Strategic Management: Value Creation, Sustainability, and Performance, 3e, 2014 Strategic Direction: Vision, Mission, Values Chapter 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 statement33 Vision statement18 Principles or Values statement27 MVP – all three statements5 Practice in Fortune 500 Companies (Source: West, 2014)

Diversification – many business units Complexity of developing statements  Often involving entire company Requires deep understanding, making choices, and commitment to focus Indirect connection with performance Possible Reasons for Low Usage

Incorporate foresight Provides an "event horizon" Connects with current capabilities Incorporates enduring values Is short Is memorable Vision Statement Image 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 Statement Short ? Simple ? Company Specific ? 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 Vision To be the model for physician-led health care in America Our Mission To be your Medical Home Our Values As a physician owned and directed company, we are committed to ensuring that patient care is patient centered, safe, equitable, effective, efficient, and timely