Diezemann & J. Dowling
- May 5, 2000
Without a clearly stated Purpose, Mission, Vision, and Values, employees,
including IT professionals, lack adequate guidance and boundaries of empowerment.
This lack of context is likely to result in them taking actions that are
consistent with their individual 'visions' but collectively fail to maximize
business value from their efforts.
vast majority of personnel who fill corporate ranks at all levels, show
up to work each day with the desire to do the right things and help make
their company successful. In high-performance companies there is little
confusion about what to do and why. In lower performing companies managers
often work at cross-purposes because their vision of what they are contributing
to is inconsistent with that of their peers.
Path to Clarity
Purpose, Mission, Vision, and Values are the cornerstones that guide strategy
creation and action. Despite their importance, there is a wide disparity
among individuals' definition and their resultant response to each. Similar
confusion exists with respect to their hierarchical interdependence. Confused
definitions coupled with misstated, ambiguous, or non-existent statements
create an environment that fosters dysfunctional, counter-productive,
and unaligned or misaligned behavior.
his recent article Built to Flip, published in Fast Company Magazine,
Built to Last author Jim Collins captures such misalignment with
the following observation:
can all point to companies that should have viewed themselves as "Built
not to last." Confronting that reality would have helped them understand
that they were never more than a project, a product, or a technology.
Lotus, VisiCorp, Netscape, Syntex, Coleco -- all of these companies would
have served themselves and the world better if they had accepted their
limited purpose from the outset. Ultimately, they squandered time and
resources that might have been applied more efficiently elsewhere."
Collins' reference to "squandered time and resources that might have been
applied more efficiently elsewhere," is a classical representation of
what we recognize as organizational misalignment; where energy and resources
expended are not synergistic and not contributing fully to the goals of
the company. Collins is highlighting that it is extremely important for
a company to have a crystal clear understanding of what it is about and
where it is going. In most companies this is assumed to be addressed by
the Mission/Vision, but the problems surrounding the domain of mission
and vision are three-fold:
- The determination
of exactly what constitutes a valid or appropriate mission, vision,
strategy, etc. is incredibly foggy. You can place 10 books by supposed
gurus side by side and have differing interpretations of what these
elements should look and sound like, as well as their hierarchical interdependence.
- Many companies
duck the truly hard work of defining these elements by creating platitudinal
statements, loaded with "generic goodness," that offer neither guidance
- When these elements
are highly ambiguous or left undefined, individuals within the company
will fill the gap by "making it up." When these elements are misstated,
intentionally or unintentionally, in a manner where what is stated does
not reflect true intent, it lays the groundwork for dysfunctional and
analysis will sort through much of the confusion, leverage some of the
better thinking that exists on the subject and lay out a framework for
defining a high-level organizational context that establishes direction
and guidance to enable aligned action.
A depicts the hierarchical relationship among the drivers of change in
any organization. This analysis will focus on the upper 5 levels of the
Organizational Context Pyramid spanning from a company's purpose to its
strategy. The lower, and much more dynamic, portion of the Organizational
Context Pyramid will be covered in greater depth in a future note.
does the company exist?
Does it stand for something (beyond profits)?
general terms it describes what business(es) the company
It describes the company's distinctive value proposition, what
differentiates it from competitors
It describes what the company will do, what benefits it will
deliver, to whom and to what extent.
provides a critical success premise that leaders can understand,
commit to, and dramatize to others.
paints a compelling and inspirational picture of where
the company will be (an ideal state) at some future date (when),
intimating how the company will look, feel and be.
Mission & Vision lie at the pinnacle of the Organizational Context Pyramid.
They are intended to establish a "true north" for the company as well
as provide inspiration for its employees. They are relatively stable and
change infrequently. They may remain intact, relevant and consistent for
In their book 'Jumping the Curve, Innovation and Strategic Choice in
an Age of Transition,' authors Nicholas Imparato and Oren Harari state:
years ago Peter Drucker advised executives to ask the question: What business
are we in? Today we can up the ante by challenging leaders and organizations
to choose what they stand for. To say that an organization "stands for"
profits says nothing at all. Yes, every organization needs profits just
like every body needs food but it is as absurd to say that the purpose
of an organization is to make money as it is to say that the purpose of
a human being is to eat or breath."
Many companies fail to isolate purpose as a singular statement, or believe
that it is inferred within the Mission Statement. Sometimes as well, the
company purpose may be inferred from a company motto or from the words
of a founder or Chief Executive. Sometimes they are written, often the
are not. Failure to explicitly isolate a Purpose weakens the communication
of a company's essence and works against employee empowerment. What is
important is that there is shared understanding of these concepts across
making money and creating shareholder value, companies are frequently
created for other (and sometimes less than obvious) purposes:
- Outdoor gear manufacturer
Patagonia exists to use business to inspire and implement solutions
to the environmental crisis.
- Ben & Jerry's
is dedicated to the creation & demonstration of a new corporate concept
of linked prosperity.
- The founding prospectus
for the company that would become Sony Corporation cited the primary
motive for its creation (in post-war Japan): "To create a stable work
environment where engineers who had a deep and profound appreciation
for technology could realize their societal mission and work to their
hearts content." The second of several Purposes of Incorporation was
"To reconstruct Japan and elevate the nations culture through dynamic
technological and manufacturing activities."
- Bose Corporation
founder Amar Bose once stated, "Research is the reason we exist." The
company's slogan "Better Sound through Research" was consistent with
corporate activities. The company has always done research and product
development outside of Sound, but for many years it has been the focus
of product development. Only when choosing the words for a marble-inlay
for the foyer of its new company headquarters building did the Purpose
of the company reveal itself to be "Better Products Through Research"
a much less confining statement that initially, caused a good deal of
The examples of Purposes given above talk mainly to the "why we exist"
question, but most say little about the business itself. Whereas many
texts intermix Purpose with Mission, a clear definition of Mission that
compliments a standalone Purpose was presented by George A. Steiner in
his book 'Strategic Planning':
statements identify the underlying design, aim or thrust of a company
Missions should be stated at least in both product and market terms Mission
statements, aside from providing general guides for strategic planning,
have specific relevance to the formulation of program strategies and the
nature of a business. Mission statements determine the competitive arena
in which a business operates.... they make it much easier the task of
identifying the opportunities and threats that must be addressed in the
planning process. They open up new opportunities, as well as new threats
when changed. They prevent people from "spinning their wheels" in working
on strategies and plans that may be considered completely inappropriate
by top management."
effect, the Mission of a company begins to define "What business we're
in, what we'll do, for whom and to what extent." Beyond "Purpose" which
states the companies reason for being, the Mission Statement, at a high
level, starts to scope out the space in which the company will compete,
which may be further clarified in terms of product types, customer types,
geography, etc. Mission statements provide focus, but they do not state
how the goals of the company will be accomplished.
following are some mission statements that reflect this level of abstraction:
- The Salvation
Army: is a worldwide evangelical Christian church, human service agency
and non-profit corporation. Its message is based on the Bible. Its ministry
is motivated by the love of God. Its mission is to preach the gospel
of Jesus Christ and to meet human needs in His name without discrimination.
- Deluxe Checks:
To provide all banks, S&L's and investment firms with error-free financial
instruments delivered in a timely fashion. Error-free means absolutely
no errors; timely means a 48-hour turnaround.
- Otis Elevator:
To provide any customer a means of moving people and things up, down
and sideways over short distances with a higher reliability than any
similar enterprise in the world.
should be able to look to the Mission Statement first to assess the appropriateness
of possible courses of action. These actions must be assessed for compatibility
with the mission. For a business that is clearly established as a retailer,
starting a consumer financing division is apparently far afield from the
retail business, but the appropriateness of such a move would be heavily
influenced by the company's Mission. If their mission was tightly focused
retail (i.e., resale of consumer products), then such a move would likely
be inappropriate. But, if their Mission is to meet the needs of a certain
consumer segment (i.e., provide consumer goods to middle income Americans),
then the action is not necessarily inconsistent. A Statement of Purpose
is a backstop should the Mission Statement fail to cover the issue.
will be times when a Mission must be revisited and redefined. This often
happens when an organization is undergoing radical transformation, stimulated
by a significant external event such as deregulation, new regulations
and/or the advent of e-commerce. In these cases, the organization frequently
must adopt an entirely new business model and a re-crafted Mission.
A vision statement can serve as the most powerful motivator at leaderships'
disposal. Vision describes "Where and When" - It paints a compelling picture
of the company at some future point in time. Many people cite President
Kennedy's challenge to land a man on the moon, and bring him safely back
alive before the end of the decade as a classic example of "a vision."
In his statement there was no question as to where we were going, and
when this must be achieved by. With this vision firmly implanted, the
focus and energy of all parties involved immediately moved down a level
in the Organizational Context Pyramid, to begin strategizing "how to make
Financial software developer Intuit's "Vision for 2010" (available on
it's web site) is remarkably bold in that it discusses the businesses
and industries that they will be in, their position within them and their
reputation. It describes the legacy that they've created (at this future
point in time) from servicing customers with a focus on quality; balance
between "evolution and revolution" that drives the products that they've
created; products have become an integral part of the daily lives of their
leaving plenty of room for the influence of unknown variables, they have
painted a detailed and compelling picture of a destination point in the
future. Managers can truly evaluate the plans and strategies they are
developing to assess whether they get the company closer to realizing
During a 1999 speech announcing the Windows CE operating system for portable
devices, Microsoft Chairman Bill Gates announced that Microsoft would
be revising its original vision of 'a PC in every home and on every desk,'
inferring that this context was limiting in a world that is seeing explosive
growth of portable devices. "This is the first time in our 25-year history
we've actually changed our vision statement," said Gates. This is a classic
example of how a Vision Statement must be periodically revisited and revised
to reflect new and previously unforeseeable change drivers impacting the
business. It also gives Microsoft employees the empowerment to explore
opportunities in new areas that previously would have appeared to be inconsistent
with the stated direction of the company.
is what propels a company forward, even in the face of discouraging odds.
If it is compelling and meaningful, individuals will embrace it on a personal
level and go to great lengths to make it happen. Every employee of a company
should be able to talk to it and about it, and explain how their daily
activities contribute to its realization. If they cannot, then the vision
probably hasn't been developed at the right level of abstraction, or management
has not developed a compelling case.
A set of deeply held beliefs that unify and inspire employees.
Define how employees see themselves and their employers.
The ideals, customs, institutions, etc., of a society toward which
the people of the group have an affective regard.
Establish behavioral norms for the company.
a business will win in its industry, utilizing its finite resources
to differentiate itself positively from its competitors, maximizing
its relative strengths against the forces at work in the business
environment to satisfy customer needs and move forward towards
organizational context and direction firmly established through the definition
of Purpose, Mission and Vision, the focus turns to achieving desired outcomes.
Without constraints, there would be virtually infinite possibilities.
But in reality, constraints exist; they can be voluntary (as defined by
values) or practical, forced by limited resources (which must be dealt
with via strategy). Values and Strategy offer important guidance for determining
the path that the company should pursue at the present time based upon
its knowledge about itself and its environment.
Values guide choices. They describe many of the qualitative aspects of
life within the organization on a day-to-day basis, and they frequently
describe what is truly important to the company. Values can be written
or unwritten, but everyone knows they exist. Virtually all aspects
of a company's culture are inextricably linked to its collective and individual
value system(s). Articulating values provides everyone with guiding lights,
ways of choosing among competing priorities and guidelines about how people
will work together.
Shared Values are of particular importance at the executive leadership
level, not only because employees look to their behaviors for clues as
to whether stated values are still valid but also because values cannot
be acted upon directly. Executive leadership controls the systems and
structures such as competency models and reward systems that must change
if there is going to be a shift in corporate values. If the systems and
structures do not shift, there will be no shift in values and corresponding
behaviors. In their book Results-Based Leadership, Ulrich, Zenger
& Smallwood cite a link between values and results:
"Leaders who understand their company's and their personal values build
lasting results. In the Tylenol-tampering incident, Johnson & Johnson
executives were willing to absorb short-term reduced investor results
because of their overriding commitment to producing ethical drugs. Lacking
clear values, rudderless leaders shift from goal to goal. With values,
while actions may change, the overall direction and focus stay clear."
Strategy is how the company commits to a certain path of action based
upon its understanding of where it wants to be (Vision), the dynamics
of the external business environment (including competitor actions, the
shifts in technology, the shifts in demographics, consumer behaviors,
politics, etc.), and the internal change forces.
is how the company determines the actions it must take in the marketplace
and how it will allocate finite resources to them This then places immediate
demand to deploy and/or create operational capabilities for strategy realization.
With this level of directional definition, a company can establish milestones
and metrics to propel it towards the realization of its vision.
Hamel and Prahalad provide an example of a rich Strategy in their article
Strategic Intent, where they discussed how Honda Motor Corp. pursued
its Vision of becoming "the second Ford," by first establishing itself
as a major player in the U.S. motorcycle market:
"When Honda took on leaders in the motorcycle industry it began with
products that were just outside the conventional definition of the leaders'
product-market domains. As a result, it could build a base of operations
in underdefended territory and then use that base to launch an expanded
attack. What many competitors failed to see was Honda's strategic intent
and its growing competence in engines and power trains. Yet even as Honda
was selling 50cc motorcycles in the U.S., it was already racing larger
bikes in Europe - assembling the design skills and technology it would
need for a systematic expansion across the entire spectrum of motor-related
Mission, Vision, and Values clarify thinking about what is important and
set the tone for actions that will produce business value. We have seen
many instances where companies become separate camps as a result of a
lack of clarity in these areas, as well as cases where Purpose, Mission,
Vision, and Values are clear but the senior executives refuse to commit
to them. We have also seen the negative impacts of conflicts between stated
Purpose, Mission, Vision, and Values and those held in the boardroom.
the other hand it is quite rare to find a case where clarity of Purpose,
Mission, Vision, and Values had anything other than a positive impact
on a company's long-term performance, as the directional context for effective
strategy has been established.
future note will complete the analysis of the Organizational Context Pyramid,
probing deeper into Strategy and the rapid alignment cycles that must
exist between Strategy and action.
Collins, Jim. "Built to Flip." Fast Company Magazine, Issue 32,
1999, Pg. 131.
Albrecht, Karl. The Northbound Train, New York: AMACOM, 1994, Pg.
 Imparato, Nicholas and Harari, Oren, Jumping the Curve, San
Francisco: Jossey-Bass Inc., 1994, Pg. 205.
"SONY: About Sony: History." About Sony. Sony Corporation, 4 April
 Steiner, George A., Strategic Planning, New York: Free Press,
1979, Pg. 156.  "Meaning of Value." www.Infoplease.com. 7 April 2000.
 Ulrich, Dave, Zenger, Jack and Smallwood, Norm. Results-Based Leadership,
Boston: Harvard Business School Press, 1999, Pg. 47.
Hamel, Gary and Prahalad, C.K., Strategic Intent, Harvard Business
Review, May-June 1989, Pg. 70.