose’ is the hallmark of a successful organization just as confusion over direction and purpose is a hallmark of a failing organization.
The Big Question
So just what separates ‘average’ organizations from ‘excellent, outstanding’ organizations?
This must be one of the most frequently asked questions in management circles and there is no short and simple answer. But we can get a glimpse of one key difference if we start at the beginning, the beginning of the life of an organization that is.
Many leaders jump straight in, wanting to get a plan in place and cash running through the business. And indeed it is tempting just to jump straight in, take control and get things moving. But very quickly, successful, growing organizations will hit two crisis points one after the other and probably in rapid succession. The first is a crisis of control and the second is a crisis of complexity. Both crises can derail the organization and force it to lose its way, its purpose in life. This is largely why, early on in an organization’s existence, successful leaders spend time, with as many people as possible in the organization, defining why the organization exists, what it aims to look like in the long-term and how the organization and those who work within it, will behave.
Without this work, it’s very easy for an organization to unravel and lose, quite simply, its sense of purpose. Losing sense of purpose is one step towards the corporate grave. Indeed, research tells us that leaders of organizations that spend time on this work have operations that generally out-perform those that do not.
And we must not think that this is an activity just reserved for the top-level CEO – effective leaders of business areas sitting below the top management layers will take the corporate message and craft a supporting one that directly meets the needs of their own operational areas.
So just how does one go about defining why an organization exists, where it aims to be and how it will act and behave? Well, there are three tools or approaches that together we can use. I’m referring to Mission Statements, Vision Statements and Values Statements. The message in this briefing is that every effective leader (no matter at what level in the organization) must know how to use these approaches to create a unified, long-term, sense of direction. Indeed, we hold here that there’s not much point even in starting the strategy and business planning processes unless you have crafted this binding long-term message.
Three Core Tools
So let’s have a look at these three tools in more detail.
Tool #1: The Mission Statement
The role of the mission statement is to define the purpose of the organization or why it exists, typically by spelling out in one or two sentences what the organization does for its customers. It’s important to realise that the primary audience for the mission statement – the people that will use it – is the organization’s employees. So it’s used mainly internally to give direction and to set very broad boundaries.
Tool #2: The Vision Statement
If the primary audience for the mission statement is internal, then the vision statement is for broader consumption – including the organization’s customers and other external stakeholders that include suppliers, distributors and even regulators. Again, the vision statement must be to the point, snappy and meaningful.
The real role of the vision statement is to take a medium to long-term look at what the organization wants to be and it presents a target (usually in words, not numbers) of where the organization is aiming to be between 5 to 10 years from now.
Together, the mission and vision statements must:
• Guide decision-making at all levels
• Provide a common set of goals and behaviours
• Act as a foundation for strategic thinking and action
• Set out a long-term term, challenging objective
• Define the areas where the organization does and does not operate in
• Assist other leaders in the organization to help them craft their own statements for their individual areas of operation.
• Create trust between the organization and all of its stakeholders.
Whilst these tools, if properly used and created, do help to set out a common purpose and set of behaviours, more work is usually required in the area of behaviour which is why most organizations also have a values statement.
Tool #3: The Values Statement
The values statement – usually a list of around five core values or behaviours – sets out to define the ‘character’ of the organization and how employees can make that character a reality when they work within the organization.
The real problem is that in many cases the mission, vision and values statements that organizations craft don’t achieve what they set out to achieve – they seem to degenerate into dull, theoretical, academic statements that could apply just to any organization. Critically, these tools must encourage engagement and inspire their audiences. If they don’t, they will have failed and management will have missed a real opportunity.
So, here are some examples of great mission statements:
Mission: ‘To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time’
Mission: ‘To organise the world’s information and make it universally accessible and useful’
Note that the statements are:
• Clear and crisp. Easily understood by everyone. These statements are attractive to employees as well as customers
• Straightforward. In simple terms, they define the purpose of the organization
• Indications of how the organization behaves or the ‘character’ of the organization.
Turning to vision statements, arguably the most famous is that of John F Kennedy – the mission statement that drove the programme to get a man on the moon:
‘Land a man on the moon and return him safely to earth before the end of the decade’
Amazon provides us with another example of a great vision statement:
‘Our vision is to be earth’s most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.’
But it’s typically when we get to value statements that we find the real problem. Value statements are just like strategy. In fact they are an essential part of strategy as they help to define how the organization is different – in the most important way – through the people that work for the organization and make it come to life. It’s important to remember that the values of an organization – or its culture – are the organization’s enduring source of competitive advantage. Products come and go, but in unpredictable times, a relevant, unique set of values, coupled with distinctive skills, can help to ensure survival.
Now look at this values statement
‘Always doing the right thing’
‘To always remember the customer’
‘To innovate and continuously improve everything we do’
‘To always collaborate and work as one team’
True, these are noble and well-founded values – but they could apply to any organization. The main point here is to use the values statement as part of your long-term strategy – a point of differentiation – a point of uniqueness.
Just contrast the above values statement with an extract from Starbuck’s values:
We’re called partners, because it’s not just a job, it’s our passion. Together, we embrace diversity to create a place where each of us can be ourselves. We always treat each other with respect and dignity. And we hold each other to that standard.
When we are fully engaged, we connect with, laugh with, and uplift the lives of our customers – even if just for a few moments. Sure, it starts with the promise of a perfectly made beverage, but our work goes far beyond that. It’s really about human connection.’
Some Golden Rules
When you tackle the task of creating mission, vision and values statements do:
• Be democratic and involve the organization. This isn’t a job just for the top management team.
• Ensure that the output is challenging and motivational.
• Ensure that the result includes a long-term goal – what your organization will be like in 10 years’ time.
• Take time to ensure that the output is easy to understand – a guide for behaviour and decision-making.
• Focus on uniqueness – these statements are an essential element – the foundation stone – of your organization’s strategy.
• Exclude ‘management speak’.
• Are short and sharp.
• Remember the customer!
And with particular reference to value statements:
• Ensure that the values make your vision come to life.
• The values must reflect your core strengths.
• Insist that your values show how the organization is different from the competition.
• Your values must embrace all key stakeholders.
A Final Question
One question that frequently occupies my mind is ‘do we have one statement too many?’
Whilst, if we are going to be technically correct, we need three statements (mission, vision and values), is this all a bit too confusing, a bit too theoretical? My answer to that question is ‘yes’. I’m all for simplicity, especially in terms of communication and my view is that one can combine mission and vision into one statement that I’ll call the vision statement. If we do this, we must ensure that the statement embraces two essential elements – one drawn from the mission statement and the other from the traditional vision statement. From the mission statement we have to take what the organization does (its ‘purpose’); from the traditional vision statement we have to take a long-term target.
If we look again at Amazon’s vision statement we can see that it achieves both these objectives:
‘Our vision is to be earth’s most customer centric company[THE TARGET]; to build a place where people can come to find and discover anything they might want to buy online [THE PURPOSE].’
So before you start this year’s business planning cycle, do ensure that your organization’s purpose is clearly defined.