Strategic Management: Value Creation, Sustainability, and Performance, 3e, 2014

Strategic Direction: Vision, Mission, ValuesChapter 3

1. How vision and mission statements provide effective strategic direction.

2. Process for developing vision statement.

3. Steps in developing effective mission statement.

4. Techniques for communicating vision and mission.

5. How principles and values can lead to superior performance.

Learning Objectives

Many different departments and functions

Many levels from executives down to workers

Employees desire work to be meaningful

Different perspectives on the company and the market

Differences of opinion throughout the organization

Many ways of approaching the market

Need for Coordination and Coherence

Strategy Planning Hierarchy

Vision What we want the company to

become

Mission How the company competes in the

present

Principles The moral and ethical foundations for

the conduct of the company's business activities (both internal and external)

Guiding Statements

% Using

Mission statement 33Vision statement 18Principles or Values statement 27

MVP – all three statements 5

Practice in Fortune 500 Companies

(Source: West, 2014)

Diversification – many business units

Complexity of developing statements

Often involving entire companyRequires deep understanding,

making choices, and commitment to focus

Indirect connection with performance

Possible Reasons for Low Usage

Incorporate foresightProvides an "event horizon"

Connects with current capabilities

Incorporates enduring values

Is shortIs memorable

Vision StatementImage of

the Future

Continuity with

the Present

Useful

Rubbermaid, 1990 "Aisle of Rubbermaid" in every store

JFK, 1961 "Put a man on the moon and return

him safely to earth"

Jeff Bezos, Cadabra.com, 1994: "Biggest bookstore" in the world

Memorable Visions

1. What do we hold to be true & meaningful, factors that should never change?

2. Why is our work meaningful? 10 years from now, what will we be proud of?

3. What are we particularly good at doing?

4. What compelling changes & opportunities should we seek to take advantage of?

5. Where will we be in 10 years?

Developing the Vision

Captures immediate purpose of the company and its unique way of fulfilling that purpose

Short Simple Company specific Actionable Measurable

Mission Statement

"Guided by relentless focus on our five imperatives, we will constantly strive to implement the critical initiatives required to achieve our vision. In doing this, we will deliver operational excellence in every corner of the Company and meet or exceed our commitments to the many constituencies we serve. All of our long-term strategies and short-term actions will be molded by a set of core values that are shared by each and every associate."

(Grocery Store Chain)

Poor Mission StatementShort ?

Simple ?

CompanySpecific ?

Actionable ?

Measurable ?

Increasingly expected by stakeholders

Usually articulates beliefs of senior management

Challenge is for employees to internalize espoused values

Each principle must be defined & explained

Management must regularly & continuously reinforce the principles, in word and deed

Statement of Principles (Values)

BB&T Principles"10 core values represent our over-arching beliefs. Values provide the context for how we make decisions. Values enable us, as individuals, to live, be successful and achieve happiness. At BB&T, our values enable us to achieve our mission and corporate purpose."

Comprehensive Example

Our VisionTo be the model for physician-led health care in America

Our MissionTo be your Medical Home

Our ValuesAs a physician owned and directed company, we are committed to ensuring that patient care is patient centered, safe, equitable, effective, efficient, and timely