DIRECTION SETTING:
VISIONS, MISSIONS, VALUES,
AND OBJECTIVES
Payne
(2)
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Strategic Leadership
• Strategic Leadership is:
– “the ability to anticipate, envision, maintain flexibility
and empower others to create strategic change as
necessary”
or
– “the process of transforming organizations from what
they are to what the leader would have them become.”
2
Primary Tasks of Strategic Leaders
(4+2 Formula)
• Leaders (top managers) have four Primary tasks:




Strategy
Culture
Structure
Execution
• Secondary tasks (do 2 of 4) include:




Finding and Retaining Talent
Innovate
Ensure Adaptive Leadership
Develop Useful Partnerships (Mergers/Alliances)
3
Strategic Leadership and the Strategic
Management Process
Strategic
Leadership
shapes the formulation of
Strategic Intent
Strategic Mission
and
influences
Strategic Actions
4
Determining Strategic Direction
• Strategic direction setting refers to the
development of roadmap or set of guidelines
that help strategists make key organizational
decisions.
• Generally, there are four types:
–
–
–
–
Vision
Mission
Values
Goals / Objectives
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What is a Vision?
“An articulation of what the company wishes to become
or where it seeks to go” or, “the firm’s aspirations of
what it really wants to be…designed to capture the
imagination of the firm’s people and galvanize their
efforts to achieve a higher purpose.”
• Visions often describe organizations in a lofty, even
romantic or mystical tone – and “expression of hope”.
• Four attributes of “good” visions:
1) Idealism
2) Uniqueness
A well-conceived strategic vision:
3) Future Orientation  Guides managerial decision-making
 Arouses employee buy-in and commitment
4) Imagery
 Prepares a company for the future
•
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What is a Mission?
• “A mission statement is more a statement of corporate
purpose, and often defines the area of business in
which it competes.”
• “Captures the organization’s distinctive purpose or
reason for being.”
• Or, “Describes the firm or organization in terms of its
business. Mission statements answer the questions,
‘What business are we in?’ and ‘What do we intend to
do to succeed?’ …[they] are more concrete than
visions, but still do not specify the goals and objectives
necessary to translate the mission into reality.”
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Mission Statements
• Encompasses both the purpose of the company as well as the
basis of competition and competitive advantage. Should
answer, “What is unique about our organization?”
• More specific, focused, and concrete than the vision.
• Employees are usually the most important audience for
mission statements.
• Components:
1) Should explicitly target customers and market.
2) Should indicate the principal products and/or services provided by
the organization.
3) Should specify the geographical area of concentration.
“Writing a mission statement is important;
however, living it is more important.”
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Value Statements
Values are the things organizations and people stand for or the
fundamental principles that, along with the mission, make an
organization unique. Usually associated with ethical behavior and
social responsibility.
Questions for discussion:
1) Why are value statements important (or not)?
2) Are value statements (or codes of ethics) simply impression
management devices?
3) How do you get employees to exhibit behaviors that reflect the
stated values of the organization?
4) Can creating organizational virtue (i.e., integrity, courage,
empathy, conscientiousness, warmth, and zeal) create a
competitive advantage for your organization?
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Goals & Objectives
• Follows Vision & Mission to more specifically give
direction and goals for the organization. These also
serve to determine if appropriate control is been set
for strategic decisions:
 Represent
commitment to achieve specific
performance targets by a certain time.
 Must
be stated in quantifiable terms and contain a
deadline for achievement.
 Spell-out
how much of what kind of performance
by when.
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Types of Objectives (Controls) Required
Financial Objectives
Strategic Objectives
Outcomes focused on
Outcomes focused on
improving a firm’s
improving a firm’s
financial performance. competitiveness and its
long-term business
position.
Every company needs both strategic and
financial objectives!
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Strategic vs Financial Objectives
•
Pressures for better short-term (~1 yr) financial
performance become pronounced when
–
–
–
•
Firm is struggling financially
Resource commitments for new strategic initiatives may
hurt bottom-line for several years
Proposed strategic moves are risky
A firm that consistently passes up opportunities
to strengthen its long-term (3-5 yrs) competitive
position
–
–
–
Risks diluting its competitiveness
Risks losing momentum in its markets
Can hurt its ability to fend off rivals’ challenges
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Objectives Are Needed at All Levels
Process is top-down, not bottom-up!
1. First, establish organization-wide objectives
2. Next, set business and product line objectives
3. Then, establish functional and departmental
objectives
4. Individual objectives come last
Objective-setting needs to be more of a top-down than a bottomup process in order to guide lower-level managers and
organizational units toward outcomes that support the
achievement of overall business and company objectives.
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