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Principles of ManagementPrinciples of Management

Principles of ManagementPrinciples of Management

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U N I V E R S I T Y O F M I N N E S O T A L I B R A R I E S P U B L I S H I N G E D I T I O N , 2 0 1 5 . T H I S E D I T I O N A D A P T E D F R O M A W O R K O R I G I N A L L Y P R O D U C E D I N 2 0 1 0 B Y A P U B L I S H E R W H O H A S R E Q U E S T E D T H A T I T N O T R E C E I V E

A T T R I B U T I O N . M I N N E A P O L I S , M N

Principles of Management by University of Minnesota is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.

Contents

Publisher Information x

Chapter 1: Introduction to Principles of Management

1.1 Introduction to Principles of Management 2 1.2 Case in Point: Doing Good as a Core Business Strategy 5 1.3 Who Are Managers? 8 1.4 Leadership, Entrepreneurship, and Strategy 13 1.5 Planning, Organizing, Leading, and Controlling 20 1.6 Economic, Social, and Environmental Performance 25 1.7 Performance of Individuals and Groups 31 1.8 Your Principles of Management Survivor’s Guide 36

Chapter 2: Personality, Attitudes, and Work Behaviors

2.1 Chapter Introduction 48 2.2 Case in Point: SAS Institute Invests in Employees 50 2.3 Personality and Values 52 2.4 Perception 70 2.5 Work Attitudes 78 2.6 The Interactionist Perspective: The Role of Fit 84 2.7 Work Behaviors 87 2.8 Developing Your Positive Attitude Skills 100

Chapter 3: History, Globalization, and Values-Based Leadership

3.1 History, Globalization, and Values-Based Leadership 104 3.2 Case in Point: Hanna Andersson Corporation Changes for Good 106 3.3 Ancient History: Management Through the 1990s 109 3.4 Contemporary Principles of Management 116 3.5 Global Trends 122

3.6 Globalization and Principles of Management 130 3.7 Developing Your Values-Based Leadership Skills 136

Chapter 4: Developing Mission, Vision, and Values

4.1 Developing Mission, Vision, and Values 143 4.2 Case in Point: Xerox Motivates Employees for Success 145 4.3 The Roles of Mission, Vision, and Values 148 4.4 Mission and Vision in the P-O-L-C Framework 153 4.5 Creativity and Passion 160 4.6 Stakeholders 169 4.7 Crafting Mission and Vision Statements 175 4.8 Developing Your Personal Mission and Vision 182

Chapter 5: Strategizing

5.1 Strategizing 191 5.2 Case in Point: Unnamed Publisher Transforms Textbook Industry 193 5.3 Strategic Management in the P-O-L-C Framework 196 5.4 How Do Strategies Emerge? 204 5.5 Strategy as Trade-Offs, Discipline, and Focus 209 5.6 Developing Strategy Through Internal Analysis 219 5.7 Developing Strategy Through External Analysis 231 5.8 Formulating Organizational and Personal Strategy With the Strategy Diamond 242

Chapter 6: Goals and Objectives

6.1 Goals and Objectives 251 6.2 Case in Point: Nucor Aligns Company Goals With Employee Goals 253 6.3 The Nature of Goals and Objectives 255 6.4 From Management by Objectives to the Balanced Scorecard 260 6.5 Characteristics of Effective Goals and Objectives 269 6.6 Using Goals and Objectives in Employee Performance Evaluation 275 6.7 Integrating Goals and Objectives with Corporate Social Responsibility 281 6.8 Your Personal Balanced Scorecard 289

Chapter 7: Organizational Structure and Change

7.1 Organizational Structure and Change 298 7.2 Case in Point: Toyota Struggles With Organizational Structure 300 7.3 Organizational Structure 303 7.4 Contemporary Forms of Organizational Structures 312

7.5 Organizational Change 317 7.6 Planning and Executing Change Effectively 328 7.7 Building Your Change Management Skills 334

Chapter 8: Organizational Culture

8.1 Organizational Culture 337 8.2 Case in Point: Google Creates Unique Culture 339 8.3 Understanding Organizational Culture 342 8.4 Measuring Organizational Culture 346 8.5 Creating and Maintaining Organizational Culture 356 8.6 Creating Culture Change 370 8.7 Developing Your Personal Skills: Learning to Fit In 375

Chapter 9: Social Networks

9.1 Social Networks 379 9.2 Case in Point: Networking Powers Relationships 381 9.3 An Introduction to the Lexicon of Social Networks 383 9.4 How Managers Can Use Social Networks to Create Value 389 9.5 Ethical Considerations With Social Network Analysis 400 9.6 Personal, Operational, and Strategic Networks 408 9.7 Mapping and Your Own Social Network 414

Chapter 10: Leading People and Organizations

10.1 Leading People and Organizations 421 10.2 Case in Point: Indra Nooyi Draws on Vision and Values to Lead 424 10.3 Who Is a Leader? Trait Approaches to Leadership 427 10.4 What Do Leaders Do? Behavioral Approaches to Leadership 434 10.5 What Is the Role of the Context? Contingency Approaches to Leadership 439 10.6 Contemporary Approaches to Leadership 447 10.7 Developing Your Leadership Skills 461

Chapter 11: Decision Making

11.1 Decision Making 467 11.2 Case in Point: Bernard Ebbers Creates Biased Decision Making at WorldCom 469 11.3 Understanding Decision Making 472 11.4 Faulty Decision Making 485 11.5 Decision Making in Groups 490 11.6 Developing Your Personal Decision-Making Skills 498

Chapter 12: Communication in Organizations

12.1 Communication in Organizations 501 12.2 Case in Point: Edward Jones Communicates Caring 503 12.3 Understanding Communication 505 12.4 Communication Barriers 511 12.5 Different Types of Communication 523 12.6 Communication Channels 530 12.7 Developing Your Personal Communication Skills 539

Chapter 13: Managing Groups and Teams

13.1 Managing Groups and Teams 545 13.2 Case in Point: General Electric Allows Teamwork to Take Flight 547 13.3 Group Dynamics 549 13.4 Understanding Team Design Characteristics 558 13.5 Organizing Effective Teams 573 13.6 Barriers to Effective Teams 579 13.7 Developing Your Team Skills 582

Chapter 14: Motivating Employees

14.1 Motivating Employees 585 14.2 Case in Point: Zappos Creates a Motivating Place to Work 588 14.3 Need-Based Theories of Motivation 590 14.4 Process-Based Theories 598 14.5 Developing Your Personal Motivation Skills 620

Chapter 15: The Essentials of Control

15.1 The Essentials of Control 624 15.2 Case in Point: Newell Rubbermaid Leverages Cost Controls to Grow 626 15.3 Organizational Control 628 15.4 Types and Levels of Control 636 15.5 Financial Controls 642 15.6 Nonfinancial Controls 651 15.7 Lean Control 659 15.8 Crafting Your Balanced Scorecard 665

Chapter 16: Strategic Human Resource Management

16.1 Strategic Human Resource Management 671 16.2 Case in Point: Kronos Uses Science to Find the Ideal Employee 674

16.3 The Changing Role of Strategic Human Resource Management in Principles of Management

677

16.4 The War for Talent 683 16.5 Effective Selection and Placement Strategies 689 16.6 The Roles of Pay Structure and Pay for Performance 696 16.7 Designing a High-Performance Work System 702 16.8 Tying It All Together—Using the HR Balanced Scorecard to Gauge and Manage Human Capital, Including Your Own

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Principles of Management is adapted from a work produced and

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x

Chapter 4: Developing Mission, Vision, and Values

4.1 Developing Mission, Vision, and Values

4.2 Case in Point: Xerox Motivates Employees for Success

4.3 The Roles of Mission, Vision, and Values

4.4 Mission and Vision in the P-O-L-C Framework

4.5 Creativity and Passion

4.6 Stakeholders

4.7 Crafting Mission and Vision Statements

4.8 Developing Your Personal Mission and Vision

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4.1 Developing Mission, Vision, and Values

What’s in It for Me?

Reading this chapter will help you do the following:

1. Understand the roles of mission, vision, and values in the planning process.

2. Understand how mission and vision fit into the planning-organizing-leading-controlling (P-O-L- C) framework.

3. See how creativity and passion are related to vision.

4. Incorporate stakeholder interests into mission and vision.

5. Develop statements that articulate organizational mission and vision.

6. Apply mission, vision, and values to your personal goals and professional career.

As you are reminded in the figure, the letter “P” in the P-O-L-C framework stands for “planning.” Good plans

are meant to achieve something—this something is captured in verbal and written statements of an organization’s

mission and vision (its purpose, in addition to specific goals and objectives). With a mission and vision, you can

craft a strategy for achieving them, and your benchmarks for judging your progress and success are clear goals

and objectives. Mission and vision communicate the organization’s values and purpose, and the best mission and

vision statements have an emotional component in that they incite employees to delight customers. The three

“planning” topics of your principles of management cover (1) mission and vision, (2) strategy, and (3) goals and

objectives. The figure summarizes how these pieces work together.

Figure 4.2 Mission and Vision as P-O-L-C Components

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Figure 4.3 Mission and Vision in the Planning Process

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4.2 Case in Point: Xerox Motivates Employees for Success

Figure 4.4

Anne Mulcahy, Former Xerox Chairman of the Board (left), and Ursula Burns, Xerox CEO (right)

Fortune Live Media – Fortune Most Powerful Women 2012 – CC BY-NC-ND 2.0; Fortune Live Media – Fortune Most Powerful

Women – CC BY-NC-ND 2.0.

As of 2010, Xerox Corporation (NYSE: XRX) is a $22 billion, multinational company founded in 1906 and operating in 160 countries. Xerox is headquartered in Norwalk, Connecticut, and employs 130,000 people. How does a company of such size and magnitude effectively manage and motivate employees from diverse backgrounds and experiences? Such companies depend on the productivity and performance of their employees. The journey over the last 100 years has withstood many successes and failures. In 2000, Xerox was facing bankruptcy after years of mismanagement, piles of debt, and mounting questions about its accounting practices.

Anne Mulcahy turned Xerox around. Mulcahy joined Xerox as an employee in 1976 and moved up the corporate ladder, holding several management positions until she became CEO in 2001. In 2005, Mulcahy was named by Fortune magazine as the second most powerful woman in business. Based on a lifetime of experience with Xerox, she knew that the company had powerful employees who were not motivated

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when she took over. Mulcahy believed that among other key businesses changes, motivating employees at Xerox was a key way to pull the company back from the brink of failure. One of her guiding principles was a belief that in order to achieve customer satisfaction, employees must be treated as key stakeholders and become interested and motivated in their work. Mulcahy not only successfully saw the company through this difficult time but also was able to create a stronger and more focused company.

In 2009, Mulcahy became the chairman of Xerox’s board of directors and passed the torch to Ursula Burns, who became the new CEO of Xerox. Burns became not only the first African American woman CEO to head a Standard & Poor’s (S&P) company but also the first woman to succeed another woman as the head of an S&P 100 company. Burns is also a lifetime Xerox employee who has been with the company for over 30 years. She began as a graduate intern and was hired full time after graduation. Because of her tenure with Xerox, she has close relationships with many of the employees, which provides a level of comfort and teamwork. She describes Xerox as a nice family. She maintains that Mulcahy created a strong and successful business but encouraged individuals to speak their mind, to not worry about hurting one another’s feelings, and to be more critical.

Burns explains that she learned early on in her career, from her mentors at Xerox, the importance of managing individuals in different ways and not intentionally intimidating people but rather relating to them and their individual perspectives. As CEO, she wants to encourage people to get things done, take risks, and not be afraid of those risks. She motivates her teams by letting them know what her intentions and priorities are. The correlation between a manager’s leadership style and the productivity and motivation of employees is apparent at Xerox, where employees feel a sense of importance and a part of the process necessary to maintain a successful and profitable business. In 2010, Anne Mulcahy retired from her position on the board of directors to pursue new projects.

Case written based on information from Tompkins, N. C. (1992, November 1). Employee satisfaction leads to customer service. AllBusiness. Retrieved April 5, 2010, from http://www.allbusiness.com/marketing/ market-research/341288-1.html; 50 most powerful women. (2006). Fortune. Retrieved April 5, 2010, from http://money.cnn.com/popups/2006/fortune/mostpowerfulwomen/2.html; Profile: Anne M. Mulcahy. (2010). Forbes. Retrieved April 5, 2010, from http://people.forbes.com/profile/anne-m-mulcahy/19732; Whitney, L. (2010, March 30). Anne Mulcahy to retire as Xerox chairman. CNET News. Retrieved April 5, 2010, from http://news.cnet.com/8301-1001_3-20001412-92.html; Bryant, A. (2010, February 20). Xerox’s new chief tries to redefine its culture. New York Times. Retrieved April 5, 2010, from http://www.nytimes.com/2010/02/21/business/21xerox.html?pagewanted=18dpc.

Discussion QuestionsDiscussion Questions

1. In terms of the P-O-L-C framework, what values do the promotion and retention of Mulcahy and Burns suggest are important at Xerox? How might these values be reflected in its vision and mission statements?

2. How do you think Xerox was able to motivate its employees through the crisis it faced in 2000?

3. How do CEOs with large numbers of employees communicate priorities to a worldwide workforce?

4. How might Ursula Burns motivate employees to take calculated risks?

5. Both Anne Mulcahy and Ursula Burns were lifetime employees of Xerox. How does an

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organization attract and keep individuals for such a long period of time?

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4.3 The Roles of Mission, Vision, and Values

Learning Objectives

1. Be able to define mission and vision.

2. See how values are important for mission and vision.

3. Understand the roles of vision, mission, and values in the P-O-L-C framework.

Mission, Vision, and ValuesMission, Vision, and Values

Mission and vision both relate to an organization’s purpose and are typically communicated in some written form.

Mission and vision are statements from the organization that answer questions about who we are, what do we

value, and where we’re going. A study by the consulting firm Bain and Company reports that 90% of the 500

firms surveyed issue some form of mission and vision statements (Bart & Baetz, 1998). Moreover, firms with

clearly communicated, widely understood, and collectively shared mission and vision have been shown to perform

better than those without them, with the caveat that they related to effectiveness only when strategy and goals and

objectives were aligned with them as well (Bart, et. al., 2001).

A mission statement communicates the organization’s reason for being, and how it aims to serve its key

stakeholders. Customers, employees, and investors are the stakeholders most often emphasized, but other

stakeholders like government or communities (i.e., in the form of social or environmental impact) can also be

discussed. Mission statements are often longer than vision statements. Sometimes mission statements also include

a summation of the firm’s values. Values are the beliefs of an individual or group, and in this case the organization,

in which they are emotionally invested. The Starbucks mission statement describes six guiding principles that, as

you can see, also communicate the organization’s values:

1. Provide a great work environment and treat each other with respect and dignity.

2. Embrace diversity as an essential component in the way we do business.

3. Apply the highest standards of excellence to the purchasing, roasting and fresh delivery of our coffee.

4. Develop enthusiastically satisfied customers all of the time.

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5. Contribute positively to our communities and our environment.

6. Recognize that profitability is essential to our future success (Starbucks, 2008).

Similarly, Toyota declares its global corporate principles to be:

1. Honor the language and spirit of the law of every nation and undertake open and fair corporate activities

to be a good corporate citizen of the world.

2. Respect the culture and customs of every nation and contribute to economic and social development

through corporate activities in the communities.

3. Dedicate ourselves to providing clean and safe products and to enhancing the quality of life everywhere

through all our activities.

4. Create and develop advanced technologies and provide outstanding products and services that fulfill the

needs of customers worldwide.

5. Foster a corporate culture that enhances individual creativity and teamwork value, while honoring

mutual trust and respect between labor and management.

6. Pursue growth in harmony with the global community through innovative management.

7. Work with business partners in research and creation to achieve stable, long-term growth and mutual

benefits, while keeping ourselves open to new partnerships (Toyota, 2008).

A vision statement, in contrast, is a future-oriented declaration of the organization’s purpose and aspirations.

In many ways, you can say that the mission statement lays out the organization’s “purpose for being,” and the

vision statement then says, “based on that purpose, this is what we want to become.” The strategy should flow

directly from the vision, since the strategy is intended to achieve the vision and thus satisfy the organization’s

mission. Typically, vision statements are relatively brief, as in the case of Starbuck’s vision statement, which

reads: “Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our

uncompromising principles as we grow (Starbucks, 2008).” Or ad firm Ogilvy & Mather, which states their

vision as “an agency defined by its devotion to brands (Ogilvy, 2008).” Sometimes the vision statement is also

captured in a short tag line, such as Toyota’s “moving forward” statement that appears in most communications to

customers, suppliers, and employees (Toyota, 2008). Similarly, Wal-Mart’s tag-line version of its vision statement

is “Save money. Live better (Walmart, 2008).”

Any casual tour of business or organization Web sites will expose you to the range of forms that mission and

vision statements can take. To reiterate, mission statements are longer than vision statements, often because

they convey the organizations core values. Mission statements answer the questions of “Who are we?” and

“What does our organization value?” Vision statements typically take the form of relatively brief, future-

oriented statements—vision statements answer the question “Where is this organization going?” Increasingly,

organizations also add a values statement which either reaffirms or states outright the organization’s values that

might not be evident in the mission or vision statements.

Roles Played by Mission and VisionRoles Played by Mission and Vision

Mission and vision statements play three critical roles: (1) communicate the purpose of the organization to

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stakeholders, (2) inform strategy development, and (3) develop the measurable goals and objectives by which

to gauge the success of the organization’s strategy. These interdependent, cascading roles, and the relationships

among them, are summarized in the figure.

Figure 4.5 Key Roles of Mission and Vision

First, mission and vision provide a vehicle for communicating an organization’s purpose and values to all key

stakeholders. Stakeholders are those key parties who have some influence over the organization or stake in its

future. You will learn more about stakeholders and stakeholder analysis later in this chapter; however, for now,

suffice it to say that some key stakeholders are employees, customers, investors, suppliers, and institutions such as

governments. Typically, these statements would be widely circulated and discussed often so that their meaning is

widely understood, shared, and internalized. The better employees understand an organization’s purpose, through

its mission and vision, the better able they will be to understand the strategy and its implementation.

Second, mission and vision create a target for strategy development. That is, one criterion of a good strategy is

how well it helps the firm achieve its mission and vision. To better understand the relationship among mission,

vision, and strategy, it is sometimes helpful to visualize them collectively as a funnel. At the broadest part of the

funnel, you find the inputs into the mission statement. Toward the narrower part of the funnel, you find the vision

statement, which has distilled down the mission in a way that it can guide the development of the strategy. In the

narrowest part of the funnel you find the strategy —it is clear and explicit about what the firm will do, and not do,

to achieve the vision. Vision statements also provide a bridge between the mission and the strategy. In that sense

the best vision statements create a tension and restlessness with regard to the status quo—that is, they should foster

a spirit of continuous innovation and improvement. For instance, in the case of Toyota, its “moving forward”

vision urges managers to find newer and more environmentally friendly ways of delighting the purchaser of their

cars. London Business School professors Gary Hamel and C. K. Prahalad describe this tense relationship between

vision and strategy as stretch and ambition. Indeed, in a study of such able competitors as CNN, British Airways,

and Sony, they found that these firms displaced competitors with stronger reputations and deeper pockets through

their ambition to stretch their organizations in more innovative ways (Hamel & Prahalad, 1993).

Third, mission and vision provide a high-level guide, and the strategy provides a specific guide, to the goals and

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objectives showing success or failure of the strategy and satisfaction of the larger set of objectives stated in the

mission. In the cases of both Starbucks and Toyota, you would expect to see profitability goals, in addition to

metrics on customer and employee satisfaction, and social and environmental responsibility.

Key Takeaway

Mission and vision both relate to an organization’s purpose and aspirations, and are typically communicated in some form of brief written statements. A mission statement communicates the organization’s reason for being and how it aspires to serve its key stakeholders. The vision statement is a narrower, future-oriented declaration of the organization’s purpose and aspirations. Together, mission and vision guide strategy development, help communicate the organization’s purpose to stakeholders, and inform the goals and objectives set to determine whether the strategy is on track.

Exercises

1. What is a mission statement?

2. What is a vision statement?

3. How are values important to the content of mission and vision statements?

4. Where does the purpose of mission and vision overlap?

5. How do mission and vision relate to a firm’s strategy?

6. Why are mission and vision important for organizational goals and objectives?

ReferencesReferences

Bart, C. K., & Baetz, M. C. (1998). The relationship between mission statements and firm performance: An

exploratory study. Journal of Management Studies, 35, 823–853.

Bart, C. K., Bontis, N., & Taggar, S. (2001). A model of the impact of mission statements on firm performance.

Management Decision, 39(1), 19–35.

Hamel, G., & Prahalad, C. K. (1993, March–April). Strategy as stretch and leverage. Harvard Business Review,

75–84.

Ogilvy, Retrieved October 27, 2008, from http://www.ogilvy.com/o_mather.

Starbucks, retrieved October 27, 2008, from http://www.starbucks.com/aboutus

Toyota, retrieved October 27, 2008, from http://www.toyota.co.jp/en/vision/philosophy.

Toyota, retrieved October 27, 2008, from http://www.toyota.com/about/our_values/index.html.

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Walmart, retrieved October 27, 2008, from http://www.walmart.com.

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4.4 Mission and Vision in the P-O-L-C Framework

Learning Objectives

1. Understand the role of mission and vision in organizing.

2. Understand the role of mission and vision in leading.

3. Understand the role of mission and vision in controlling.

Mission and vision play such a prominent role in the planning facet of the P-O-L-C framework. However, you

are probably not surprised to learn that their role does not stop there. Beyond the relationship between mission

and vision, strategy, and goals and objectives, you should expect to see mission and vision being related to the

organizing, leading, and controlling aspects as well. Let’s look at these three areas in turn.

Mission, Vision, and OrganizingMission, Vision, and Organizing

Organizing is the function of management that involves developing an organizational structure and allocating

human resources to ensure the accomplishment of objectives. The organizing facet of the P-O-L-C framework

typically includes subjects such as organization design, staffing, and organizational culture. With regard to

organizing, it is useful to think about alignment between the mission and vision and various organizing activities.

For instance, organizational design is a formal, guided process for integrating the people, information, and

technology of an organization. It is used to match the form of the organization as closely as possible to the

purpose(s) the organization seeks to achieve. Through the design process, organizations act to improve the

probability that the collective efforts of members will be successful.

Organization design should reflect and support the strategy—in that sense, organizational design is a set of

decision guidelines by which members will choose appropriate actions, appropriate in terms of their support for

the strategy. As you learned in the previous section, the strategy is derived from the mission and vision statements

and from the organization’s basic values. Strategy unifies the intent of the organization and focuses members

toward actions designed to accomplish desired outcomes. The strategy encourages actions that support the purpose

and discourages those that do not.

To organize, you must connect people with each other in meaningful and purposeful ways. Further, you must

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connect people—human resources—with the information and technology necessary for them to be successful.

Organization structure defines the formal relationships among people and specifies both their roles and their

responsibilities. Administrative systems govern the organization through guidelines, procedures, and policies.

Information and technology define the process(es) through which members achieve outcomes. Each element must

support each of the others, and together they must support the organization’s purpose, as reflected in its mission

and vision.

Figure 4.6

Pixar’s creative prowess is reinforced by Disney’s organizational design choices.

Tim Norris – Wall•E : What’s out there? – CC BY-NC-ND 2.0.

For example, in 2006, Disney acquired Pixar, a firm is renowned for its creative prowess in animated

entertainment. Disney summarizes the Pixar strategy like this: “Pixar’s [strategy] is to combine proprietary

technology and world-class creative talent to develop computer-animated feature films with memorable characters

and heartwarming stories that appeal to audiences of all ages (Pixar, 2008).” Disney has helped Pixar achieve this

strategy through an important combination of structural design choices. First, Pixar is an independent division of

Disney and is empowered to make independent choices in all aspects of idea development. Second, Pixar gives

its “creatives”—its artists, writers, and designers—great leeway over decision making. Third, Pixar protects its

creatives’ ability to share work in progress, up and down the hierarchy, with the aim of getting it even better.

Finally, after each project, teams conduct “postmortems” to catalog what went right and what went wrong. This

way, innovations gained through new projects can be shared with later projects, while at the same time sharing

knowledge about potential pitfalls (Catmull, 2008).

Organizational culture is the workplace environment formulated from the interaction of the employees in the

workplace. Organizational culture is defined by all of the life experiences, strengths, weaknesses, education,

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upbringing, and other attributes of the employees. While executive leaders play a large role in defining

organizational culture by their actions and leadership, all employees contribute to the organizational culture.

As you might imagine, achieving alignment between mission and vision and organizational culture can be very

powerful, but culture is also difficult to change. This means that if you are seeking to change your vision or

mission, your ability to change the organization’s culture to support those new directions may be difficult, or, at

least, slow to achieve.

For instance, in 2000, Procter & Gamble (P&G) sought to change a fundamental part of its vision in a way

that asked the organization to source more of its innovations from external partners. Historically, P&G had

invested heavily in research and development and internal sources of innovation—so much so that “not invented

here” (known informally as NIH) was the dominant cultural mind-set (Lafley & Charan, 2008). NIH describes a

sociological, corporate, or institutional culture that avoids using products, research, or knowledge that originated

anywhere other than inside the organization. It is normally used in a pejorative sense. As a sociological

phenomenon, the “not invented here” syndrome is manifested as an unwillingness to adopt an idea or product

because it originates from another culture. P&G has been able to combat this NIH bias and gradually change its

culture toward one that is more open to external contributions, and hence in much better alignment with its current

mission and vision.

Social networks are often referred to as the “invisible organization.” They consist of individuals or organizations

connected by one or more specific types of interdependency. You are probably already active in social networks

through such Web communities as MySpace, Facebook, and LinkedIn. However, these sites are really only the tip

of the iceberg when it comes to the emerging body of knowledge surrounding social networks. Networks deliver

three unique advantages: access to “private” information (i.e., information that companies do not want competitors

to have), access to diverse skill sets, and power. You may be surprised to learn that many big companies have

breakdowns in communications even in divisions where the work on one project should be related to work on

another. Going back to our Pixar example, for instance, Disney is fostering a network among members of its

Pixar division in a way that they are more likely to share information and learn from others. The open internal

network also means that a cartoon designer might have easier access to a computer programmer and together they

can figure out a more innovative solution. Finally, since Pixar promotes communication across hierarchical levels

and gives creatives decision-making authority, the typical power plays that might impede sharing innovation and

individual creativity are prevented. Managers see these three network advantages at work every day but might not

pause to consider how their networks regulate them.

Mission, Vision, and LeadingMission, Vision, and Leading

Leading involves influencing others toward the attainment of organizational objectives. Leading and leadership

are nearly synonymous with the notions of mission and vision. We might describe a very purposeful person as

being “on a mission.” As an example, Steve Demos had the personal mission of replacing cow’s milk with soy

milk in U.S. supermarkets, and this mission led to his vision for, and strategy behind, the firm White Wave and its

Silk line of soy milk products (Carpenter & Sanders, 2006). Similarly, we typically think of some individuals as

leaders because they are visionary. For instance, when Walt Disney suggested building a theme park in a Florida

swamp back in the early 1960s, few other people in the world seemed to share his view.

Any task—whether launching Silk or building the Disney empire— is that much more difficult if attempted

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alone. Therefore, the more that a mission or vision challenges the status quo—and recognizing that good vision

statements always need to create some dissonance with the status quo—the greater will be the organization’s need

of what leadership researcher Shiba calls “real change leaders”—people who will help diffuse the revolutionary

philosophy even while the leader (i.e., the founder or CEO) is not present. Without real change leaders, a

revolutionary vision would remain a mere idea of the visionary CEO—they are the ones who make the

implementation of the transformation real.

In most cases where we think of revolutionary companies, we associate the organization’s vision with its

leader—for instance, Apple and Steve Jobs, Dell and Michael Dell, or Google with the team of Sergey Brin and

Larry Page. Most important, in all three of these organizations, the leaders focused on creating an organization

with a noble mission that enabled the employees and management team to achieve not only the strategic

breakthrough but to also realize their personal dreams in the process. Speaking to the larger relationship between

mission, vision, strategy, and leadership, are the Eight principles of visionary leadership, derived from Shiba’s

2001 book, Four Practical Revolutions in Management (summarized in “Eight Principles of Visionary

Leadership”)(Shiba & Walden, 2001).

Eight Principles of Visionary LeadershipEight Principles of Visionary Leadership

• Principle 1: The visionary leader must do on-site observation leading to personal perception of changes in societal values from an outsider’s point of view.

• Principle 2: Even though there is resistance, never give up; squeeze the resistance between outside- in (i.e., customer or society-led) pressure in combination with top-down inside instruction.

• Principle 3: Revolution is begun with symbolic disruption of the old or traditional system through top-down efforts to create chaos within the organization.

• Principle 4: The direction of revolution is illustrated by a symbolically visible image and the visionary leader’s symbolic behavior.

• Principle 5: Quickly establishing new physical, organizational, and behavioral systems is essential for successful revolution.

• Principle 6: Real change leaders are necessary to enable revolution.

• Principle 7: Create an innovative system to provide feedback from results.

• Principle 8: Create a daily operation system, including a new work structure, new approach to human capabilities and improvement activities.

Vision That Pervades the OrganizationVision That Pervades the Organization

A broader definition of visionary leadership suggests that, if many or most of an organization’s employees

understand and identify with the mission and vision, efficiency will increase because the organization’s members

“on the front lines” will be making decisions fully aligned with the organization’s goals. Efficiency is achieved

with limited hands-on supervision because the mission and vision serve as a form of cruise control. To make

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frontline responsibility effective, leadership must learn to trust workers and give them sufficient opportunities to

develop quality decision-making skills.

The classic case about Johnsonville Sausage, recounted by CEO Ralph Stayer, documents how that company

dramatically improved its fortunes after Stayer shared responsibility for the mission and vision, and ultimately

development of the actual strategy, with all of his employees. His vision was the quest for an answer to “What

Johnsonville would have to be to sell the most expensive sausage in the industry and still have the biggest market

share (Stayer, 1990)?” Of course, he made other important changes as well, such as decentralizing decision

making and tying individual’s rewards to company-wide performance, but he initiated them by communicating

the organization’s mission and vision and letting his employees know that he believed they could make the choices

and decisions needed to realize them.

Mission and vision are also relevant to leadership well beyond the impact of one or several top executives.

Even beyond existing employees, various stakeholders—customers, suppliers, prospective new employees—are

visiting organizations’ Web sites to read their mission and vision statements. In the process, they are trying to

understand what kind of organization they are reading about and what the organization’s values and ethics are.

Ultimately, they are seeking to determine whether the organization and what it stands for are a good fit for them.

Vision, Mission, and ControllingVision, Mission, and Controlling

Controlling involves ensuring that performance does not deviate from standards. Controlling consists of three

steps: (1) establishing performance standards, (2) comparing actual performance against standards, and (3) taking

corrective action when necessary. Mission and vision are both directly and indirectly related to all three steps.

Performance StandardsPerformance Standards

Recall that mission and vision tell a story about an organization’s purpose and aspirations. Mission and vision

statements are often ambiguous by design because they are intended to inform the strategy not be the strategy.

Nevertheless, those statements typically provide a general compass heading for the organization and its

employees. For instance, vision may say something about innovativeness, growth, or firm performance, and

the firm will likely have set measurable objectives related to these. Performance standards often exceed actual

performance but, ideally, managers will outline a set of metrics that can help to predict the future, not just evaluate

the past.

It is helpful to think about such metrics as leading, lagging, and pacing indicators. A leading indicator actually

serves to predict where the firm is going, in terms of performance. For instance, General Electric asks customers

whether they will refer it new business, and GE’s managers have found that this measure of customer satisfaction

does a pretty good job of predicting future sales. A pacing indicator tells you in real time that the organization is

on track, for example, in on-time deliveries or machinery that is in operation (as opposed to being under repair

or in maintenance). A lagging indicator is the one we are all most familiar with. Firm financial performance,

for instance, is an accounting-based summary of how well the firm has done historically. Even if managers can

calculate such performance quickly, the information is still historic and not pacing or leading. Increasingly, firms

compile a set of such leading, lagging, and pacing goals and objectives and organize them in the form of a

dashboard or Balanced Scorecard.

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Actual Versus Desired PerformanceActual Versus Desired Performance

The goals and objectives that flow from your mission and vision provide a basis for assessing actual versus desired

performance. In many ways, such goals and objectives provide a natural feedback loop that helps managers see

when and how they are succeeding and where they might need to take corrective action. This is one reason goals

and objectives should ideally be specific and measurable. Moreover, to the extent that they serve as leading,

lagging, and pacing performance metrics, they enable managers to take corrective action on any deviations from

goals before too much damage has been done.

Corrective ActionCorrective Action

Finally, just as mission and vision should lead to specific and measurable goals and objectives and thus provide

a basis for comparing actual and desired performance, corrective action should also be prompted in cases where

performance deviates negatively from performance objectives. It is important to point out that while mission

and vision may signal the need for corrective action, because they are rather general, high-level statements they

typically will not spell out what specific actions—that latter part is the role of strategy, and mission and vision

are critical for good strategies but not substitutes for them. A mission and vision are statements of self-worth.

Their purpose is not only to motivate employees to take meaningful action but also to give leadership a standard

for monitoring progress. It also tells external audiences how your organization wishes to be viewed and have its

progress and successes gauged.

Strategic human resources management (SHRM) reflects the aim of integrating the organization’s human

capital—its people—into the mission and vision. Human resources management alignment means to integrate

decisions about people with decisions about the results an organization is trying to obtain. Research indicates that

organizations that successfully align human resources management with mission and vision accomplishment do

so by integrating SHRM into the planning process, emphasizing human resources activities that support mission

goals, and building strong human resources/management capabilities and relationships (Gerhart & Rynes, 2003).

Key Takeaway

In addition to being a key part of the planning process, mission and vision also play key roles in the organizing, leading, and controlling functions of management. While mission and vision start the planning function, they are best realized when accounted for across all four functions of management—P-O-L-C. In planning, mission and vision help to generate specific goals and objectives and to develop the strategy for achieving them. Mission and vision guide choices about organizing, too, from structure to organizational culture. The cultural dimension is one reason mission and vision are most effective when they pervade the leadership of the entire organization, rather than being just the focus of senior management. Finally, mission and vision are tied to the three key steps of controlling: (1) establishing performance standards, (2) comparing actual performance against standards, and (3) taking corrective action when necessary. Since people make the place, ultimately strategic human resources management must bring these pieces together.

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Exercises

1. How might mission and vision influence organizational design?

2. How might mission and vision influence leadership practices?

3. Why might a specific replacement CEO candidate be a good or poor choice for a firm with an existing mission and vision?

4. Which aspects of controlling do mission and vision influence?

5. Why are mission and vision relevant to the management of internal organizational social networks?

6. What performance standards might reinforce a firm’s mission and vision?

7. What is the role of mission and vision with strategic human resource management?

ReferencesReferences

Carpenter, M. A., & Sanders, W. G. (2006). Strategic management: A dynamic perspective. (1st ed.). Upper

Saddle River, NJ: Pearson/Prentice-Hall.

Catmull, E. (2008, September). How Pixar fosters collective creativity. Harvard Business Review, 1–11.

Gerhart, B. A., & Rynes, S. L. (2003). Compensation: Theory, Evidence, and Strategic Implications. Thousand

Oaks, CA, Sage.

Lafley, A. G., & Charan, R. (2008). The game changer. Upper Saddle River, NJ: Crown Books.

Pixar, retrieved October 27, 2008, from http://www.pixar.com/companyinfo/about_us/overview.htmHarvard

Business Review.

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4.5 Creativity and Passion

Learning Objectives

1. Understand how creativity relates to vision.

2. Develop some creativity tools.

3. Understand how passion relates to vision.

Creativity and passion are of particular relevance to mission and vision statements. A simple definition of

creativity is the power or ability to invent. We sometimes think of creativity as being a purely artistic attribute,

but creativity in business is the essence of innovation and progress. Passion at least in the context we invoke

here, refers to an intense, driving, or overmastering feeling or conviction. Passion is also associated with intense

emotion compelling action. We will focus mostly on the relationship between creativity, passion, and vision in

this section because organizational visions are intended to create uneasiness with the status quo and help inform

and motivate key stakeholders to move the organization forward. This means that a vision statement should reflect

and communicate something that is relatively novel and unique, and such novelty and uniqueness are the products

of creativity and passion.

160

Figure 4.7

Entrepreneurs are creative and passionate about their ideas, two characteristics we often associate with

vision and visionaries.

StartupStockPhotos – CC0 public domain.

Creativity and passion can, and probably should, also influence the organization’s mission. In many ways, the

linkages might be clearest between creativity and vision statements and passion and mission statements because

the latter is an expression of the organization’s values and deeply held beliefs. Similarly, while we will discuss

creativity and passion separately in this section, your intuition and experience surely tell you that creativity

eventually involves emotion, to be creative, you have to care about—be passionate about—what you’re doing.

Creativity and VisionCreativity and Vision

More recently, work by DeGraf and Lawrence, suggest a finer-grained view into the characteristics and types

of creativity (DeGraf & Lawrence, 2002). They argued that creativity “types” could be clustered based on

some combination of flexibility versus control and internal versus external orientation. For the manager, their

typology is especially useful as it suggests ways to manage creativity, as in simply hiring creative individuals. As

summarized in the figure, their research suggests that there are four types of creativity: (1) investment (external

orientation with high control), (2) imagination (external orientation with flexibility emphasis), (3) improvement

(internal orientation with high control), and (4) incubation (internal orientation with flexibility emphasis).

The first type of creativity, investment, is associated with speed—being first and being fast. It is also a form of

creativity fostered from the desire to be highly competitive. Perhaps one of the most recent examples of this type

of creativity crucible is the beer wars—the battle for U.S. market share between SABMiller and Anheuser Busch

(AB; Budweiser). Miller was relentless in attacking the quality of AB’s products through its advertisements, and

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at the same time launched a myriad number of new products to take business from AB’s stronghold markets (Biz

Journals, 2008).

The second type of creativity, imagination, is the form that most of us think of first. This type of creativity is

characterized by new ideas and breakthroughs: Apple’s stylish design of Macintosh computers and then game-

changing breakthroughs with its iPod and iPhone. Oftentimes, we can tie this type of creativity to the drive or

genius of a single individual, such as Apple’s Steve Jobs.

Figure 4.8 Four Creativity Types

Adapted from DeGraf, J., & Lawrence, K. A. (2002). Creativity at Work: Developing the Right Practices

to Make It Happen. San Francisco: Jossey-Bass.

Where big ideas come from the imagination quadrant, improvement is a type of creativity that involves making an

existing idea better. Two great examples of this are McDonald’s and Toyota. Ray Kroc, McDonald’s founder, had

the idea of creating quality and cooking standards for preparing tasty burgers and fries. While there were many

other burger joints around at the time (the 1950s), Kroc’s unique process-oriented approach gave McDonald’s a

big advantage. Similarly, Toyota has used the refinement of its automaking and auto-assembly processes (called

the Toyota Business System) to be one of the largest and most successful, high-quality car makers in the world.

Finally, the fourth area of creativity is incubation. Incubation is a very deliberate approach that concerns a vision

of sustainability—that is, leaving a legacy. This type of creativity is more complex because it involves teamwork,

empowerment, and collective action. In their chapter on problem solving, David Whetten and Kim Cameron

provide Gandhi as an example of incubation creativity:

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“Mahatma Gandhi was probably the only person in modern history who has single-handedly stopped a war. Lone individuals

have started wars, but Gandhi was creative enough to stop one. He did so by mobilizing networks of people to pursue a clear

vision and set of values. Gandhi would probably have been completely noncreative and ineffective had he not been adept at

capitalizing on incubation dynamics. By mobilizing people to march to the sea to make salt, or to burn passes that demarcated

ethnic group status, Gandhi was able to engender creative outcomes that had not been considered possible. He was a master at

incubation by connecting, involving, and coordinating people (Whetten & Camerson, 2007).”

While no one of these four types of creativity is best, they have some contradictory or conflicting characteristics.

For example, imagination and improvement emphasize different approaches to creativity. The size of the new

idea, for instance, is typically much bigger with imagination (i.e., revolutionary solutions) than with improvement

(i.e., incremental solutions). Investment and incubation also are very different—investment is relatively fast, and

the other relatively slow (i.e., incubation emphasizes deliberation and development).

Creativity ToolsCreativity Tools

In this section, we introduce you to two creativity tools: SCAMPER and the Nominal Group Technique. This set

of tools is not exhaustive but gives you some good intuition and resources to develop new ideas—either to craft a

vision for a new company or revise an existing mission and vision. The first three tools can be used and applied

individually or in groups; Nominal Group Technique is designed to bolster creativity in groups and can build on

individual and group insights provided by the other tools.

All these tools help you to manage two divergent forms of thinking necessary for creativity—programmed

thinking and lateral thinking. Programmed thinking often called left-brained thinking, relies on logical or

structured ways of creating a new product or service. In terms of mission and vision, this means a logical and

deliberate process is used to develop the vision statement. Lateral thinking a term coined by Edward DeBono in

his book The Use of Lateral Thinking (1967), is about changing patterns and perceptions; it is about ideas that may

not be obtainable by using only traditional step-by-step, programmed, logic (De Bono, 1992). Lateral thinking

draws on the right side of our brains.

Each type of approach—programmed versus lateral—has its strength. Logical and disciplined programmed

thinking is enormously effective in making products and services better. It can, however, only go so far before all

practical improvements have been carried out. Lateral thinking can generate completely new concepts and ideas

and brilliant improvements to existing systems. In the wrong place, however, it can be impractical or unnecessarily

disruptive.

SCAMPERSCAMPER

Developed by Bob Eberle, SCAMPER is a checklist tool that helps you to think of changes you can make to an

existing marketplace to create a new one—a new product, a new service, or both (Eberle, 1997). You can use

these changes either as direct suggestions or as starting points for lateral thinking. This, in turn, can inspire a new

vision statement. Table 4.1 “Creativity through SCAMPER” provides you with the SCAMPER question steps and

examples of new products or services that you might create.

Table 4.1 Creativity through SCAMPER

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Questions: Examples:

Substitute: What else instead? Who else instead? Other ingredients? Other material? Other time? Other place?

Vegetarian hot dogs

Combine: How about a blend? Combine purposes? Combine materials? Musical greeting cards

Adapt: What else is like this? What other idea does this suggest? How can I adjust to these circumstances?

Snow tires

Modify: Different order, form, shape? Minify: What to make smaller? Slower? Lighter? What to do with less frequency? Magnify: What to make higher? Longer? Thicker? What to do with greater frequency?

Scented crayons; Bite-sized Snickers bars; Super-sized french fries

Put to other uses: New ways to use as is? Other uses I modified? Other places to use an item or movement?

Towel as fly swatter

Eliminate: What to remove? Omit? Understate? Cordless telephone

Rearrange: Other layout? Other sequence? Transpose cause and effect? Transpose positive and negative? How about opposites? Reverse: Interchange components? Other pattern? Backward? Upside down?

Vertical stapler; Reversible clothing

As shown in the Table 4.1 “Creativity through SCAMPER”, by taking a topic or problem and then using

SCAMPER, you can generate possible new products. It may be some combination of these SCAMPER changes

that lead to highly innovative solutions. For instance, the entertainment company Cirque du Soliel has modeled

its shows on the traditional circus. However, it has adapted aspects of theater and opera, eliminated animals, and

reduced the number of rings from three to one. As a result, it offers a highly stylized (and much more expensive!)

version of what, nostalgically, we call a circus today. Many of the ideas may be impractical. However, some of

these ideas could be good starting points for a new organization or revision of the vision for an existing one.

Nominal Group TechniqueNominal Group Technique

The Nominal Group Technique (NGT) is a method of facilitating a group of people to produce a large number of

ideas in a relatively short time.1 In addition to using NGT to develop a mission and vision statement, it can be

useful:

• To generate numerous creative ideas

• To ensure everyone is heard

• When there is concern that some people may not be vocal

• To build consensus

• When there is controversy or conflict

As shown in “NGT Preparation and Supplies,” preparation and supplies are modest. It encourages contributions

from everyone by allowing for equal participation among group members. A question is posed to the group.

Individually and silently, each participant writes down his or her ideas. In round-robin fashion, each member

supplies an idea until all ideas are shared. Generally, 6 to 10 people participate. “Nominal” means that the

participants form a group in name only. For most of the session, they do not interact as they would in other group

processes.

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NGT Preparation and SuppliesNGT Preparation and Supplies

Formulate your discussion question. Ensure that the wording prevents misunderstanding and is objective. Supplies needed include:

• Flip chart for each table

• Masking tape

• 3 × 5 cards for each participant

• Work tables

• Felt pens

The group is divided into small work groups, each with a leader. A flip chart and markers are needed at each table.

Position the flip chart so that all can see the ideas. The remaining simple procedures are summarized in “NGT

Procedure.”

NGT ProcedureNGT Procedure

1. Introduction: Briefly welcome participants, clarify the purpose of the group exercise, and explain the procedure to be followed and how results are to be used.

2. Present question: Orally present the question that is written on the flip chart; clarify as needed.

3. Silent generation of ideas: Each participant silently thinks of and writes down (on 3 × 5 card) as many ideas as possible. Allow 5 to 10 minutes.

4. Record ideas: In turn, each participant reads aloud one idea, and it is recorded on the flip chart for all to see.

5. Continue until all ideas are recorded.

6. Discourage discussion, not even questions for clarification.

7. Encourage “hitchhiking,” that is, expanding on another’s statement. Ideas do not have to be from the participant’s written list.

8. Participants may pass a turn and then add an idea at a subsequent turn.

9. Discourage combining ideas from individuals unless they are exactly the same.

10. Group discussion: After all ideas are recorded, the person who suggested the idea is given the opportunity to explain it further.

11. Duplicates may be combined.

12. Wording may be changed if the originator agrees.

13. Ideas are deleted only by unanimous agreement.

14. Restrict discussion to clarify meaning; the value or merit of ideas is not discussed.

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Passion and VisionPassion and Vision

Passion as we invoke the term in this chapter, refers to intense, driving, or overmastering feeling or conviction.

Passion is also associated with intense emotion compelling action. Passion is relevant to vision in at least two

ways: (1) Passion about an idea as inspiration of the vision and vision statement and (2) shared passion among

organizational members about the importance of the vision.

Passion as InspirationPassion as Inspiration

Entrepreneur Curt Rosengren makes this observation about the relationship between passion and

entrepreneurship: “Strangely, in spite of its clear importance, very few entrepreneurs or managers consciously

incorporate passion into their decisions, ultimately leaving one of their most valuable assets on their path to

success largely to chance, even though there is little question that passion can be a part of vision creation

(Astroprojects, 2008).” Rosengren comments further that:

“Passion is the essence of the entrepreneurial spirit. It is an entrepreneur’s fuel, providing the drive and inspiration to create

something out of nothing while enduring all the risks, uncertainty, and bumps in the road that that entails.

“Entrepreneurs’ lives consist of a nonstop mission to communicate their vision and inspire others to support their efforts. As

evangelists, salespeople, fundraisers, and cheerleaders they need to breathe life into their vision while enlisting others in their

dream. From creating a vision for the future to selling the idea to investors, from attracting high-quality employees to inspiring

them to do what nobody thought possible, that passion is a key ingredient.

“Passion also plays a key role in their belief that they can achieve the so-called impossible, bouncing back from failure and

ignoring the chorus of No that is inevitably part of the entrepreneurial experience.

“Robin Wolaner, founder of Parenting magazine and author of Naked In The Boardroom: A CEO Bares Her Secrets So You

Can Transform Your Career, put it succinctly when she said, ‘To succeed in starting a business you have to suspend disbelief,

because the odds are against you. Logic is going to stop you.’ Passion, on the other hand, will help you fly (Astroprojects,

2008).”

Passion About the VisionPassion About the Vision

Passion doesn’t just have benefits for the individual entrepreneur or manager when formulating a vision statement,

it can help the whole business thrive. While there is little academic research on the relationship between passion

and vision, studies suggest that fostering engagement, a concept related to passion, in employees has a significant

effect on the corporate bottom line. Gallup, for instance, has been on the forefront of measuring the effect of

what it calls employee engagement. Employee engagement is a concept that is generally viewed as managing

discretionary effort; that is, when employees have choices, they will act in a way that furthers their organization’s

interests. An engaged employee is fully involved in, and enthusiastic about, his or her work (Gallup, 2008). The

consulting firm BlessingWhite offers this description of engagement and its value (and clear relationship with

passion):

“Engaged employees are not just committed. They are not just passionate or proud. They have a line-of-sight on their own

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future and on the organization’s mission and goals. They are ‘enthused’ and ‘in gear’ using their talents and discretionary effort

to make a difference in their employer’s quest for sustainable business success(Employee Engagement Report, 2008).”

Engaged employees are those who are performing at the top of their abilities and happy about it. According

to statistics that Gallup has drawn from 300,000 companies in its database, 75%–80% of employees are either

“disengaged” or “actively disengaged (Gallup, 2008).”

That’s an enormous waste of potential. Consider Gallup’s estimation of the impact if 100% of an organization’s

employees were fully engaged:

• Customers would be 70% more loyal.

• Turnover would drop by 70%.

• Profits would jump by 40%.

Job satisfaction studies in the United States routinely show job satisfaction ratings of 50%–60%. But one recent

study by Harris Interactive of nearly 8,000 American workers went a step further (Age Wave, 2008). What did the

researchers find?

• Only 20% feel very passionate about their jobs.

• Less than 15% agree that they feel strongly energized by their work.

• Only 31% (strongly or moderately) believe that their employer inspires the best in them.

Consciously creating an environment where passion is both encouraged and actively developed can yield an

enormous competitive advantage. That environment starts at the top through the development and active

communication of mission and vision.

Key Takeaway

You learned about the relationship between creativity and passion and mission and vision. You learned that creativity relates to the power or ability to create and that passion is intense emotion compelling action. Creativity is important if the desired mission and vision are desired to be novel and entrepreneurial; passion is important both from the standpoint of adding energy to the mission and vision and to key stakeholders following the mission and vision.

Exercises

1. What is creativity?

2. Why is creativity relevant to vision and vision statements?

3. What are some useful creativity tools?

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4. What is passion?

5. Why is passion relevant to vision and vision statements?

6. What is the relationship between passion and engagement?

1This section is reproduced with permission of the University of Wisconsin Extension Program. A circulation

version can be found at http://www.uwex.edu/ces/pdande/resources/pdf/Tipsheet3.pdf (retrieved October 28,

2008). Additional information on NGT can be gained by reading the following: Delbecq, A., Van de Ven, A.,

& Gustafson, D. (1975). Group Techniques for Program Planning: A Guide to Nominal Group and Delphi

Processes. Glenview, IL: Scott, Foresman; Tague, N. (1995). The Quality Toolbox. Milwaukee, WI: ASQC

Quality Press; Witkin, B., & Altschuld, J. (1995). Planning and Conducting Needs Assessment: A Practical

Guide. Thousands Oaks, CA, Sage.

ReferencesReferences

Age Wave, retrieved October 29, 2008, from http://www.agewave.com/media_files/rough.html.http://.

Astroprojects, retrieved October 28, 2008, from http://www.astroprojects.com/media/MSPassion8.html.

Biz Journals, retrieved October 27, 2008, from http://www.bizjournals.com/milwaukee/stories/2004/05/31/

story7.html.

BlessingWhite. (2008, April). 2008 employee engagement report. http://www.blessingwhite.com/eee__report.asp.

De Bono, E. (1992). Serious Creativity. New York: Harper Business; Osborn, A. (1953). Applied Imagination.

New York: Scribner’s.Eberle, R. (1997). Scamper: Creative Games and Activities for Imagination Development.

New York: Prufrock Press.

DeGraf, J., & Lawrence, K. A. (2002). Creativity at Work: Developing the Right Practices to Make It Happen.

San Francisco: Jossey-Bass.

Eberle, R. (1997). Scamper: Creative Games and Activities for Imagination Development. New York: Prufrock

Press.

Gallup, href=”http://www.gallup.com/consulting/52/Employee-Engagement.aspx”>http://www.gallup.com/

consulting/52/Employee-Engagement.aspx.

Gallup, retrieved October 28, 2008, from http://gmj.gallup.com/content/24880/Gallup-Study-Engaged-

Employees-Inspire-Company.aspx.

Whetten, D., & Camerson, K. (2007). Developing Management skills. (7th ed.). Upper Saddle River, NJ: Pearson/

Prentice-Hall, 185.

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4.6 Stakeholders

Learning Objectives

1. Learn about stakeholders and their importance.

2. Understand stakeholder analysis.

3. Be able to map stakeholders and their level of participation.

Figure 4.9

Government tends to be a key stakeholder for every organization.

Kevin Harber – GOVERNMENT – CC BY-NC-ND 2.0.

Stakeholders and Stakeholder AnalysisStakeholders and Stakeholder Analysis

Stakeholders are individuals or groups who have an interest in an organization’s ability to deliver intended results

169

and maintain the viability of its products and services. We’ve already stressed the importance of stakeholders

to a firm’s mission and vision. We’ve also explained that firms are usually accountable to a broad range of

stakeholders, including shareholders, who can make it either more difficult or easier to execute a strategy and

realize its mission and vision. This is the main reason managers must consider stakeholders’ interests, needs, and

preferences.

Considering these factors in the development of a firm’s mission and vision is a good place to start, but first,

of course, you must identify critical stakeholders, get a handle on their short- and long-term interests, calculate

their potential influence on your strategy, and take into consideration how the firms strategy might affect the

stakeholders (beneficially or adversely). Table 4.2 “Stakeholder Categories” provides one way to begin thinking

about the various stakeholder groups, their interests, importance, and influence. Influence reflects a stakeholder’s

relative power over and within an organization; importance indicates the degree to which the organization cannot

be considered successful if a stakeholder’s needs, expectations, and issues are not addressed.

Table 4.2 Stakeholder Categories

Stakeholder Categories Interests Importance Influence

Owners

Managers

Employees

Customers

Environmental

Social

Government

Suppliers

Competitors

Other?

Adapted from http://www.stsc.hill.af.mil/crosstalk/2000/12/smith.html.

As you can imagine, for instance, one key stakeholder group comprises the CEO and the members of the top-

management team. These are key managers, and they might be owners as well. This group is important for at least

three reasons:

1. Its influence as either originator or steward of the organization’s mission and vision.

2. Its responsibility for formulating a strategy that realizes the mission and vision.

3. Its ultimate role in strategy implementation.

Typically, stakeholder evaluation of both quantitative and qualitative performance outcomes will determine

whether management is effective. Quantitative outcomes include stock price, total sales, and net profits, while

qualitative outcomes include customer service and employee satisfaction. As you can imagine, different

stakeholders may place more emphasis on some outcomes than other stakeholders, who have other priorities.

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Stakeholders, Mission, and VisionStakeholders, Mission, and Vision

Stakeholder analysis refers to the range of techniques or tools used to identify and understand the needs and

expectations of major interests inside and outside the organization environment. Managers perform stakeholder

analysis to gain a better understanding of the range and variety of groups and individuals who not only have a

vested interest in the organization, and ultimately the formulation and implementation of a firm’s strategy, but

who also have some influence on firm performance. Managers thus develop mission and vision statements, not

only to clarify the organization’s larger purpose but also to meet or exceed the needs of its key stakeholders.

Stakeholder analysis may also enable managers to identify other parties that might derail otherwise well-

formulated strategies, such as local, state, national, or foreign governmental bodies. Finally, stakeholder analysis

enables organizations to better formulate, implement, and monitor their strategies, and this is why stakeholder

analysis is a critical factor in the ultimate implementation of a strategy.

Identifying StakeholdersIdentifying Stakeholders

The first step in stakeholder analysis is identifying major stakeholder groups. As you can imagine, the groups of

stakeholders who will, either directly or indirectly, be affected by or have an effect on a firm’s strategy and its

execution can run the gamut from employees, to customers, to competitors, to the government. Ultimately, we

will want to take these stakeholders and plot them on a chart, similar to that shown in the following figure.

Figure 4.10 Stakeholder Mapping

Adapted from Freeman, R. E. (1984). Strategic Management: A Stakeholder Approach. Boston: Pitman.

Let’s pause for a moment to consider the important constituencies we will be charting on our stakeholder

map. Before we start, however, we need to remind ourselves that stakeholders can be individuals or

groups—communities, social or political organizations, and so forth. In addition, we can break groups down

4 . 6 S T A K E H O L D E R S • 1 7 1

demographically, geographically, by level and branch of government, or according to other relevant criteria. In so

doing, we’re more likely to identify important groups that we might otherwise overlook.

With these facts in mind, you can see that, externally, a map of stakeholders will include such diverse groups as

governmental bodies, community-based organizations, social and political action groups, trade unions and guilds,

and even journalists. National and regional governments and international regulatory bodies will probably be

key stakeholders for global firms or those whose strategy calls for greater international presence. Internally, key

stakeholders include shareholders, business units, employees, and managers.

Steps in Identifying StakeholdersSteps in Identifying Stakeholders

Identifying all of a firm’s stakeholders can be a daunting task. In fact, as we will note again shortly, a list

of stakeholders that is too long actually may reduce the effectiveness of this important tool by overwhelming

decision makers with too much information. To simplify the process, we suggest that you start by identifying

groups that fall into one of four categories: organizational, capital market, product market, and social. Let’s take

a closer look at this step.

Step 1: Determining Influences on Mission, Vision, and Strategy Formulation. One way to analyze the importance

and roles of the individuals who compose a stakeholder group is to identify the people and teams who should

be consulted as strategy is developed or who will play some part in its eventual implementation. These are

organizational stakeholders, and they include both high-level managers and frontline workers. Capital-market

stakeholders are groups that affect the availability or cost of capital—shareholders, venture capitalists, banks, and

other financial intermediaries. Product-market stakeholders include parties with whom the firm shares its industry,

including suppliers and customers. Social stakeholders consist broadly of external groups and organizations that

may be affected by or exercise influence over firm strategy and performance, such as unions, governments, and

activist groups. The next two steps are to determine how various stakeholders are affected by the firm’s strategic

decisions and the degree of power that various stakeholders wield over the firm’s ability to choose a course of

action.

Step 2: Determining the Effects of Key Decisions on the Stakeholder. Step 2 in stakeholder analysis is to determine

the nature of the effect of the firm’s strategic decisions on the list of relevant stakeholders. Not all stakeholders

are affected equally by strategic decisions. Some effects may be rather mild, and any positive or negative effects

may be secondary and of minimal impact. At the other end of the spectrum, some stakeholders bear the brunt of

firm decisions, good or bad.

In performing step 1, companies often develop overly broad and unwieldy lists of stakeholders. At this stage,

it’s critical to determine the stakeholders who are most important based on how the firm’s strategy affects the

stakeholders. You must determine which of the groups still on your list have direct or indirect material claims

on firm performance or which are potentially adversely affected. For instance, it is easy to see how shareholders

are affected by firm strategies—their wealth either increases or decreases in correspondence with the firm’s

actions. Other parties have economic interests in the firm as well, such as parties the firm interacts with in

the marketplace, including suppliers and customers. The effects on other parties may be much more indirect.

For instance, governments have an economic interest in firms doing well—they collect tax revenue from them.

However, in cities that are well diversified with many employers, a single firm has minimal economic impact on

what the government collects. Alternatively, in other areas, individual firms represent a significant contribution

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to local employment and tax revenue. In those situations, the effect of firm actions on the government would be

much greater.

Step 3: Determining Stakeholders’ Power and Influence over Decisions. The third step of a stakeholder analysis

is to determine the degree to which a stakeholder group can exercise power and influence over the decisions

the firm makes. Does the group have direct control over what is decided, veto power over decisions, nuisance

influence, or no influence? Recognize that although the degree to which a stakeholder is affected by firm decisions

(i.e., step 2) is sometimes highly correlated with their power and influence over the decision, this is often not

the case. For instance, in some companies, frontline employees may be directly affected by firm decisions but

have no say in what those decisions are. Power can take the form of formal voting power (boards of directors and

owners), economic power (suppliers, financial institutions, and unions), or political power (dissident stockholders,

political action groups, and governmental bodies). Sometimes the parties that exercise significant power over firm

decisions don’t register as having a significant stake in the firm (step 2). In recent years, for example, Wal-Mart

has encountered significant resistance in some communities by well-organized groups who oppose the entry of the

mega-retailer. Wal-Mart executives now have to anticipate whether a vocal and politically powerful community

group will oppose its new stores or aim to reduce their size, which decreases Wal-Mart’s per store profitability.

Indeed, in many markets, such groups have been effective at blocking new stores, reducing their size, or changing

building specifications.

Once you’ve determined who has a stake in the outcomes of the firm’s decisions as well as who has power over

these decisions, you’ll have a basis on which to allocate prominence in the strategy-formulation and strategy-

implementation processes. The framework in the figure will also help you categorize stakeholders according to

their influence in determining strategy versus their importance to strategy execution. For one thing, this distinction

may help you identify major omissions in strategy formulation and implementation.

Having identified stakeholder groups and differentiated them by how they are affected by firm decisions and the

power they have to influence decisions, you’ll want to ask yourself some additional questions:

• Have I identified any vulnerable points in either the strategy or its potential implementation?

• Which groups are mobilized and active in promoting their interests?

• Have I identified supporters and opponents of the strategy?

• Which groups will benefit from successful execution of the strategy and which may be adversely affected?

• Where are various groups located? Who belongs to them? Who represents them?

The stakeholder-analysis framework summarized in the figure is a good starting point. Ultimately, because

mission and vision are necessarily long term in orientation, identifying important stakeholder groups will help you

to understand which constituencies stand to gain or to lose the most if they’re realized.

Two ChallengesTwo Challenges

Two of the challenges of performing stakeholder analysis are determining how stakeholders are affected by a

firm’s decisions and how much influence they have over the implementation of the decisions that are made. Many

people have a tendency to fall into the trap of assessing all stakeholders as being important on both dimensions. In

4 . 6 S T A K E H O L D E R S • 1 7 3

reality, not all stakeholders are affected in the same way and not all stakeholders have the same level of influence

in determining what a firm does. Moreover, when stakeholder analysis is executed well, the resulting strategy has

a better chance of succeeding, simply because the entities you might rely on in the implementation phase were

already involved in the strategy starting with the formulation phase. Thus, you now have a good idea of how to

engage various stakeholders in all the stages of the P-O-L-C framework.

Key Takeaway

This section introduced stakeholders, their roles, and how to begin assessing their roles in the development of the organization’s mission and vision. While any person or organization with a stake in your organization is a stakeholder, managers are most concerned with those stakeholders who have the most influence on, or will be most influenced by, the organization. On the basis of your assessment of stakeholders, you now can be proactive in involving them in the P-O-L-C stages.

Exercises

1. What are stakeholders, and why are they relevant to mission and vision?

2. Are stakeholders equally relevant to all parts of P-O-L-C, or only mission and vision?

3. What is stakeholder analysis? What are the three identification steps?

4. How does stakeholder analysis help you craft a mission and vision statement?

5. Which important stakeholders might you intentionally exclude from a mission or vision statement?

6. What are the risks of not conducting stakeholder analysis as an input to the formulation of your mission and vision?

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4.7 Crafting Mission and Vision Statements

Learning Objectives

1. Learn about the basics of the mission and vision development process.

2. Understand the content of good mission and vision statements.

Communicating and Monitoring Mission and VisionCommunicating and Monitoring Mission and Vision

At this point, you have an understanding of what a mission and vision statement is and how creativity, passion,

and stakeholder interests might be accounted for. The actual step-by-step process of developing a mission and

vision might start with the mission and vision statements, but you should think of this process more broadly in

terms of multiple steps: (1) the process, (2) the content of the mission and vision statements, (3) communicating

mission and vision to all relevant stakeholders, and (4) monitoring. As shown in “Process, Content, Application,

and Monitoring in Mission and Vision Development,” Information Week contributor Sourabh Hajela breaks out

one way you might manage your mission/vision development checklist. Let’s dive in to the development process

first.

Mission and vision statements are statements of an organization’s purpose and potential; what you want the

organization to become. Both statements should be meaningful to you and your organization. It should be shared

with all of the employees in the organization to create a unified direction for everyone to move in.

175

Figure 4.11

OLYMPUS DIGITAL CAMERA

While crafting a mission and vision is not easy, it helps to follow the right steps.

tanakawho – Stepping stones – CC BY-NC 2.0.

Process, Content, Application, and Monitoring in Mission and Vision DevelopmentProcess, Content, Application, and Monitoring in Mission and Vision Development •

• Let the business drive the mission and vision.

• Involve all stakeholders in its development; otherwise, they won’t consider it theirs.

• Assign responsibility so that it’s clear how each person, including each stakeholder, can contribute.

• Seek expert facilitation to reach a vision supported by all.

• Revise and reiterate; you’ll likely go through multiple iterations before you’re satisfied. •

• Start from where you are to get to where you want to go.

• Build in the values of the organization: Every organization has a soul. Tap into yours, and adjust as needed. Mission and vision built on your values will not just hold promise but also deliver on it.

• Build on the core competencies of the organization: A mission and vision are useless if they can’t be put into operation. This requires recognition of your organization’s strengths and weaknesses.

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• Factor in your style: A mission and vision must reflect the leader’s style. You can’t sustain action that goes against it.

• Make it visual: A picture is worth a thousand words.

• Make it simple to understand: Complex language and disconnected statements have little impact—people can’t implement what they don’t understand.

• Make it achievable: A mission and vision are an organization’s dreams for the future. Unachievable goals discourage people.

• Phase it in: Reach for the sky—in stages.

• Make it actionable: If it’s too abstract, no one knows what to do next. •

• Communicate often: Internal communications are the key to success. People need to see the mission and vision, identify with them, and know that leadership is serious about it.

• Create messages that relate to the audience: To adopt a mission and vision, people must see how they can achieve it, and what’s in it for them.

• Create messages that inspire action: It’s not what you say, but how you say it. •

• Use it: Beyond printing it, posting it, and preaching it, you also need to practice what is laid out in the mission and vision…“walk the talk”

• Live it: Management must lead by example.

• Be real: It’s better to adjust the mission statement as needed than to not live up to the standards it sets.

•

• Identify key milestones: While traveling to your destination, acknowledge the milestones along the way.

• Monitor your progress: A strategic audit, combined with key metrics, can be used to measure progress against goals and objectives.

• Use external audit team: An external team brings objectivity, plus a fresh perspective.

Sourabh Hajela

Adapted from http://www.informationweek.com/news/management/ showArticle.jhtml?articleID=17500069 (retrieved October 29, 2008).

Mission and Vision-Development ProcessMission and Vision-Development Process

Mission and vision development are analogous to the “P” (planning) in the P-O-L-C framework. Start with the

people. To the greatest extent possible, let those people responsible for executing the mission and vision drive

their development. Sometimes this means soliciting their input and guiding them through the development of the

actual statements, but ideally, it means teaching them how to craft those statements themselves. Involve as many

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key stakeholders as possible in its development; otherwise, they won’t consider it theirs. Assign responsibility so

that it’s clear how each person, including each stakeholder, can contribute.

ContentContent

The content of the mission and vision statements are analogous to the O (organizing) part of the P-O-L-C

framework. Begin by describing the best possible business future for your company, using a target of 5 to 10 years

in the future. Your written goals should be dreams, but they should be achievable dreams. Jim Collins (author of

Good to Great) suggests that the vision be very bold, or what he likes to call a BHAG—a big, hairy, audacious

goal—like the United State’s goal in the 1960s to go to the moon by the end of the decade, or Martin Luther

King’s vision for a nonracist America.

Recognizing that the vision statement is derived from aspects of the mission statement, it is helpful to start there.

Richard O’ Hallaron and his son, David R. O’ Hallaron, in The Mission Primer: Four Steps to an Effective

Mission Statement, suggest that you consider a range of objectives, both financial and nonfinancial (O’Hallaron

& O’Hallaron, 2000). Specifically, the O’Hallarons find that the best mission statements have given attention to

the following six areas:

1. What “want-satisfying” service or commodity do we produce and work constantly to improve?

2. How do we increase the wealth or quality of life or society?

3. How do we provide opportunities for the productive employment of people?

4. How are we creating a high-quality and meaningful work experience for employees?

5. How do we live up to the obligation to provide fair and just wages?

6. How do we fulfill the obligation to provide a fair and just return on capital?

When writing your statements, use the present tense, speaking as if your business has already become what

you are describing. Use descriptive statements describing what the business looks like, feels like, using words

that describe all of a person’s senses. Your words will be a clear written motivation for where your business

organization is headed. Mission statements, because they cover more ground, tend to be longer than vision

statements, but you should aim to write no more than a page. Your words can be as long as you would like them

to be, but a shorter vision statement may be easier to remember.

CommunicationsCommunications

The communications step of the mission and vision statements development process is analogous to the “L”

(leading) part of the P-O-L-C framework. Communicate often: Internal communications are the key to success.

People need to see the vision, identify with it, and know that leadership is serious about it.

Managers must evaluate both the need and the necessary tactics for persuasively communicating a strategy in four

different directions: upward, downward, across, and outward (Hambrick & Cannella, 1989).

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Communicating UpwardCommunicating Upward

Increasingly, firms rely on bottom-up innovation processes that encourage and empower middle-level and division

managers to take ownership of mission and vision and propose new strategies to achieve them. Communicating

upward means that someone or some group has championed the vision internally and has succeeded in convincing

top management of its merits and feasibility.

Communicating DownwardCommunicating Downward

Communicating downward means enlisting the support of the people who’ll be needed to implement the mission

and vision. Too often, managers undertake this task only after a strategy has been set in stone, thereby running the

risk of undermining both the strategy and any culture of trust and cooperation that may have existed previously.

Starting on the communication process early is the best way to identify and surmount obstacles, and it usually

ensures that a management team is working with a common purpose and intensity that will be important when it’s

time to implement the strategy.

Communicating Across and OutwardCommunicating Across and Outward

The need to communicate across and outward reflects the fact that realization of a mission and vision will

probably require cooperation from other units of the firm (across) and from key external stakeholders, such as

material and capital providers, complementors, and customers (outward). Internally, for example, the strategy

may call for raw materials or services to be provided by another subsidiary; perhaps it depends on sales leads

from other units. The software company Emageon couldn’t get hospitals to adopt the leading-edge visualization

software that was produced and sold by one subsidiary until its hardware division started cross-selling the software

as well. This internal coordination required a champion from the software side to convince managers on the

hardware side of the need and benefits of working together.

ApplicationApplication

It is the successful execution of this step—actually using the mission and vision statements—that eludes most

organizations. “Yes, it is inconvenient and expensive to move beyond the easy path” and make decisions that

support the mission statement, says Lila Booth, a Philadelphia-area consultant who is on the faculty of the

Wharton Small Business Development Center. But ditching mission for expediency “is short-term thinking,” she

adds, “which can be costly in the end, costly enough to put a company out of business (Krattenmaker, 2002).” That

is not to say that a mission statement is written in stone. Booth cites her own consulting business. It began well

before merger mania but has evolved with the times and now is dedicated in significant part to helping merged

companies create common cultures. “Today, our original mission statement would be very limiting,” she says.

Even the most enthusiastic proponents acknowledge that mission statements are often viewed cynically by

organizations and their constituents. That is usually due to large and obvious gaps between a company’s words and

deeds. “Are there companies that have managers who do the opposite of what their missions statements dictate?

Of course,” says Geoffrey Abrahams, author of The Mission Statement Book. “Mission statements are tools, and

tools can be used or abused or ignored.…Management must lead by example. It’s the only way employees can

4 . 7 C R A F T I N G M I S S I O N A N D V I S I O N S T A T E M E N T S • 1 7 9

live up to the company’s mission statement (Abrahams, 1999).” Ultimately, if you are not committed to using the

mission statement then you are best advised not to create one.

MonitoringMonitoring

The monitoring step of the mission and vision statements development process is analogous to the “C”

(controlling) part of the P-O-L-C framework. Identify key milestones that are implied or explicit in the mission

and vision. Since mission and vision act like a compass for a long trip to a new land, as Information Week’s Hajela

suggests, “while traveling to your destination, acknowledge the milestones along the way. With these milestones

you can monitor your progress: A strategic audit, combined with key metrics, can be used to measure progress

against goals and objectives. To keep the process moving, try using an external audit team. One benefit is that an

external team brings objectivity, plus a fresh perspective (Information Week, 2008).” It also helps motivate your

team to stay on track.

Key Takeaway

This section described some of the basic inputs into crafting mission and vision statements. It explored how mission and vision involved initiation, determination of content, communication, application, and then monitoring to be sure if and how the mission and vision were being followed and realized. In many ways, you learned how the development of mission and vision mirrors the P-O-L-C framework itself—from planning to control (monitoring).

Exercises

1. Who should be involved in the mission and vision development process?

2. What are some key content areas for mission and vision?

3. Why are organizational values important to mission and vision?

4. Why is communication important with mission and vision?

5. To which stakeholders should the mission and vision be communicated?

6. What role does monitoring play in mission and vision?

ReferencesReferences

Abrahams, J. (1999). The Mission Statement Book: 301 Corporate Mission Statements from America’s Top

Companies. Berkeley: Ten Speed Press.

Hambrick, D. C., & Cannella, A. A. (1989). Strategy implementation as substance and selling. Academy of

Management Executive, 3(4), 278–285.

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Information Week, retrieved October 28, 2008, from http://www.informationweek.com/news/management/

showArticle.jhtml?articleID=17500069.

Krattenmaker, T. (2002). Writing a Mission Statement That Your Company Is Willing to Live. Boston: Harvard

Business School Press.

O’Hallaron, R., & O’Hallaron, D. (2000). The Mission Primer: Four Steps to an Effective Mission Statement,

Richmond: Mission Incorporated. Their approach is based on Gast’s Laws, a set of principles developed in the

1940s and 1950s by the late business professor Walter Gast. Among other ideas, Gast’s Laws hold that businesses

must be dedicated to more than making money if they are to succeed.

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4.8 Developing Your Personal Mission and Vision

Learning Objectives

1. Determine what mission and vision mean for you.

2. Develop some guidelines for developing your mission and vision.

Mission and vision are concepts that can be applied to you, personally, well beyond their broader relevance to the

P-O-L-C framework. Personal mission and vision communicate the direction in which you are headed, as well

as providing some explanation for why you are choosing one direction or set of objectives over others. Thinking

about and writing down mission and vision statements for your life can help provide you with a compass as you

work toward your own goals and objectives.

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Figure 4.12

Your mission and vision reflect your personal and professional purpose and direction.

Shawn Harquail – Kayak Tour of Mangroves, Lucayan National Park. – CC BY-NC 2.0.

Your Mission and VisionYour Mission and Vision

Note that the development of a personal mission and vision, and then a strategy for achieving them, are exactly

the opposite of what most people follow. Most people do not plan further ahead than their next job or activity (if

they plan their career at all). They take a job because it looks attractive, and then they see what they can do with

it. We advocate looking as far into the future as you can and deciding where you want to end up and what steps

will lead you there. In that way, your life and your career fit into some intelligent plan, and you are in control of

your own life.

GuidelinesGuidelines

The first step in planning a career is obviously a long-term goal. Where do you want to end up, ultimately? Do

you really want to be a CEO or president of the United States, now that you know what it costs to be either one?

There are a couple basic parts to this process.

BHAGBHAG

First, set out a bold vision—Jim Collins, author of Good to Great, describes this as a BHAG a big, hairy, audacious

goal.

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Five guiding criteria for good BHAGs is that they:

1. Are set with understanding, not bravado.

2. Fit squarely in the three circles of (a) what you are deeply passionate about (including your core values

and purpose), (b) what drives your economic logic, and (c) what differentiates you (what you can be the

best in the world at).

3. Have a long time frame—10 to 30 years.

4. Are clear, compelling, and easy to grasp.

5. Directly reflect your core values and core purpose.

ValuesValues

Second, sketch out your personal values, or “Guiding Philosophy”—a set of core values and principles like your

own Declaration of Independence.

ScheduleSchedule

Once the vision is set, you have to develop some long-term goal (or goals), then intermediate-term goals, and so

on. If you want to be President, what jobs will you have to take first to get there and when do you have to get

these jobs? Where should you live? What training do you need? What political connections do you need? Then

you have to set up an orderly plan for obtaining the connections and training that you need and getting into these

steppingstone jobs.

Finally, you need to establish short-term goals to fit clearly into a coherent plan for your entire career. Your next

job (if you are now a fairly young person) should be picked not only for its salary or for its opportunities for

advancement but for its chances to provide you with the training and connections you need to reach your long-

term goals. The job that is superficially attractive to you because it has a high salary, offers the opportunity for

immediate advancement, or is located in a desirable place may be a mistake from the standpoint of your long-term

career.

Five StepsFive Steps

Former business school professor, entrepreneur (founder of www.quintcareers.com), and colleague Randall S.

Hansen, PhD, has done a masterful job of assembling resources that aim to help your career, including an excellent

five-step plan for creating personal mission statements. With his generous permission, he has allowed us to

reproduce his five-step plan—adapted by us to encompass both mission and vision—in this section.

The Five-Step PlanThe Five-Step Plan

A large percentage of companies, including most of the Fortune 500, have corporate mission and vision

statements (Quint Careers, 2008). Mission and vision statements are designed to provide direction and thrust to

an organization, an enduring statement of purpose. A mission and vision statement act as an invisible hand that

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guides the people in the organization. A mission and vision statement explains the organization’s reason for being

and answers the question, “What business are we in?”

A personal mission and vision statement is a bit different from a company mission statement, but the fundamental

principles are the same. Writing a personal mission and vision statement offers the opportunity to establish what’s

important and perhaps make a decision to stick to it before we even start a career. Or it enables us to chart a new

course when we’re at a career crossroads. Steven Covey (in First Things First) refers to developing a mission

and vision statement as “connecting with your own unique purpose and the profound satisfaction that comes from

fulfilling it (Covey, 1994).”

A personal mission and vision statement helps job seekers identify their core values and beliefs. Michael

Goodman (in The Potato Chip Difference: How to Apply Leading Edge Marketing Strategies to Landing the Job

You Want) states that a personal mission statement is “an articulation of what you’re all about and what success

looks like to you (Goodman, 2001).” A personal mission and vision statement also allows job seekers to identify

companies that have similar values and beliefs and helps them better assess the costs and benefits of any new

career opportunity.

The biggest problem most job seekers face is not in wanting to have a personal mission and vision statement

but actually writing it. So, to help you get started on your personal mission and vision statement, here is a five-

step mission/vision-building process. Take as much time on each step as you need, and remember to dig deeply

to develop a mission and vision statement that is both authentic and honest. To help you better see the process,

Professor Hansen included an example of one friend’s process in developing her mission and vision statements.

Sample Personal Mission Statement DevelopmentSample Personal Mission Statement Development

1. Past success:

◦ developed new product features for stagnant product

◦ part of team that developed new positioning statement for product

◦ helped child’s school with fundraiser that was wildly successful

◦ increased turnout for the opening of a new local theater company

Themes: Successes all relate to creative problem solving and execution of a solution.

2. Core values:

◦ Hard working

◦ Industrious

◦ Creativity

◦ Problem solving

◦ Decision maker

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◦ Friendly

◦ Outgoing

◦ Positive

◦ Family-oriented

◦ Honest

◦ Intelligent

◦ Compassionate

◦ Spiritual

◦ Analytical

◦ Passionate

◦ Contemplative

Most important values:

◦ Problem solving

◦ Creativity

◦ Analytical

◦ Compassionate

◦ Decision maker

◦ Positive

Most important value:

◦ Creativity

3. Identify Contributions:

◦ the world in general: develop products and services that help people achieve what they want in life. To have a lasting effect on the way people live their lives.

◦ my family: to be a leader in terms of personal outlook, compassion for others, and maintaining an ethical code; to be a good mother and a loving wife; to leave the world a better place for my children and their children.

◦ my employer or future employers: to lead by example and demonstrate how innovative and problem-solving products can be both successful in terms of solving a problem and successful in terms of profitability and revenue generation for the organization.

◦ my friends: to always have a hand held out for my friends; for them to know they can always come to me with any problem.

◦ my community: to use my talents in such a way as to give back to my community.

4.

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Identify Goals:

Short term: To continue my career with a progressive employer that allows me to use my skills, talent, and values to achieve success for the firm.

Long term: To develop other outlets for my talents and develop a longer-term plan for diversifying my life and achieving both professional and personal success.

5. Mission Statement:

To live life completely, honestly, and compassionately, with a healthy dose of realism mixed with the imagination and dreams that all things are possible if one sets their mind to finding an answer.

Vision Statement:

To be the CEO of a firm that I start, that provides educational exercise experiences to K–6 schools. My company will improve children’s health and fitness, and create a lasting positive impact on their lives, and that of their children.

Step 1: Identify Past Successes. Spend some time identifying four or five examples where you have had personal

success in recent years. These successes could be at work, in your community, or at home. Write them down. Try

to identify whether there is a common theme—or themes—to these examples. Write them down.

Step 2: Identify Core Values. Develop a list of attributes that you believe identify who you are and what your

priorities are. The list can be as long as you need. Once your list is complete, see whether you can narrow your

values to five or six most important values. Finally, see whether you can choose the one value that is most

important to you. We’ve added “Generating Ideas for Your Mission and Vision” to help jog your memory and

brainstorm about what you do well and really like to do.

Step 3: Identify Contributions. Make a list of the ways you could make a difference. In an ideal situation, how

could you contribute best to:

• the world in general

• your family

• your employer or future employers

• your friends

• your community

Generating Ideas for Your Mission and VisionGenerating Ideas for Your Mission and Vision

A useful mission and vision statement should include two pieces: what you wish to accomplish and contribute and who you want to be, the character strengths and qualities you wish to develop. While this

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sounds simple, those pieces of information are not always obvious. Try these tools for generating valuable information about yourself.

Part I

1. Describe your ideal day. This is not about being practical. It is designed to include as many sides of you and your enthusiasms as possible: creative, competent, artistic, introverted, extraverted, athletic, playful, nurturing, contemplative, and so on.

2. Imagine yourself 132 years old and surrounded by your descendants or those descendants of your friends. You are in a warm and relaxed atmosphere (such as around a fireplace). What would you say to them about what is important in life? This exercise is designed to access the values and principles that guide your life.

3. Imagine that it is your 70th birthday (or another milestone in your life). You have been asked by national print media to write a press release about your achievements. Consider what you would want your family, friends, coworkers in your profession and in your community to say about you. What difference would you like to have made in their lives? How do you want to be remembered? This is designed to inventory your actions and accomplishments in all areas of your life.

Part II

Review your notes for these three exercises. With those responses in mind, reflect on questions 1, 2, and 3 above. Then write a rough draft (a page of any length) of your mission statement. Remember that it should describe what you want to do and who you want to be. This is not a job description. Carry it with you, post copies in visible places at home and work, and revise and evaluate. Be patient with yourself. The process is as important as the outcome. After a few weeks, write another draft. Ask yourself whether your statement was based on proven principles that you believe in, if you feel direction, motivation, and inspiration when you read it. Over time, reviewing and evaluating will keep you abreast of your own development.

Step 4: Identify Goals. Spend some time thinking about your priorities in life and the goals you have for yourself.

Make a list of your personal goals, perhaps in the short term (up to three years) and the long term (beyond three

years).

Step 5: Write Mission and Vision Statements. On the basis of the first four steps and a better understanding of

yourself, begin writing your personal mission and vision statements.

Final thoughts: A personal mission and vision statement is, of course, personal. But if you want to see whether you

have been honest in developing your personal mission and vision statement, we suggest sharing the results of this

process with one or more people who are close to you. Ask for their feedback. Finally, remember that mission and

vision statements are not meant to be written once and blasted into stone. You should set aside some time annually

to review your career, job, goals, and mission and vision statements—and make adjustments as necessary.

Key Takeaway

In this section, you learned how to think of mission and vision in terms of your personal circumstances, whether it is your career or other aspects of your life. Just as you might do in developing an organization’s

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vision statement, you were encouraged to think of a big, hairy audacious goal as a starting point. You also learned a five-step process for developing a personal vision statement.

Exercises

1. How does a personal mission and vision statement differ from one created for an organization?

2. What time period should a personal mission and vision statement cover?

3. What are the five steps for creating a personal mission and vision statement?

4. What type of goals should you start thinking about in creating a personal mission and vision?

5. How are your strengths and weaknesses relevant to mission and vision?

6. What stakeholders seem relevant to your personal mission and vision?

ReferencesReferences

Covey, S. R. (1994). First Things First. New York: Simon & Schuster.

Goodman, M. (2001). The Potato Chip Difference. New York: Dialogue Press.

Quint Careers, retrieved October 29, 2008, from http://www.quintcareers.com/

creating_personal_mission_statements.html. Reproduced and adapted with written permission from Randall S.

Hansen. The content of this work is his, and any errors or omissions are our responsibility.

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