Mission statement: Pie in the sky or bread on the table?
10 Sep 2012 - {{hitsCtrl.values.hits}}
By Lionel Wijesiri
From the many discussions with various executives, I found we share a common curiosity of the many lofty mission statements which many companies are known to have come up with. The most often asked question is: Does the management really apply the ideals contained in the mission statement? In the end, almost everyone agreed that mission statements are merely for show. Most companies would like to show that they too have it.
The mission statement is a very powerful tool if one knows how to use it well. An organisational mission is an organisation’s reason for existence and growth. It often reflects the values and beliefs of top managers in an organisation. A good mission statement inspires employees and provides a focus and direction for setting lower level objectives and guide employees in making decisions and establishes what the organisation does.
Aims and objectives are the ‘ends’ that an organisation seeks to achieve. It then has to decide the means to be used to achieve those ends, draw up a plan and devise a strategy. Most organisations have general or overall aims which they can break down into specific objectives or targets.
Sense of direction
By setting aims and objectives, companies give themselves a sense of purpose and direction. This provides a framework around which to create their plans. With an overall plan in place, a company can set particular targets and monitor its progress towards reaching them. Targets can vary from a sales target and/or a profits target to a zero-accident target.
Having a sense of direction and a coherent, the overall plan is particularly important to a global organisation like Michelin, which produces many different product lines worldwide.
One major challenge is to communicate the plan clearly to everyone in a form that they can understand and put into practice. Ten years ago, the Michelin Group, at the initiative of its managing partners, launched the ‘Michelin Performance and Responsibility’ approach. Based on the group’s traditional five values, it established a formal framework for the group’s day-to-day activities and responsibilities in all areas: Economic, social, environmental and ethical.
Michelin’s mission is ‘to make a sustainable contribution to progress in the mobility of people and goods by constantly enhancing freedom of movement, safety, efficiency and pleasure when on the move.’
The company intended to achieve this goal through the following means:
Ongoing active role both in public debate on future modes of transport and in researching relevant ways of transition towards sustainable mobility
Constant improvement of its products’ technical performance and its tyre-related services’ quality
Alongside its core activities, development of new technologies or products to support sustainable mobility
Delivery of appropriate messages to its customers, enabling them to adopt sound purchasing behaviours and positive attitudes towards road safety and environmental issues
Any organisation must be based on a sound economic footing in order to achieve its mission. As such, Michelin intended to remain the world No. one in tyres and mobility assistance, and to perform well over the long term.
Objectives
Having overall aims brings a sense of direction to everything Michelin does. These are then translated into particular objectives and targets for various areas:
Environmental policy: End-of-life tyre recovery, number of sites with a certified environmental management system
Employees: Safety at work, training, diversity
Markets and customers: Sales growth, market shares, product reliability, delivery
Economic performance: Operating margin, free cash flow, return on assets, level of investments
Production cost per tyre, production capacities, flexibility
Wherever possible, Michelin expressed its particular objectives or targets in a form that can be easily measured and monitored - that usually means using numbers. For example some of its economic objectives are to achieve:
A positive free cash flow
A 10% operating margin on average over the cycle
An economic performance well above the cost of capital employed
The Michelin Corporation today is the world’s number one tyre manufacturer with 19.4%* market share. To further strengthen its position and performance, Michelin pursues a global, targeted growth strategy focusing on high value-added segments and on expansion in the higher-growth markets while improving its productivity across the board.
Mission linking values
It is so easy for an organisation to busy itself with daily activities that it can become oblivious to its future, without reflecting or envisaging what can happen, without a mission or a sense of direction. Your organisation may be active in the short term; but, without a vision of the future, it will lose direction, purpose and control - those essential ingredients for success in the long term.
Here is one way of articulating for your organisation a mission linking values, purpose and mission.
Get ‘mission’ in context
Visionary organisations have two distinct, stand-out features - an enduring character that transcends all other things like products, bosses, management fads and technological breakthroughs and visible, vivid, real futures as yet unrealized. Mission helps to bring those two features to life.
Understand contributing factors
In ‘Built to Last: Successful Habits of Visionary Companies’, the authors identify three components that contribute to the articulation of a mission:
The core purpose - the organisation’s reason for being, its raison d’être
The core values - the three to five guiding principles important to those in the organisation
A desired future - a clear, compelling, unifying and enduring statement that you believe
By reflecting on these three areas, you will be well on the way to articulating your organisation’s mission; that is, a vibrant, energizing and specific description of what it will be like to achieve your mission.
Isolate core values
Only a few values can be considered as ‘core’ - those that define what you stand for - and are likely to be meaningful and inspirational only to those in the organisation. Ask a small selection of highly credible representatives from groups within your organisation such questions as these:
If you won the lottery and decided to retire, what core values, held in our organisation, would you continue to live by?
If you were to start a new organisation in a different line of work, what core values would you build into the business regardless of the industry?
What would you tell your children the core values that you hold at work and that you hope they will hold when they are working adults?
Leadership
The mission needs to be concrete and achievable. Sometimes a somewhat narrow focus on the organisation’s areas of strength and differentiation can help build alignment across the organisation and create a greater sense of purpose and direction for employees who otherwise might be distracted and confused.
Leaders can mirror and build upon the solidarity of their staff. When it comes to the qualities which employees believe have the greatest impact on employee engagement, those leaders who are able to inspire confidence and commitment, empower those around them (i.e., engage them in decision-making) and build effective teams rank most highly.
None of this is possible without a step change in the quality and frequency of communication. Yet, leaders may be torn: Invest time in internal communication or in relationships with customers and other external stakeholders? In reality, there is no trade off. Leaders must do both. There is an ever-present risk that employee confusion and unease will leak out the company and undo the outward facing work of the organisation’s leaders.
Leaders must also show that they are listening and that they welcome employee feedback. When their companies are on declining trajectories, there is no point in blaming external factors for setbacks rather than accept responsibility. Fact-based discussions can help take the emotional sting out of difficult situations.
Surviving in times of crisis is all about improving the chances of getting better outcomes. Working with employees to provide a realistic vision of the way forward for the organisation, providing opportunities to work together to achieve that mission and behaving with more humility can all help leaders succeed.
(The writer is a corporate director with over 25 years’ senior managerial experience. He can be contacted on [email protected])
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By Lionel Wijesiri.jpg)
