VISION STATEMENT ERIKA S. NICOLAS,MBA REB Vision Statement "A business is not defined by its name, statutes, or articles of incorporation. It is defined by the business mission. Only a clear definition of the mission and purpose of the organization makes possible clear and realistic business objectives." —Peter Drucker Vision Statement • A vision statement should answer the basic question, “What do we want to become?” • A clear vision provides the foundation for developing a comprehensive mission statement. Vision Statement • Many organizations have both a vision and mission statement, but the vision statement should be established first and foremost. A Good Vision Statement • short – two sentences at an absolute maximum. • specific to your business and describe a unique outcome that only you can provide. • Do not use words that are open to interpretation. A Good Vision Statement • Keep it simple enough for people both inside and outside your organization to understand. • It should be ambitious enough to be exciting but not too ambitious that it seems unachievable. • It needs to align to the Values that you want your people to exhibit as they perform their work. Examples of a Vision Statement • General Motors’ vision is to be the world leader in transportation products and related services. (Author comment: Good statement) Examples of a Vision Statement The vision of First Reliance Bank is to be recognized as the largest and most profitable bank in South Carolina. (Author comment: This is a very small new bank headquartered in Florence, South Carolina, so this goal is not achievable in five years; the statement is too futuristic) Examples of a Vision Statement • PepsiCo’s responsibility is to continually improve all aspects of the world in which we operate—environment, social, economic— creating a better tomorrow than today. (Author comment: Statement is too vague; it should reveal beverage and food business) Examples of a Vision Statement • Royal Caribbean’s vision is to empower and enable our employees to deliver the best vacation experience for our guests, thereby generating superior returns for our shareholders and enhancing the wellbeing of our communities. (Author comment: Statement is good but could end after the word “guests”) Examples of a Vision Statement Samsonite’s vision is to provide innovative solutions for the traveling world. (Author comment: Statement needs to be more specific, perhaps mention luggage; statement as is could refer to air carriers or cruise lines, which is not good) Examples of a Vision Statement Dell’s vision is to create a company culture where environmental excellence is second nature. (Author comment: Statement is too vague; it should reveal computer business in some manner; the word environmental is generally used to refer to natural environment so is unclear in its use here) MISSION STATEMENT • An enduring statement of purpose that distinguishes one organization from other similar enterprises. • The mission statement is a declaration of an organization’s “reason for being.” It answers the pivotal question “What is our business?” MISSION STATEMENT • Sometimes called a creed statement , a statement of purpose, a statement of philosophy, a statement of beliefs, a statement of business principles, or a statement “defining our business,” • a mission statement reveals what an organization wants to be and whom it wants to serve. A business mission is the foundation for priorities, strategies, plans, and work assignments. It is the starting point for the design of managerial jobs and, above all, for the design of managerial structures. Nothing may seem simpler or more obvious than to know what a company’s business is. A steel mill makes steel, a railroad runs trains to carry freight and passengers, an insurance company underwrites fire risks, and a bank lends money. – PETER DRUCKER Literatures about Mission Statement • Rarick and Vitton found that firms with a formalized mission statement have twice the average return on shareholders’ equity than those firms without a formalized mission statement have • Bart and Baetz found a positive relationship between mission statements and organizational performance; • BusinessWeek reports that firms using mission statements have a 30 percent higher return on certain financial measures than those without such statements; Benefits of a vision and mission statements King and Cleland recommend that organizations carefully develop a written mission statement in order to reap the following benefits: 1. To ensure unanimity of purpose within the organization 2. To provide a basis, or standard, for allocating organizational resources 3. To establish a general tone or organizational climate 4. To serve as a focal point for individuals to identify with the organization’s purpose and direction, and to deter those who cannot from participating further in the organization’s activities Benefits of a vision and mission statements 5. To facilitate the translation of objectives into a work structure involving the assignment of tasks to responsible elements within the organization 6. To specify organizational purposes and then to translate these purposes into objectives in such a way that cost, time, and performance parameters can be assessed and controlled. Developing a vision and mission statement • Select several articles about these statements and ask all managers to read these as background information. • Ask managers themselves to prepare a vision and mission statement for the organization. Developing a vision and mission statement • A facilitator, or committee of top managers, should then merge these statements into a single document and distribute the draft statements to all managers. • A request for modifications, additions, and deletions is needed next, along with a meeting to revise the document. Characteristics of a Mission Statement 1. A Declaration of Attitude It usually is broad in scope for at least two major reasons. First, a good mission statement allows for the generation and consideration of a range of feasible alternative objectives and strategies without unduly stifling management creativity. A mission statement needs to be broad to reconcile differences effectively among, and appeal to, an organization’s diverse stakeholders , the individuals and groups of individuals who have a special stake or claim on the company. Thus a mission statement should be reconciliatory . 2. A Customer orientation A good mission statement reflects the anticipations of customers. MISSION STATEMENT The following utility statements are relevant in developing a mission statement: • Do not offer me things. • Do not offer me clothes. Offer me attractive looks. • Do not offer me shoes. Offer me comfort for my feet and the pleasure of walking. • Do not offer me a house. Offer me security, comfort, and a place that is clean and happy. • Do not offer me books. Offer me hours of pleasure and the benefit of knowledge. MISSION STATEMENT • Do not offer me CDs. Offer me leisure and the sound of music. • Do not offer me tools. Offer me the benefits and the pleasure that come from making beautiful things. • Do not offer me furniture. Offer me comfort and the quietness of a cozy place. • Do not offer me things. Offer me Offer me ideas, emotions, ambience, feelings, and benefits. • Please, do not offer me things. 9 ELEMENTS OF M/S 1. Customers—Who are the firm’s customers? 2. Products or services—What are the firm’s major products or services? 3. Markets—Geographically, where does the firm compete? 4. Technology—Is the firm technologically current? 5. Concern for survival, growth, and profitability—Is the firm committed to growth and financial soundness 9 ELEMENTS OF M/S 6. Philosophy —What are the basic beliefs, values, aspirations, and ethical priorities of the firm? 7. Self-concept —What is the firm’s distinctive competence or major competitive advantage? 8. Concern for public image —Is the firm responsive to social, community, an environmental concerns? 9. Concern for employees —Are employees a valuable asset of the firm?