Business Terms
Vision
Mission
Vision v Mission
An aspirational description of what an organization would like to achieve or
accomplish in the mid-term or long-term future. It is intended to serves as a
clear guide for choosing current and future courses of action. See also
mission statement.
A written declaration of an organization's core purpose and focus that
normally remains unchanged over time. Properly crafted mission statements
(1) serve as filters to separate what is important from what is not,
(2) clearly state which markets will be served and how, and
(3) communicate a sense of intended direction to the entire organization.
A mission is different from a vision in that the former is the cause and the
latter is the effect; a mission is something to be accomplished whereas a
vision is something to be pursued for that accomplishment. Also called
company mission, corporate mission, or corporate purpose.
Mission Statement
A mission statement has a more 'present day' focus and really describes how
a company plans on achieving its objectives. This is really a statement to
employees, shareholders, and others with an interest in the organization that
clearly articulates what an organization is doing, how it's going to do it, and
ultimately why it's doing it.
For many small businesses this can seem like a trivial item but large
organizations spend countless hours, meetings, and dollars considering their
mission statement and its significance. Changing a company's mission
statement can be a major undertaking with numerous consultations and even
external advisors being hired. For any growing business this should underline
the significance of creating an effective mission statement, particularly when
it's not part of the business model (or not possible) for the owner to
personally convey the companies mission to everyone.
The key questions to answer in a mission statement include:
• What does the organization do?
• Who does the organization service (i.e. customers)?
• What benefit does the organization provide?
Vision Statement
A vision statement has more to do with the future and really describes what
an organization plans or hopes to be in the future. This is more of an
inspirational or motivational statement that is meant to drive employees and
also clearly demonstrate an organizations goals to stakeholders (customers,
investors, etc.).
A vision statement shouldn't really discuss the present state of the
organization but more what the organization wants to be and how it wants to
be viewed. To be effective the message should be clear, optimistic, and of
course realistic. An unrealistic vision statement, i.e. a corner store owner
saying that in five years the company will be bigger than Walmart, won't be
motivating or inspirational but end up being comical.
The key questions to answer in a vision statement include:
• Where does the organization want to be in 5 years or 10 years?
• How do we want to get there?
Framework
Strategy
Directive
Policy
Standard
Procedure
Guideline
Practice
Process
Vision Statement vs. Mission Statement
When considering a mission statement vs. a vision statement the key aspect
to remember is the current vs. future context. A mission statement is where
you are and why you do it, a vision statement is where you are going to be
and how you want to get there. While these may seem like soft topics it can
be very important to ensure that the mission and vision of an organization or
company's leadership is clearly conveyed to the people who need to know it.
Employees, shareholders, and other stakeholders can be provided with quick
answers to how an organization views itself and where it plans on being in
the future. Conveying this message to them in two well thought out
statements can be a very useful communication and governance tool.
Broad overview, outline, or skeleton of interlinked items which supports a
particular approach to a specific objective, and serves as a guide that can be
modified as required by adding or deleting items.
1. A method or plan chosen to bring about a desired future, such as
achievement of a goal or solution to a problem.
2. The art and science of planning and marshalling resources for their most
efficient and effective use. The term is derived from the Greek word for
generalship or leading an army.
To formulate a Strategy a good starting point is the 4 P’s
• Perspective – have a clear vision and focus
• Position – stake a clearly defined stance
• Plan – form a precise notion of how the organisation should develop
itself
• Pattern – maintain consistency in decisions and actions
Formal and usually mandatory executive order or official pronouncement on
a policy or procedure, or one which encourages or discourages some activity.
The set of basic principles and associated guidelines, formulated and
enforced by the governing body of an organization, to direct and limit its
actions in pursuit of long-term goals. See also corporate policy.
Universally or widely accepted, agreed upon, or established means of
determining what something should be. Major classifications of this term
include:
(1) Material or substance whose properties are known with a level of
accuracy that is sufficient to allow its use as a physical reference in calibrating
or measuring the same properties of another material or substance.
(2) Concept, norm, or principle established by agreement, authority, or
custom, and used generally as an example or model to compare or measure
the quality or performance of a practice or procedure.
(3) Written definition, limit, or rule approved and monitored for compliance
by an authoritative agency (or professional or recognized body) as a
minimum acceptable benchmark.
A fixed, step-by-step sequence of activities or course of action (with definite
start and end points) that must be followed in the same order to correctly
perform a task. Repetitive procedures are called routines. See also method.
Recommended practice that allows some discretion or leeway in its
interpretation, implementation, or use.
A method, procedure, process, or rule used in a particular field or profession;
a set of these regarded as standard.
Sequence of interdependent and linked procedures which, at every stage,
consume one or more resources (employee time, energy, machines, money)
to convert inputs (data, material, parts, etc.) into outputs. These outputs then
serve as inputs for the next stage until a known goal or end result is reached.
Function
Management
Controls
Goals
Objectives
Objective
Subjective
An action performed by a device, department, or person that produces a
result. Function remains more or less fixed whereas the purpose (which
indicates intention or objective) generally changes. For example, the function
of a hammer is to strike something nearby whereas its purpose (what to
strike and why) could be anything the hammer-wielder has in mind.
A management function aimed at achieving defined goals within an
established timetable, and usually understood to have three components:
(1) setting standards,
(2) measuring actual performance, and
(3) taking corrective action.
A typical process for management control includes the following steps:
(1) actual performance is compared with planned performance,
(2) the difference between the two is measured,
(3) causes contributing to the difference are identified, and
(4) corrective action is taken to eliminate or minimize the difference.
An observable and measurable end result having one or more objectives to
be achieved within a more or less fixed timeframe.
For further explanation, see Goals vs. Objectives - Using Both to Get Where
You Want to Go at InvestorWords.com.
A specific result that a person or system aims to achieve within a time frame
and with available resources.
In general, objectives are more specific and easier to measure than goals.
Objectives are basic tools that underlie all planning and strategic activities.
They serve as the basis for creating policy and evaluating performance. Some
examples of business objectives include minimizing expenses, expanding
internationally, or making a profit.
Objective refers to the elimination of subjective perspectives and a process
that is purely based on hard facts.
Neutral (bias free), relating to, or based on verifiable evidence or facts
instead of on attitude, belief, or opinion. Opposite of subjective.
Based on (or related to) attitudes, beliefs, or opinions, instead of on verifiable
evidence or phenomenon. Contrasts with objective.
Subjective refers to personal perspectives, feelings, or opinions entering the
decision making process.
Goals vs Objectives – What’s the Difference?
Both are a Way of Moving Forward
The major similarity between goals and objectives is that the both involve forward motion, but accomplish
it in very different ways. We can think of goals as being the Big Picture — where we hope that our efforts
will ultimately bring us. Objectives are about a specific plan of attack — usually a series of them — each
being relatively short-term in nature.
Goals: Changing Mindset and Direction
Goals tend to be long on direction, and short on specific tactics. For example, you can set a goal of losing 30
pounds without having a specific plan as to how to do it. You’ve defined the destination you want to arrive
at, and tactics can be developed as you move forward.
We can think of a goal as doing the following:
•
•
•
•
Defines the destination
Changes the directon to move toward the destination
Changes the mindset to adjust to and support the new direction
Creates the necessity to develop specific tactics
Goals tend to change your mindset by changing your focus. And as your focus changes, it takes your
thinking with it. This is why goals are often accompanied by affirmations, which involve projecting yourself
into the desired (but as yet unattained) destination.
People set goals all the time, without ever being very specific. Organizations do it too. A company can set a
goal of returning to profitability in two years, or becoming the leader in their industry in five years, all
without ever determining how that will be accomplished.
And once again, the details are worked out later, after the big picture changes of direction and destination
— or goals — have been changed and defined.
Objectives: Establishing a Series of Concrete Steps
If goals are about the big picture, then objectives are all about tactics. Mechanically, tactics are action plans
to get from where you are to where you want to be. A goal defines the direction and destination, but the
road to get there is accomplished by a series of objectives.
A good example of this is a person who owes $50,000 in credit card debt on ten different cards and wants
to become debt-free. Getting out of debt is the goal. But it is achieved by paying off each of the ten credit
cards, one at a time. The payoff of each credit card is an objective — the series of smaller targets that need
to be hit in order to achieve the big picture goal of becoming debt-free.
The methodology for paying off each credit card will be very specific — i.e., you’ll need to pay X amount of
extra money to Credit Card #1 for Y number of months in order to meet the objective of paying it off. Then
you need to repeat the action for the remaining nine credit cards. The tactics — which are the objectives —
are very specific.
How Objectives Can Help You Reach Your Goals
In nearly any goal you want to reach you can use the credit card example to help you get there. First, you
define the goal — whatever it may be. Unless the goal is a small one and easily obtained, it’s usually best to
break big goals down to a series of specific action steps — it’s a way of using the divide-and-conquer
strategy to accomplish a goal that’s far too large to do in the near term.
The action steps have specific targets, as well as methods to reach them. Each target is an objective. Once
it’s accomplished you move on to the next one, gradually moving toward your goal as each target is
completed.
Though goals generally control objectives, objectives can also control goals as they unfold. For example,
since a goal is general in nature, it may be refined and altered as objectives are completed. The completion
of an objective or a series of them, could cause you to either raise or lower the ultimate goal.
In this way goals and objectives can complement each other.
Goals
Objectives
Definition
Something which you try to
achieve
A specific result that
a person or system aims to achieve within a time
frame and with available resources.
Time Frame
Usually long-term.
A series of smaller steps, often along the way to
achieving a long-term goal.
Magnitude
Typically involves life changing
outcomes, like retiring, buying a
home or making a major career
change.
Usually a near-term target of a larger expected
outcome, such as passing a course as part of
completing a degree program.
Outcome of
immediate action
Actions tend to advance progress
in a very general sense; there is
often awareness that there are
several ways to reach a goal, so
specific outcomes aren’t
necessary.
Very specific and measurable, a target is established
and victory is declared only when the target is hit.
Purpose of action
A goal if often characterized as a
change of direction that will
ultimately lead to a desired
outcome.
Objectives tend to be actions aimed at accomplishing
a certain task.
Example
“I want to retire by age 50”
“In order to reach my goal of retiring at age 50, I need
to save $20,000 by the end of this year”
Hierarchy
Goals tend to control objectives;
a change in a goal could eliminate
one or more objectives, or add
new ones.
An objective can modify a goal, but will seldom
change it in a fundamental way, even if the objective
isn’t reached.