1. Chapter 2 Santiago Ibarreche © S. Ibarreche 2015 1

2.  Same questions about success: 1. Do we know where we want to go? 2. Do we know how are we going to get there? 3. Do we have the environmental conditions (both internal and external) to get there? © S. Ibarreche 2015 2

3.  “The vision statement is the picture a leader paints of his or her firm's future--essentially, what the firm will look like five years down the road.  The vision, along with the responsibility of implementation, is the linchpin of the entire business plan.  But key players in the firm must be willing and able to step forward, act in unison, and show the discipline necessary to implement the steps that will move the firm forward.”  Source: Goodale, M., “Developing a Solid Business Plan”, Civil Engineering, Nov. 2001, 71:11, p. 74-75 © S. Ibarreche 2015 3

4.  Other definitions:  - to create a vision people must “describe with mental pictures what the organization wants to be in the future; identify the overall direction of the organization, and create a feeling of movement toward the desired future.” (Source: Zuckerman, A. M., “Creating a Vision for the Twenty-First Century Healthcare Organization”, Journal Of Healthcare Management 45:5 September / October 2000)  “Leaders passionately believe that they can make a difference. They envision the future, creating an ideal and unique image of what the organization can become. Through their magnetism and quiet persuasion, leaders enlist others in their dreams. They breathe life into their visions and get people to see exciting possibilities for the future.” (Source: Kouzes, J. M. and B. Z. Posner, “The Leadership Challenge”, 4th Ed., Jossey- Bass, 2007) © S. Ibarreche 2015 4

5.  A vision is a precursor of a mission.  A mission includes the definition of what the organization is and what it does.  The elements of a mission statement are important and they express the reasons an organization exists.  The main importance of a mission statement is that it represents a series of commitments of the organization to different stakeholders. © S. Ibarreche 2015 5

6.  Three groups of elements: 1. What the organization does, 2. the definition of What is unique and different about the organization, and 3. the definition of Why the organization exists © S. Ibarreche 2015 6

7.  Wants and needs that are fulfilled  Organizations exist, survive and thrive if society allows them to do so.  An organization fulfills needs or wants of members of the society where it functions.  What it means and What it does not mean:  Finding the need or want so we can develop the means of satisfaction  NOT the product or service (Railroad, Newspaper, Phone, etc.) which is only a temporary mean for that satisfaction  Potential Source of Competitive Advantage © S. Ibarreche 2015 7

8.  People whose wants and needs are satisfied  We want to know what makes people buy or use our products and services because: create 1. We want to create better products and services that satisfy their needs better, preserve 2. We want to preserve the features or characteristics of the product and service that makes people come back to our business. anticipate 3. We want to be able to anticipate changes in the marketplace because of: new technologies, different economic condition, changes in demographics, or other aspects of the environment. understand 4. We need to understand who uses the product and/or service and who make the purchasing decision. make our competitive advantage sustainable 5. We want to make our competitive advantage sustainable. © S. Ibarreche 2015 8

9.  Where and how needs and wants are satisfied  Is important for:  determining and allocating resources.  defining strategies.  clarifying the type of market in which we will operate. The Five Ps of marketing  Establishing a better supply chain management  Its dimensions are:  potential consumers  extension of the product line and possible growth alternatives.  capacity for the creation or addition of value, and  logistic elements of the procurement, warehousing, and distributing processes. © S. Ibarreche 2015 9

10.  How do we do what we do  Effect of Technologies: Existing Future Capacity to adapt  What makes the organization unique in adding value through the way we do things  Examples:  Internet  New forms of competition  Business models of Technology companies © S. Ibarreche 2015 10

11.  Uniqueness in competition  What makes us different from other organizations in the marketplace.  Create a sustainable competitive advantage  create, develop, and consolidate this advantage or advantages by being unique.  Sources of Uniqueness (VRIO):  Value,  Rareness,  difficulty in Imitation,  Organization © S. Ibarreche 2015 11

12.  Internal Uniqueness  Sources  people,  material resources,  technical resources,  accumulated knowledge,  organizational and management capabilities;  however, even if the best of each category came together, uniqueness may not come to fruition if the wrong organization is present. © S. Ibarreche 2015 12

13.  Self Concept  Definition of who the organization is  Unified concept  Prioritization  “Identity Crisis”  Identification of Process with Purpose © S. Ibarreche 2015 13

14.  External Image  “perception is reality”.  Influence of media  Amount of images  Problem with lack of Capacity to be awestruck  External image can also be purposely created by projecting it through deliberate actions in the community or in the environment.  Research on effect of image with handicapped  Examples:  Tylenol  Exxon © S. Ibarreche 2015 14

15.  Philosophy  Etymologically (the origin of words) speaking “philosophy” means “love of truth” in Greek.  “Concept of truth”:  “core values” or “philosophy”.  Values are not necessarily common to all societies  Culture (expectations of behavior) is influenced by what is valued by society © S. Ibarreche 2015 15

16.  Concern for People  Societies allow organizations to exist as long as they fulfill some need or want of the individuals who are part of that society  People who interact with any organization want to feel satisfaction that goes beyond their individual needs.  Organizations that do not participate in solving the problems of society at large tend to isolate themselves.  Reciprocity in the relationship with society  CSR © S. Ibarreche 2015 16

17.  Other Stakeholders  The need to be vigilant in an organization  Potential effects of the actions of expected and unexpected players:  Political groups  Religious groups  Competition  Social groups  Problems with societal problems such as Xenophobia, Racisms, Extremism © S. Ibarreche 2015 17

18.  Definition of Quality  More than a decade ago, Phil Crosby noted that, “Quality has much in common with sex. Everyone is for it (under certain conditions, of course.) Everyone feels they understand it (even though they would not want to explain it.) Everyone thinks execution is only a matter of natural inclinations (after all, we do get along somehow,) and, of course, most people feel that all problems in these areas are caused by other people. (If only they would take time to do their things right the first time.)”  Main element for defining quality:  Customer and Stakeholder Focus  Process Orientation  Continuous Improvement and Learning  Empowerment and Teamwork  Managing by Fact  Visionary Leadership and Strategic Orientation © S. Ibarreche 2015 18

19. © S. Ibarreche 2015 19  Define the 12 elements  Look for duplication or overlapping  Prioritize  Try it and write it down  Show it to potential users  Admit criticism  Promulgate

20.  The mission statement of an organization has several purposes. 1. It focuses on the internal processes by unifying the definition and scope of actions of the organization. 2. It helps in the assignments of resources and responsibilities by prioritizing different aspects of the organization. 3. It establishes a commitment with internal and external constituents as to what they can expect from the organization. 4. A mission statement creates unanimity of purpose and commonality of values. 5. Mission statements allow people to understand the role of organizations in society.  Defining a mission statement should be a detailed and meticulous exercise.  It constitutes the basis for creating the strategies of the organization and their evaluation as to how successful (or not) they are © S. Ibarreche 2015 20