vision and mission-lecture 1(latest)
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mission and visionTRANSCRIPT
STRATEGIC MANAGEMENT – MBA, GSB-UKM
Prof. Datuk Dr. John Antony XavierFEB 2014
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Student-based Learning
I see and I forget, I hear and I remember, I do and I understand
Confucius
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Learning Outcomes Understanding of the role of strategic
management in organisational performance Become a strategic planner who is able to
draft a strategic plan
Economic Clients/Social CustomersPolitical Competitive/Technological Collaborative forces
Resources Present strategyCapabilities PerformanceTechnology Top Management
AssessOrganization’sCurrent and FutureSituation
Develop Vision & Mission
Set Objective
Craft Strategies
Implement Strategies
Evaluate Performance
REVISE AND CHANGE AS NEEDED
REVISE AND CHANGE AS NEEDED
EXTERNAL ENVIRONMENT
INTERNAL ENVIRONMENT
PROCESS OF STRATEGIC PLANNING : THE BIG PICTURE
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STRATEGIC ANALYSIS
STRATEGIC CHOICE
The external environment
Strategic Direction
Internal Environment
STRATEGIC IMPLEMENTATION
Generation of options
Selection of strategy
Evaluation of options
People and systems
Organization structure
Resource planning
A SUMMARY MODEL OF THE ELEMENTS OF STRATEGIC MANAGEMENT
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Why do Co.’s require strategic plans? Rapid and discontinous changes in the
enviroment Increased competition across nations, cities,
regions, organisations Environmental changes are radical not
incremental Role of government is changing Citizens and societies are becoming smarter Key events in one country influence many others Increasingly urban population. By 2020 about 60% of
society will be urban Globalisation – national boundaries – less meaningful Importance of knowledge, skills and education
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Why do organisations need strategic plans?
Increasing stakeholder demands Resource constraints Complexity in organisations
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These forces have required organisations to: Think strategically
◦ Have a vision and mission for the organisation Develop effective strategies to deal with
them ◦ Formulate strategies
Properly implement the strategies◦ Implement strategies
Periodically evaluate outcomes and take action◦ Evaluation and control
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These forces have required organisations to: Think strategically
◦ Have a vision and mission for the organisation Develop effective strategies to deal with
them ◦ Formulate strategies
Properly implement the strategies◦ Implement strategies
Periodically evaluate outcomes and take action◦ Evaluation and control
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VISION, MISSION, OBJECTIVES AND
STRATEGYProf. Datuk Dr. John Antony Xavier
UKM-GSBFEB 2014
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Yang
Yin
Core Ideology (mission)• Core Values• Core Purpose
Envisioned Future (Vision)• 10 to 30 year BHAG (Big, Hairy, Audacious, Goal)• Vivid description
Articulating a Strategic Direction/Envisaged Future
UKM-GSB
BHAG – Envisaged Future
1 Mission/ Core ideology – Purpose
2 Values3
FUTURE
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VISSION AND MISSION
Prof. Datuk Dr. John Xavier
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A description of what the organisation is capable of becoming or would like to become in 10-30 years – What do we want to become?
Paradox – One hand: concrete (visible, vivid, real); On the other – future (dreams, hopes, aspirations
Martin Luther King – ‘I have a dream’ – not a business plan!
BHAG (BEE Hag)– quantitative or qualitative True BHAG
◦ clear, highly focused, compelling ◦ acts as a catalyst for and energises team spirit ◦ has a clear finish line◦ People get it rightaway (Kennedy – man in moon)
Vision – Envisioned Future
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Setting BHAG far into the future requires thinking beyond current capabilities and enviroment
BHAG◦ is visionary and not strategic or tactical ◦ is a creative process
BHAG – Not a sure bet – only 50-70% chance of success – but the Co. must believe that it can reach it
BHAG – requires extraordinary effort and a little luck
Vision
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Vivid – translate words into pictures (man on moon, computers in every home, proton in every household; Ford – build a car so low in price no man making a good salary will be unable to own one)
Vivid – passion, emotion and conviction
I think there is a world market for may be five computers
Thomas Watson, Chairman, IBM 1943
Vision
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Ask “We are sitting here in 20 years; what would we love to see? What should the Co. look like? What should it feel to employees? What should it have achieved?
If someone is writing a article in a major magazine in 20 years what will they say of the Co.?
Does the vision get our juices flowing? Do we find it stimulating? Does it spur forward momentum?
Does it get people going?
Vision – How to set it?
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Requires unreasonable confidence and commitment
Remember! BHAG is not a goal! GE – Become #1 or #2 in every market Honda (1970s) – Yamaha wo tsubusu! Nike (1960s) – Crush Adidas Stanford University (1940s)– Become the
Harvard of the West Visionary company – 1% inspiration, 99%
alignment
Vision – How to set it?
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MAYBANK : To be a regional financial services leader
L’OREAL: The right to be beautiful day after day
STARBUCKS: To be one of the most respected brands in the world
NESTLE: To be the recognised leader in nutrition, health and wellness
Apple: To make a contribution to the world by making tools for the mind that advance mankind
Vision
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DIGIOur vision is to be a company that is always “Changing the Game”. We do this by constantly pushing the boundaries, defining new standards and ensuring continuous improvements in all parts of the business
Vision
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concise, clear, future orientation, stable, abstract, desirable, simple, understandable, challenging, easy to communicate (11-22 words) and remember
Vision must be:
Vision without action is merely a dream. Action without vision
merely passes the time. Vision with action can change the
worldJoel Barker – Futurist, Author, Lecturer
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Study by Business Week firms that develop a mission statement have 30% higher return than those without
Peter Drucker: “That business purpose and business mission are so rarely given adequate thought that it is perhaps the most single cause of business frustration and failure.”
MISSION
What is our business?◦ Define the basic reason of existence
An essential building block of the strategic
management process◦ A business is not defined by its name, statutes or
article of incorporation
◦ Only a clear definition of the mission and purpose help the organization to achieve clear and realistic business objectives (Drucker, 1973)
CONCEPT OF MISSION STATEMENT
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Reason for being Idealistic motivations for doing the Co.’s work –clear
focus that directs people’s attention and energies to live out the purpose and provide them a sense of self-worth
Helps in making strategic resource allocation decisions to realise their customer value proposition
Captures the soul of the organisation Purpose – should last for at least 100 years (vs specific
goals – objectives - and strategies) Can achieve objectives and strategies but you cannot
fulfill mission – a guiding star Mission does not change – it inspires change
Core Purpose - Mission
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3M: To solve unsolved problems innovatively Hewlett Packard: To make technical contributions to
the advancement and welfare of the community McKinsey&Co.: To help leading corporations and
governments be more successful Nike: To experience the emotion of competition,
winning and crushing competitors Disney: To make people happy Starbucks: To establish Starbucks as a premier
purveyor of the finest coffee in the world while maintaining our uncompromising principles as we grow (Old) New – To inspire and nurture the human spirit – one person, one cup, and neighbourhood at a time
Core purpose is a company’s reason for being
CONCEPT OF MISSION STATEMENT
Purpose
• To satisfy shareholders and stakeholders
Strategy
• A definition of what business we are in?
• Position strategy
• Strategic competitive advantage
Behaviour
• The behavioral standards required to convert purpose and strategy into action
Value
• The beliefs and moral principles of the organization, culture & philosophy
The 4 elements must reinforce each other
Source: The Ashridge Model, Campbell and Yeung (1991)
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Core ideology – guidance and inspiration; glue
Values – guiding principles and tenets Mission – Why we exist – core purpose –fixed;
only strategies and practices change◦ Yin – does not change – complements the Yang◦ Yang – the envisioned future – changes
It is more important to know who you are (core ideology) then where you are going (vision) because vision changes as the environment changes
Core Ideology – mission & values
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The 5 Whys Random Corporate Serial Killer game Ask the Mars Group:
◦ Mars Group (6 -7) Gut-level understanding of organisation Highest level of credibility with peers Highest level of competence
◦ If tomorrow they can retire as multi-millionaires would they still work for the organisation?
Ask stakeholders and clients Check the founding legislation
How to discover mission?
Concern for survival, growth and profitabilityIs the Co. committed to growth and financial soundness?
TechnologyIs the Co. technologically current?
MarketsWhere does the Co. compete?
Products/ ServicesWhat are the Co.’s major products / services?
CustomerWho are the Co.’s customers?
Components of a Mission Statement
Components of a Mission Statement
Concern for employeesAre the employees considered a valuable asset?
Concern for public imageIs the Co. responsive to social, community and environmental concerns?
Self- conceptWhat is the Co.’s distinctive competence or major competitive advantage
PhilosophyWhat are the Co.’s basic beliefs, values, aspirations, and ethical priorities?
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At L’ORÉAL, we believe that everyone aspires to beauty. Our mission is to help men and women around the world realise that aspiration, and express their individual personalities to the full. This is what gives meaning and value to our business, and to the working lives of our employees. We are proud of our work
Mission statement of L’OREAL
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Timeless guiding principles; intrinsic value – require no external justification – almost religious tenet – hold on to it even if it is a competitive disadvantage◦ E.g. Disney – imagination; wholesomeness◦ Norstrom – service to the customer; ◦ HP – respect for the individual◦ F&N – integrity, professionalism, customer
centricity and passion for business
Core Values
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◦ E.g. Disney – imagination; wholesomeness; no cynicism Disney has evolved from making short animated films, to feature length films, to theme parks, to cruises, but their mission of providing happiness to young and old, and not succumbing to cynicism remains strong.
Discover your core values and purpose beyond simply making money
◦ Starbucks: great work environment by treating each other with respect and dignity; embrace diversity as an essential component of the way we do business; apply the highest standards of excellence to purchasing, roasting and fresh
delivery of our coffee; customer satisfaction all the time; contribute positively to our communities and our environment; recognise profitability is essential to our future success
Core values – 3 - 5
Core Values
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Be honest as to what values are truly central
Values must stand the test of time Who should identify core values?
◦ Mars Group (6 -7) Gut-level understanding of organisation Highest level of credibility with peers Highest level of competence
How to identify core values?
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◦ What core values do you personally bring to work◦ What will you tell your children are the values at
the workplace and those they should hold when they grow up
◦ If you woke up tomorrow a multi-millionaire and can retire what values will you continue to hold
◦ Will these values be valid a 100 years◦ If you start a co. what values would you build into
it
How to identify core values?
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Norstrom -Service to the customer above all else-Hard work and individual productivity-Never being satisfied-Excellence in reputation
Sony -Elevation of Japanese culture and national status-Being a pioneer – not following others, doing the impossible-Encouraging individual ability and creativity
Walt Disney-No cynicism-Nurturing and promulgating wholesome American values-Creativity, dreams and imagination-Fanatical attention to consistency and detail-Preservation and control of the Disney magic
Core Values are a Co’s. Essential Tenets
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Public Bank – To be ranked among the top 100 banks of the world
Guiness Anchor Bhd – GAB is an icon business. Respected the world over for delivering exceptional growth in people, brand and performance
PETRONAS – To be a leading oil and gas multinational company of choice
What do you think of the following visions? Can you propose a better alternative?
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We did not find an explicit and formal statement of purpose in all of our visionary companies
Collins and Porras (1997)
Reality
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Organisational culture is typically missing from the standard mission statement which is why the statement alone is ineffectual. The ultimate value of the vision as a management tool is undermined if the vision is nothing more than a statement of purpose and a strategy for getting there. Purpose and strategy do not have the power to enhance performance unless they can be converted into action, policy and job-related behavioural guidelines
Lipton, 1996
Mission statement alone is ineffectual!
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Incomplete mission statement is better than no mission
More important is the process of developing a mission
Genuine mission statement is a product of both deep understanding of the organisational and environmental reality and deep insight
Authentic vs Fabricated
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Mission UKM is the National university that safeguards the sovereignty of the Malay language while globalizing knowledge in the context of local culture. The Vision UKM is committed to be a leading university that pioneers innovation in the construction of knowledge to achieve the aspiration of producing a society imbued with dynamic, learned and civic leadership.
Mission and vision of UKM
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Maybank’s mission is to humanise financial service across Asia by: Providing the people with convenient access
to financing Having fair terms and pricing Advising customers based on their needs Being at the heart of the community
Mission of Maybank
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Hai-0We are committed to promoting healthcare
culture and improving human’s well-beingDigiWe deliver ‘Internet for All’ as part of our
commitment to building a connected Malaysia – enabling access to mobile internet services and applications by offering customers the right combination of devices and value pricing, as well as the best usage experience
Mission
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Why
HowWhat
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Start with Why, How and then What?
People don’t buy what you do. They buy why you do it, and what you do serves as the proof of what you believeSimon Sinek
Sinek’s Golden Circle Model
Outside-in Model –
Conventiaonl Model
Inside-out Model – Starts
with ‘Why’
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Google – Let’s organise the world’s information
Mozila – Let’s kill Microsoft AirAsia – Everyone can fly Walmart – Everyday low prices Wikipedia – Let’s all contribute knowledge
and create a true repository of global information
Amazon.com – We seek to offer Earth’s Biggest Selection and to be Earth’s Most Customer-Centric company
Start with Why? It gives you direction
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Apple started as a computer co. Its Why gave it a sense of direction; wanted to make a dent on the universe
When Apple came up with its Mac, IBM was spending 100 times more in R&D. But it was ‘why’ that made the day
Everything we do we do differently. Made it to challenge the status quo
Martin Luther King – ‘I have a dream’ – not a business plan!
Start with the Why?
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MAYBANKTo be a regional financial services leader Hai-OWe aim to become the premier healthcare
company in Malaysia and thereby bringing the greatest value and pride to our customers, business partners, employees and shareholders
Visions- Alternatives?
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Public BankTo sustain the position of being the most efficient, profitable
and respected premier financial institution in Malaysia GAB
1. We have a passion for winning 2. We value and respect each other3. We show integrity in all that we do4. We provide enjoyment
PETRONAS ◦ We are a business entity◦ Petroleum is our core business◦ Our primary responsibility is to develop and add value to this
national resource◦ Our objective is to contribute to the well-being of the people and
the nation
What do you think of the following missions? Can you propose a better alternative?
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"Vision without action is a daydream. Action without vision is a nightmare.” __Japanese proverb
If your future looks bright, make sure your team knows about it.
Tell the story of how you achieved all this, thank the people who helped you get there!
“Well, I don’t know what will happen now.
We’ve got some difficult days ahead.
But it doesn’t matter with me now.
Because I’ve been to the mountaintop…
Like anybody, I would like to live a long
life. Longevity has its place. But I’m not
concerned about that now. I just want to
do God’s will. And He’s allowed me to go
up to the mountain. And I’ve looked over.
And I’ve seen the promised land. I may
not get there with you. But I want you to
know tonight, that we, as a people, will
get to the promised land.”
___Martin Luther
King Jr.
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“My Personal Mission And Vision”To laugh often and much;To win the respect of intelligent peopleAnd the affection of children, To leave the world a better place than what I've found,
To know even one life has breathed easierBecause I have lived,
This is to have succeeded
_Ralph Waldo Emerson
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What must we do to achieve our vision and be true to our mission?
What specifically must we achieve: performance goals: ouputs, impact and benefit for clients and organisation
What objectives can formulate based on our strategic issues
Objectives
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Begin with the word “to” followed by an action verb
State a single key outcome Be S.M.A.R.T State ‘what’ and ‘when’ but not ‘why’ and
‘how’ Be simple and understandable It is something that everyone can agree to
How to Draft Objectives
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What is Strategy?
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Sun Tzu’ strategies 2000 years ago1. When the enemy advances, we retreat!2. When the enemy halts, we harass!3. When the enemy seeks to avoid battle, we
attack!4. When the enemy retreats, we pursue!
What is Strategy?
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Means to achieve ends (outcomes) Build on strengths; take advantage of
opportunities Guide how to handle threats and minimise
weaknesses Strategies can be both intended and
emergent Strategies can be proactive or reactive
Strategy
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SUITABILITY:◦ Does it exploit organisational strengths and
opportunities?◦ Does it overcome weaknesses and threats?◦ Does it match objectives and values?
FEASIBILITY:◦ Can the strategy be funded?◦ Can the organisation perform to the required level?
ADEQUACY AND ACCEPTABILITY:◦ Is it the best of all the alternatives?◦ Will the strategy achieve the objectives?◦ Will the strategy be acceptable to all stakeholders?
Evaluating and Selecting Strategies
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Action plans provide concrete information regarding: What is to be done When it is to be done Who is responsible How specific outcomes are to be measured What resources are needed What assumptions are made in planning the
actions
Action Planning to Achieve Outcomes
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KRA
Outcome
Strategy:
Strategic Initiatives
(programmes and activities)
Unit/ Person responsible
Time-line KPI + Targets
Action Plan