Vision, Mission and Objectives - Mastering Strategic Management - 1st Canadian Edition (2023)

Good business leaders create a vision, articulate it, passionately own the vision, and relentlessly drive it to realization.

—Jack Welch, former CEO of General Electric

Many competencies and skills separate effective strategic leaders like Howard Schultz from poor strategic leaders. One is the ability to inspire employees to work hard to improve the performance of your organization. Effective strategic leaders can convince employees to embrace big ambitions and move the organization forward. By contrast, weak strategic leaders struggle to rally their people and channel their collective energy in a focused, positive direction.

As the Jack Welch quote suggests, ais a key tool available to executives to inspire people in an organization (Figure 2.2 “Overview: Organizational Vision”🇧🇷 The vision of an organization describes what the organization hopes to become in the future. Well-constructed visions clearly articulate an organization's aspirations. Google's mission is to organize the world's information and make it universally accessible and useful (Edwards, 2012). Google expands on its mission by listing "Ten Things We Know," including "Focus on the user and everything else will follow," "It's better to do one thing really, really well," and "Fast is better than slow" (Google Inc. , 2014).

This brief but powerful statement emphasizes several important goals for Google, including excellence in customer service and setting high standards for Google employees and products. The mission of the McDonald's brand is “to be our customers' favorite place and way to eat. Our global operations are aligned around a global strategy called Plan to Win, focused on an exceptional customer experience: people, products, place, price and promotion. We are committed to continually improving our operations and improving the experience for our customers.” To be effective, this mission statement must reach all employees and inspire them to embrace that mission. (Edwards, 2012).

One limitation of these general objectives is that frontline and operational employees will not relate or connect with the objectives and will be disengaged from the process: the flavor of the month…. The CEO/management team that can effectively translate high-level goals into on-site activities will do well to get the team involved! Of course, management also requires a strong element of walk-the-talk.

The results of a survey of 1,500 executives illustrate how the need to create an inspiring vision creates a tremendous challenge for executives. When asked to identify the most important characteristics of effective strategic leaders, 98% of executives listed "a strong sense of vision" first. Meanwhile, 90% of executives expressed serious doubts about their own ability to create a vision. Not surprisingly, many organizations do not have formal visions. Many organizations that have visions find that employees do not embrace or pursue them. Therefore, having a well-formulated vision that employees embrace can give the organization an advantage over its rivals.

At WestJet, Clive Beddoe and his team developed their mission statement: "To enrich the lives of everyone in the WestJet world by providing safe, friendly and affordable air travel." A mission like WestJet's establishes why an organization exists. Well-written mission statements effectively capture an organization's identity and provide answers to the fundamental question "Who are we?" While a vision looks to the future, a mission captures key elements of the organization's past and present.

Organizations need the support of their key stakeholders, such as employees, owners, suppliers, and customers, if they are to thrive. A mission statement that engages stakeholders will help develop an understanding of why they should support the organization and clarify the important role or purpose the organization plays in society, also called the "social license to operate." Google's mission, for example, is "to organize the world's information and make it universally accessible and useful." Google pursued this mission in its early days, developing a very popular Internet search engine. The company continues to fulfill its mission through a series of strategic actions, including offering its Google Chrome Internet browser to the online community, providing free email through its Gmail service, and making books available online for the navegation.

In ancient times, Aesop said: "United we stand, divided we fall." This provides a useful way to think about the relationship between vision and mission. Executives ask for trouble if their organization's vision and mission are divided by emphasis on different domains. Some universities have fallen into this trap. Many large public universities were established in the late 19th century with missions focused on the education of citizens. However, as the 20th century progressed, the creation of scientific knowledge through research became increasingly important to these universities. Many university presidents responded by creating visions focused on building the scientific prestige of their schools. This created a dilemma for professors: should they spend most of their time and energy teaching students (as the mission demanded) or their research studies (as the ambitious presidents demanded through their visions)? Some universities continue to struggle with this compensation today and remain divided among themselves. In short, an organization is more effective to the extent that its vision and mission direct the efforts of employees in the same direction.

The combination of an organization's vision and mission provides a broad and general sense of the organization's direction. To work towards achieving these general aspirations, organizations also need to create—More specific goals that should provide clear and tangible guidance to employees as they go about their daily work. The most effective goals are those that are

Sspecific,

METROmeasurable,

Aaccessible,

Rrealistic, and

Tbound to time.

An easy way to remember these dimensions is to combine the first letter of each into a word:INTELLIGENT(Figure 2.4 “Creating SMART objectives”🇧🇷 Employees are in a much better position to succeed to the extent that an organization's goals are SMART.specificif it is explicit rather than vague. WestJet's vision is that "by 2016, WestJet will be one of the five most successful international airlines in the world, providing our guests with a friendly and attentive experience that will change air travel forever."

a goal ismeasurablethe extent to which it can be quantified whether the objective is achieved. WestJet's goal to be one of the world's top five most successful international airlines by 2016 offers a very simple and clear measurability: WestJet will either be in the top five in 2016 or it won't be.

a goal isaggressiveif achieving it presents a significant (rather than easy) challenge for the organization. A number of research studies have shown that performance is stronger when goals are challenging but achievable. Such goals force people to test and stretch the limits of their abilities. This can result in reaching amazing heights.

WestJet is committed to growing responsibly and ensuring that it is an environmentally sustainable airline and supports IATA's goal of carbon neutral growth in its industry after 2020. WestJet already operates one of the most modern and fuel efficient fleets in North America.

Achieving carbon-neutral growth will be a challenge for WestJet, which will require combined efforts from the airline and its supplier partners such as aircraft manufacturers, airports and the government. In 2012, WestJet reported that “our significant investments in fleet and technology have greatly improved the fuel efficiency of our aircraft and the ability to operate our business more economically. Between 2000 and 2012, we improved our fuel efficiency by 44.8% per revenue tonne-kilometre. The resulting fuel savings is equivalent to the amount of fuel that would have been used to fly a next-generation Boeing 737 from Calgary to Toronto and back approximately 44,135 times (based on our 2012 fuel use). (Quigley, 1994)

It is useful to know that easilyaccessibleThe goals are not only easy, but they tend to undermine the motivation and the general effort of the employees, said Miguel Ángel: earning our brand. Consider a situation where you did so well in a course that you only need a score of 60% on the final exam to earn an A in the course. Understandably, few students would study hard enough to get a 90% or 100% on the final exam under these circumstances. Similarly, setting organizational goals that are easy to achieve encourages employees to work hard enough to achieve the goals.

It's tempting to extend this logic and think to the conclusion that setting near-impossible goals will further encourage team effort and performance. However, people act rationally and tend to get discouraged and give up when faced with goals that realistically have little chance of being achieved. If, for example, Starbucks had set a one-year deadline to recoup the $35 share price, that would have drawn derision. The company simply could not be reversed so quickly. Similarly, if WestJet's fuel efficiency target were a 100% improvement, WestJet employees would probably not adopt it. Thus, the goals must also be realistic, which means that their achievement is feasible.

Most of us have found deadlines to be motivating and help structure our work time. The same is true for organizations, leading to the conclusion that objectives must betime limitby creating deadlines. WestJet has set a goal of achieving a 45% cumulative improvement in fuel efficiency for our 737 fleet by 2020, compared to the 2000 base year. (WestJet, 2012)

The period after a major goal is achieved is often overlooked, but it is critical. Will an organization rest on its laurels or take on new challenges? Starbucks provides an illustrative example. In 2011, after a renovation of the company's stores and services, the share price was around $35. In early 2014, the price was around $70.

Edwards, A. (2012).Mission Statements: The World's Top 10 Brands.Taken from http://communicatingasiapacific.com/2012/06/15/mission-statements-worlds-top-10-brands/

Google Inc. (2014).10 things we know to be true🇧🇷 Retrieved from https://www.google.com.sg/about/company/philosophy/

Quigley, JV (1994). Vision: How leaders develop, share and sustain it.business horizons,37(5), 37–41.

WestJet Airlines Ltd. (2012).WestJet Global Reporting Initiative 2012 Report[PDF]🇧🇷 Retrieved from https://www.westjet.com/pdf/global-reporting.pdf

Figure 2.2 image description: Big picture: organizational vision.

The vision of an organization describes what the organization hopes to become in the future. Visions highlight the values ​​and aspirations that are at the core of the organization. While vision statements have the potential to inspire employees, customers, and other stakeholders, vision statements are relatively rare, and good visions are even rarer. Below are some of the visions that companies are pursuing today.

• Alcoa: To be the best company in the world, in the eyes of our customers, shareholders, communities and people.
• Avon: To be the company that best understands and meets the needs of women worldwide for products, services and personal fulfillment.
• Chevron: To be the most admired global energy company for its people, partnership and performance.
• Google – to develop a perfect search engine.
• Kraft Foods: Helping people around the world eat and live better.
• Procter and Gamble: To be recognized as the best consumer products and services company in the world.

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Figure 2.3 image description: Missions.

While a vision describes what an organization wants to become in the future, an organization's mission is based on the past and present. A mission describes why the organization exists and explains the role it plays in society. A well-written mission statement captures the organization's identity and helps answer the fundamental question of "who are we?" In practice, a mission statement explains to key stakeholders why they should support the organization. The following examples illustrate the connections between organizations and the needs of their key stakeholders.

• Harley Davidson – We make dreams come true through the motorcycling experience, offering motorcyclists and the general public an ever-expanding line of motorcycles and branded products and services in select market segments.
• Westjet – Enriching the lives of everyone in the Westjet world by providing safe, friendly and affordable air travel.
• Starbucks: To inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time. It has always been and always will be about equality.
• Mountain Equipment Cooperative - We help people enjoy the benefits of nature-focused, self-propelled recreation.
• Fender musical instrument - to exceed the expectations of music enthusiasts around the world.

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Figure 2.4 image description: Creating SMART goals.

While missions and visions provide a general sense of direction for the organization, goals are more specific objectives that should provide clear and tangible direction for employees. The most effective goals are those that are SMART (specific, measurable, achievable, realistic, and time bound). SMART goals help provide clarity, transparency, and accountability. Westjet's goal is to "enrich the lives of everyone in the Westjet world by providing safe, friendly and affordable air travel. By 2016, we strive to be one of the top five airlines in the world, based on key metrics such as on-time , safety, profitability and customer satisfaction.

Westjet's goals fit the acronym SMART.

• Specific: Westjet strives to be among the top five international airlines. By contrast, “best” would be vague, making it difficult to decide whether a goal has actually been achieved.
• Measurable: Westjet identifies key metrics: punctuality, safety, profitability and customer satisfaction. Westjet may measure your progress against your goals.
• Achievable: Westjet lists achievements to date in working toward goals. A large body of research shows that performance is stronger when goals are challenging but achievable.
• Realistic: Westjet claims to support the International Air Transport Association (IATA) goals of a cumulative global average fuel efficiency improvement of 1.5% per year by 2020. Achieving a goal must be achievable for employees to buy into it .
• Time limit: Westjet's timeline is "In 2016". Deadlines are motivating and create responsibility.

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