STRATEGIC MANAGEMENT-MMH 4TH.

SEMESTER/C9T/UNIT-I

Nature and importance of Business policy and Strategy: Introduction to the Strategic
management process and related concepts; Characteristics of Corporate, Business and
Functional Level Strategic management Decisions. Company’s Vision and Mission:
Need for a mission Statement, criteria for evaluating a mission statement- Goal,
Process and Input formulation of the mission Statement- Drucker’s Performance
Area, Bennis’ Core Problem; formulation of Mission Statement.

Definition of Strategy :

The concept of strategy is an ancient one and originated in the study of success in war. The
word ‘Strategy’ owes its origin to theGreek terms ‘Stratos’(army) and ‘agein’(to lead). The
Strategos in Athens was an elected General, a post created when Athenswas at war with
Persia in 506 B.C. Actually, the term ‘Strategy; was first used in Military organisations. In
the perspective of business, the term, strategy is used to mean a Long-term plan chalked out
by the organisation to face a competitive situation successfully.

In its simplest conception strategy is regarded as a unifying idea which links purposeand
action. In thewords of Alfred Chandler, the first modern business strategy theorist, strategy
in thearea of business is defined as ‘the determination of the basic, long-term goals
andobjectives of an enterprise, and the adoption of courses of action and the allocationof
resources necessary for those goals’ Although still tentativeand preliminary as a definition,
it is possible to advance a little further and say thatstrategy is ‘a coordinated series of actions
which involve the deployment of resourcesto which one has access for the achievement of
a given purpose.’
Strategy therefore combines the articulation of human goals and the organisationof human
activity to achieve those goals. The setting of goals involves the identificationof
opportunity. Strategy is a process of translating perceived opportunity intosuccessful
outcomes, by means of purposive action sustained over a significantperiod of time. At a
minimum there must be a clear intent translatable into specific
objectives and some defined and effective means of achieving these objectives bydeliberate
action involving the use of resources to which one has access (Figure 1.1).Strategy may or
may not reflect a fully self-conscious, deliberative and systematicapproach to the setting of
objectives and their achievement which then requiredetailed planning. It may be an implicit
or unconscious activity.
What is strategy?
The four main elements of strategy
The strategic management process is made up of four elements: situation analysis, strategy
formulation, strategy implementation, and strategy evaluation. These elements are steps that
are performed, in order, when developing a new strategic management plan. Existing
businesses that have already developed a strategic management plan will revisit these steps
as the need arises, in order to make necessary changes and improvements.

Situation Analysis

Situation analysis is the first step in the strategic management process. The situation analysis
provides the information necessary to create a company mission statement. Situation
analysis involves "scanning and evaluating the organizational context, the external
environment, and the organizational environment" (Coulter, 2005, p. 6). This analysis can
be performed using several techniques. Observation and communication are two very
effective methods.

To begin this process, organizations should observe the internal company environment. This
includes employee interaction with other employees, employee interaction with
management, manager interaction with other managers, and management interaction with
shareholders. In addition, discussions, interviews, and surveys can be used to analyze the
internal environment.

Organizations also need to analyze the external environment. This would include customers,
suppliers, creditors, and competitors. Several questions can be asked which may help
analyze the external environment. What is the relationship between the company and its
customers? What is the relationship between the company and its suppliers? Does the
company have a good rapport with its creditors? Is the company actively trying to increase
the value of the business for its shareholders? Who is the competition? What advantages do
competitors have over the company?

Strategy Formulation

Strategy formulation involves designing and developing the company strategies.

Determining company strengths aids in the formulation of strategies. Strategy formulation
is generally broken down into three organizational levels: operational, competitive, and
corporate.

Operational strategies are short-term and are associated with the various operational
departments of the company, such as human resources, finance, marketing, and production
(Coulter, 2005, p. 7). These strategies are department specific. For example, human resource
strategies would be concerned with the act of hiring and training employees with the goal
of increasing human capital.

Competitive strategies are those associated with methods of competing in a certain business
or industry. Knowledge of competitors is required in order to formulate a competitive
strategy. The company must learn who its competitors are and how they operate, as well as
identify the strengths and weaknesses of the competition. With this information, the
company can develop a strategy to gain a competitive advantage over these competitors.
Corporate strategies are long-term and are associated with "deciding the optimal mix of
businesses and the overall direction of the organization" (Coulter, 2005, p. 216). Operating
as a sole business or operating as a business with several divisions are both part of the
corporate strategy.

Strategy Implementation

Strategy implementation involves putting the strategy into practice. This includes
developing steps, methods, and procedures to execute the strategy. It also includes
determining which strategies should be implemented first. The strategies should be
prioritized based on the seriousness of underlying issues. The company should first focus
on the worst problems, then move onto the other problems once those have been addressed.

"The approaches to implementing the various strategies should be considered as the

strategies are formulated" (Coulter, 2005, p. 8). The company should consider how the
strategies will be put into effect at the same time that they are being created. For example,
while developing the human resources strategy involving employee training, things that
must be considered include how the training will be delivered, when the training will take
place, and how the cost of training will be covered.

Strategy Evaluation

Strategy evaluation involves "examining how the strategy has been implemented as well as
the outcomes of the strategy" (Coulter, 2005, p. 8). This includes determining whether
deadlines have been met, whether the implementation steps and processes are working
correctly, and whether the expected results have been achieved. If it is determined that
deadlines are not being met, processes are not working, or results are not in line with the
actual goal, then the strategy can and should be modified or reformulated.

Both management and employees are involved in strategy evaluation, because each is able
to view the implemented strategy from different perspectives. An employee may recognize
a problem in a specific implementation step that management would not be able to identify.

The strategy evaluation should include challenging metrics and timetables that are
achievable. If it is impossible to achieve the metrics and timetables, then the expectations
are unrealistic and the strategy is certain to fail.

Conclusion

The strategic management process is a continuous process. "As performance results or

outcomes are realized - at any level of the organization - organizational members assess the
implications and adjust the strategies as needed" (Coulter, 2005, p. 9). In addition, as the
company grows and changes, so will the various strategies. Existing strategies will change
and new strategies will be developed. This is all part of the continuous process of improving
the business in an effort to succeed and reach company goals.

The strategy is a game plan, chosen to achieve the organisational objectives, gain customer’s
trust, attain competitive advantage and to acquire a market position. It is a combination of
well-thought intent and actions which lead to the organisation towards its desired position
or destination. It is a unified and integrated plan made to achieve the basic objectives of the
enterprise like:

• Effectiveness
• Handling events and problems
• Taking advantage of opportunities
• Full resource utilisation
• Coping with threats

The strategy is a combination of flexibly designed corporate moves, through which an

organisation can compete with its rivals successfully. The following are the features of the
Strategy:

• It should be formulated from top-level management. However, sub-strategies can be

made by middle-level management.
• It should have a long-range perspective.
• It should be dynamic in nature.
• The main purpose is to overcome from uncertain situations.
• It should be made in such a way, to make the best possible use of scarce resources.

Definition of Policy

The policy is also regarded as a mini-mission statement, is a set of principles and rules
which direct the decisions of the organisation. Policies are framed by the top-level
management of the organisation to serve as a guideline for operational decision making. It
is helpful in highlighting the rules, value and beliefs of the organisation. In addition to this,
it acts as a basis for guiding the actions.

Policies are designed, by taking the opinion and general view of a number of people in the
organisation regarding any situation. They are made from experience and basic
understanding. In this way, the people who come under the range of such policy will
completely agree upon its implementation.

Policies help the management of an organisation to determine what is to be done in a

particular situation and the same has to be applied consistently over a period of time for
achieving the organisational objectives.

The Three Levels of Strategy

Strategy is at the heart of business. All businesses have competition, and it is strategy that
allows one business to rise above the others to become successful. Even if an
organisationhaving a great idea for a business, and a great product, cannot go anywhere
without strategy. Not only that, Strategies are to be made at different levels viz. Corporate
strategy, Business Strategy and Functional Strategy that are typically used by organisations.
Only when all three of these levels are carefully considered,the organisation will be able to
get on the right path toward a prosperous future.

To help you understand strategy in business, let us look at the three levels of strategy,

Corporate Strategy

The first level of strategy in the business world is corporate strategy, which sits at the ‘top
of the heap’. Before we dive into deeper, more specific strategy, we need to outline a general
strategy that is going to oversee everything else that you do. At a most basic level, corporate
strategy will outline exactly what businesses we are going to engage in, and how you plan
to enter and win in those markets.

CORPORATE LEVEL STRATEGY

• Outlines the general overall strategy

• Defines the markets in which the business will operate
• Plans how these markets will be entered

It is easy to overlook this planning stage when getting started with a new business, but we
have to pay the price in the long run for skipping this step. It is crucially important that we
have an overall corporate strategy in place, as that strategy is going to direct all of the
smaller decisions we make.

For some companies, outlining a corporate strategy will be a quick and easy process. For
example, smaller businesses who are only going to enter one or two specific markets with
their products or services are going to have an easy time identifying what it is that makes
up the overall corporate strategy. If you are running an organisation that bakes and sells
cookies, for instance, you already know exactly what the corporate strategy is going to look
like – you are going to sell as many cookies as possible.

However, for a larger business, things quickly become more complicated. Carrying that
example forward to a larger company, imagine you run an organisation that is going to sell
cookies but is also going to sell equipment that is used while making cookies. Entering into
the kitchen equipment market is a completely different challenge from selling the cookies
themselves, so the complexity of your corporate strategy will need to rapidly increase.
Before you get any farther into the strategic planning of your business, be sure you have
your corporate strategy clearly defined.

Business Strategy
It is best to think of this level of strategy as a ‘step down’ from the corporate strategy level.
In other words, the strategies that we outline at this level are slightly more specific and they
usually relate to the smaller businesses within the larger organisation.

Carrying over our previous example, the business would be outlining separate strategies for
selling cookies and selling cookie-making equipment at this level. We may be going after
convenience stores and grocery stores to sell our cookies, while we may be looking at
department stores and the internet to sell our equipment. Those are dramatically different
strategies, so they will be broken out at this level.

BUSINESS LEVEL STRATEGY

Uses Corporate strategy to

• Define specific tactics for each market.
• Relates how each business unit will deliver these planned tactics

Even in smaller businesses, it is a good idea to pay attention to the business strategy level
so we can decide on how we are going to handle each various part of your operation. The
strategy that you highlighted at the corporate level should be broad in scope, so now is the
time to boil it down into smaller part.

Functional Strategy

This is the day-to-day strategy that is going to keep the organisation moving in the right
direction. Just as some businesses fail to plan from a top-level perspective, other businesses
fail to plan at this bottom-level. This level of strategy is perhaps the most important of all,
as without a daily plan we are going to be stuck in neutral while our competition continues
to drive forward. As we work on putting together our functional strategies, we have to keep
in mind our higher level goals so that everything is coordinated and working toward the
same end.

FUNCTIONAL LEVEL STRATEGY

• Defines day –to-day actions need to deliver corporate & business strategies.
• Defines the relationships needed between business units, departments & teams
• Defines how functional goals will be met & monitored.

It is at this bottom-level of strategy where we should start to think about the various
departments within our business and how they will work together to reach goals. Our
marketing, finance, operations, IT and other departments will all have responsibilities to
handle, and it is our job as an owner or manager to oversee them all to ensure satisfactory
results in the end. Again, the success or failure of the entire organisation will likely rest on
the ability of the business to hit on its functional strategy goals regularly. As the saying
goes, a journey of a million miles starts with a single step – take small steps in strategy on
a daily basis and the overall corporate strategy will quickly become successful.

Good strategy alone isn’t going to automatically lead you to success in business, but it
certainly is a good place to start. Once we have sound strategies in place, the focus of the
organisation will shift toward executing those strategies properly day after day. Of course,
the strategies will need to be continually monitored and adjusted as we move forward to
ensure that the business is staying on a path that is consistent with the goals of the business.
This is why, it is required to always keep the three levels of strategy near the front of our
mind as our guide for the company.

Difference Between Strategy and Policy

In the perspective of business parlance, the terms strategy refers to is a unique plan designed
with the aim of achieving a competitive position in the market and also to reach the
organisational goals and objectives. In short, it is an interpretative plan that guides the
enterprise in realizing its goal. On the other hand, policy refers to a set of rules made by the
organisation for rational decision making.

Policy lays down the course of action, which is opted to guide the organisation’s current
and future decisions. Though we are often confused with these two terms- policies and
strategies, these two terms are not alike. Basically, policies are subordinate to strategies, i.e
policies are chalked out on the basis of strategies adopted by a firm. From the following
comparison chart we may understand the difference between the two.

Comparison Chart
Basis for
Strategy Policy
Comparison

Policy is the guiding principle that

Strategy is a comprehensive plan, made
Meaning helps the organisation to take
to accomplish the organisational goals.
logical decisions.

What is it? Action plan Action principle

Fixed, but they allow exceptional

Nature Flexible
situations

Organisational moves and decisions for Organisational rules for the

Related to the situations which have not been activities which are repetitive in
encountered previously. nature.

Orientation Action Thought and Decision

Basis for
Strategy Policy
Comparison

Top Level Management and Middle

Formulation Top Level Management
Level Management

Approach Extroverted Introverted

Methodology used to achieve the What should be done and what

Describes
target. should not be done.

Key Differences between Strategy and Policy

The following are the major differences between strategy and policy

1. The strategy is the best plan opted from a number of plans, in order to achieve the
organisational goals and objectives. The policy is a set of common rules and
regulations, which forms as a base to take the day to day decisions.
2. The strategy is a plan of action while the policy is a principle of action.
3. Strategies can be modified as per the situation, so they are dynamic in nature.
Conversely, Policies are uniform in nature. However, relaxations can be made for
unexpected situations.
4. Strategies are associated with the organisational moves and decisions for the
situations and conditions which are not encountered or experienced earlier. On the
contrary. Policies define the rules for routine activities, which are repetitive in nature.
5. Strategies are concentrated toward actions, whereas Policies are decision-oriented.
6. The top management always frames strategies, but sub-strategies are formulated at
the middle level. In contrast to Policy, they are, in general, made by the top
management.
7. Strategies deal with external environmental factors. On the other hand, Policies are
made for the internal environment of business.
8. Strategies often contain methodologies used to achieve the set target. In contrast,
Policies determine what is to be done and what should not be done in specific
circumstances.

Conclusion

The difference between Strategy and Policy is, a little complicated because Policies come
under the Strategies. Apart from that, the policies are made to support strategies in several
ways like accomplishing organisational goals and securing an advantageous position in the
market. Both of them are made by the top management as well as made after a deep analysis.

VISION AND MISSION OF A COMPANY

What is a company’s mission?
A company’s mission, states the purpose, answers the question of why does the company
exist? it usually includes a general description of the organization, its function, and
objectives.
The mission, in the business field, refers to the objectives of a company, its activities and
the way in which it operates. In business missions they are established:
Scheduling
Functions
Media
Purposes pursued.
Examples of Company Missions
Google
Mission: To organize the information of the world and make it universally accessible and
useful.
DISNEY
Mission: To create happiness by providing the best entertainment for people of all ages and
in all parts of the world.
What is a company’s vision?
A company’s vision describes where the company is headed, answer the question of what
will become of the company in the future.
A company’s vision, on the other hand, refers to an image that the organization has of how
it expects its future to be in the long term, an ideal expectation of what it expects to happen.
The vision must be realistic, but it can be ambitious; its function is to guide and motivate
the group to continue the work.
The vision depends on the present situation, on the present and future material possibilities
as perceived by the organization, on the unexpected events that may occur and on the
mission itself that has already been silvered.
Similarly, the Vision of a company could be called the DREAM, is a statement of the
company’s aspirations in the medium or long term, is the image of the future as we want
the company to be later. Its purpose is to be the engine and guide of the organization in
order to achieve the desired state.
In short, the vision is a clear statement that indicates where the company is heading in the
long term and what it should become, taking into account the impact of new technologies,
changing customer needs, and expectations, the emergence of new market conditions, etc.
Examples of company vision
Example: Apple’s corporate mission and vision
Apple’s Mission: To help improve the lives of our customers by changing the way they
work, learn, and communicate, through personal computing products and innovative
services.
Apple’s Vision: To improve the quality of life of our customers through three pillars:
professionalism, technology and track record, to be recognized as the leading company in
information technology, communication and entertainment.
Coca Cola’s mission, vision and values
Mission Statement
It lies in the long-term objective of the Coca-Cola company, and it is also a key criterion
when making important decisions and actions for the brand to achieve 3 fundamental
goals:
Refresh the world.
Inspire moments of optimism and happiness.
Create value and make a difference.
Vision
It is the framework of the work plan and describes what needs to be achieved to achieve
maximum sustainability, quality, and growth. The aim is to achieve objectives adapted to
different areas:
People: To be a good place to work, so that people feel inspired to give their best every day.
Beverages: To offer a varied portfolio of quality products that anticipate and satisfy the
desires and needs of consumers.
Partners: Develop a network to create common and lasting value.
Planet: To be a responsible citizen who makes a difference in helping to build and support
sustainable communities.
Benefit: Maximize shareholder returns while keeping in mind the Company’s overall
responsibilities.
Productivity: To be an efficient and dynamic organization.
Values
It guides the actions and behavior of the Coca-Cola company in the world, and is:
Leadership: striving to shape a better future.
Collaboration: enhancing collective talent.
Integrity: to be transparent.
Accountability: to be responsible.
Passion: to be committed to the heart and mind.
Diversity: have a wide range of brands and be as inclusive as they are.
Quality: pursuit of excellence.
Nike Mission, Vision, and Values
Vision. “Bring inspiration and innovation to every athlete on the planet.”
Mission. “To be the world’s largest seller of athletic shoes and clothing.
The representation and reliability of shoes, clothing, and equipment, the development of
new products, price, product identity across the market and promotion as well as customer
service and support are important competitive aspects in the tennis, apparel and sports
equipment industry… we believe we are competitive in all these areas.
The purpose of the company is to“empower the corporate employee through proactive
programs that reflect the care of Nike’s global family, our teammates, our customers and
those who provide services to Nike.
Defining a company’s values
Values are ethical principles on which the culture of our company is based, and they allow
us to create our behaviour guidelines.
It consists of establishing the priorities, principles, limits and ethical and moral criteria that
will govern the day-to-day running of your work.
They are a set of principles that regulate your company’s code of conduct.
Your company’s values determine what you are willing to do and what you are not willing
to do to achieve your goals.
how to define your company’s values and examples
How you define your company’s values
These are the principles on which the culture of your company is based, setting your
behavior guidelines. Therefore, you must answer:
What are you like and what do you believe in?
How do you deal with a crisis or a problem?
How would you like to be described by your customers, your suppliers, your employees,
your collaborators,…?
In short, it is the personality of your company, so they must be faithful to reality, not a
wish list.
It is not advisable to formulate more than 6-7 values, otherwise we will lose credibility.
Examples of a company’s values
IKEA
Values: Humility and willingness, leading by example, daring to be different, unity and
enthusiasm, awareness of costs, constant desire for renewal and accepting and delegating
responsibilities.
INDITEX
Values: Result orientation, involvement, improvement, honesty and teamwork.
COCA TAIL
Values: Leadership, collaboration, integrity, accountability, passion, diversity and quality.
Purpose
The purpose of a company is its permanent reason for existence. That’s why you do things.
The backbone on which we depend on to make decisions, whether in everyday life or when
the subject is crucial. For one purpose, we can discern between decisions that are right and
generate real value and those that are simply easy or even technically eligible.
Examples of a Company’s Purpose:
– Kellogg’s:“Nurture families so they can flourish and thrive.
– IAG:”Helping people manage risk and recover from unexpected losses.
– Google:“Organize the world’s information and make it accessible to everyone”.

Each and every organisation is established and runs for some specific purposes which are
called the strategic intents of the organisation. These strategic intents may be expressed in
terms of a hierarchy. Broadly stated, these could be in the form of Mission and Vision
statements for the organisation as a corporate whole. Hamel and Prahlad coined the
term’StrategicIntent’which they believe is an obsession with organisation- an obsession by
having ambitions that may even be out of proportion to their resources and capabilities. This
obsession is to win at all the levels of the organisation, while sustain that obsession in the
quest for global leadership. The concept also encompasses an active management process
that includes: focusing the organisation’s attention on the essence of wining, motivating
people by communicating the value of the target, leaving room for individual and team
contributions, sustaining enthusiasm by providing new operational definitions as
circumstances change and using intent consistently to guide resource allocations.

VISION
MISSION
GOALS
OBJECTIVES
PLANS
Hierarchy of Strategic Intent

Subsequent to the idea of Stratrgic intent, Hamel and Prahlad added the dual concepts of
‘Stretch’ and ‘Leverage’. Stretch is a misfit between resources and aspiration and Leverage
refers to concentrating , accumulating, complementing, conserving, and recovering
resources in such a manner that the meager resource base is stretched to meet the aspirations
that an organisation dares to have.

Aspirations, expressed as strategic intent, should lead to tangible results; otherwise they
would just be castles in the air. Those results are the realization of the vision of an
organisation or an individual.Avision is a vivid mental image of what we want our business
to be at some point in the future, based on our goals and aspirations. ... A vision statement
captures, in writing, the essence of where we want to take our business, and can inspire us
and our staff to reach our goals.

Vision is the starting point of expressing an organisation’s strategic intent. Nations have
vision:organisations have vision and individuals have vision.They have visions either
explicitly or implicitly. In spite of this phenomenon, there is a lack of unanimity about the
exact content of vision. The Dictionary meaning of the word ‘Vision’ is “a mental image of
what the future will or could be like”. Collins and Porras have conceptualized vision as
having two major components: a guiding philosophy and a tangible image. Guiding
philosophy is a system of fundamentalmotivating assumptions, principles, values, nd tenets.
Guiding philosophy stems from the organisation’s core beliefs and values and purpose.

On the basis of the aforesaid discussions, a Vision may be viewed as a set of ideals and
priorities, a picture of the future, a sense of what makes the company special or unique, a
core set of principles that the company stands for, and a broad set of compelling criteria that
will help in achieving organisational success. Actually, a vision may also be considered as
a realistic, credible, and attractive future for the organisation. Thus a vision is found to have
four elements as enumerated below.
 (i) Realistic – A vision must be based on reality to be meaningful for an organisation;
it should not be merely day-dreaming but a dream to be converted into reality.
(ii) Credible – A vision must be believable to be relevant to the members of the
concerned organisation, otherwise it will not serve a useful purpose by motivating
people.
(iii) Attractive – A vision must be attractive so as to inspire and motivate people in the
organisation.
(iv) Future – A vision is not for the present; it is for the future. Simply, a vision is not
where an organisation is now but where it will be in future.

Benefits of having a Vision.

Parikh and Neubauer have pointed out several benefits to an organisation for having a vision
and the same are indicated below.
i) Good visions are inspiring and exhilarating.
ii) Visions represent a discontinuity, a step function, and a jump ahead so that the company
knows what it is to be.
iii) Good visions help in the creation of common identity and a shared sense of purpose.
iv) Good visions are competitive, original and unique. They make sense in the market place
as they are practical.
v) Good visions foster risk taking, and experimentation as well as longterm thinking.
vi) Good visions represent integrity- they are truly genuine and can be used to the benefit
of people.

Mission is the second level of hierarchy of strategic intent and broadly defines why does an
organisation exist. According to the Dictionary meaning, Mission refers to that aspect for
which an individual has been or seems to have been sent into this world. This is also equally
true for an organisation. Peter F.Drucker, several years ago raised important philosophical
questions related to business : What is our business? What it will be? and What it will be?
Though these three questions apparently seem to be very simple, in reality, these are the
most important questions for the organisation to justify its existence and functioning.

Each and every organisation must relate their existence to satisfying a particular need of the
society and they do this in terms of their mission. Most of the operational definitions of
mission put emphasis on this basic theme with addition of some more relevant aspects.
Thompson has defined Mission in the following words.

“Mission is the essential purpose of the organisation, concerning particularly why is it in

existence, the nature of the business(es) it is in, and the customers it seeks to serve and
satisfy”

At present there is not much difference of opinion about the opinion about the definition of
mission. Since mission of an organisatiion implies the image which it seeks to project, very
often, mission sets apart an organisation from others.
The difference between mission and vision

Before going through the discussion of various aspects of mission, it is desirable to

understand the difference between vision and mission for the sake of clarity. However, the
following lines will help us in understanding the difference between Mission and Vision.

1.The essence of vision is a forward looking view of what an organisation is to become in

future(say, Market leader or follower), mission states what the organisation is and why does
it exist.
2.While vision places emphasis on visionary long term concept of the organisation with
very high level of achievement, Mission deals mostly with how the organisation will interact
with various stakeholders, products/services it offers, and the way these are offered.
MISSION STATEMENT
A Mission Statement is a short statement of why does an organisation exist, what its
overall goal is, identifying the goal of its operations: what kind of product or service it
provides, its primary customers or market, and its geographical region of operation. It may
include a short statement of such fundamental matters as the organisation's values or
philosophies, a business's main competitive advantages, or a desired future state—the
"vision".
“A mission statement is a statement of the purpose of an organisation. The mission
statement should guide the actions of the organisation, spell out its overall goal, provide a
path and guide decision-making. It provides the framework or context within which the
company’s strategies are formulated.”

A mission is not simply a description of an organisation by an external party, but an

expression, made by its leaders, of their desires and intent for the organisation. The purpose
of a mission statement is to communicate the organisation's purpose and direction to its
employees, customers, vendors, and other stakeholders. A mission statement also creates a
sense of identity for its employees. Organisations normally do not change their mission
statements over time, since they define their continuous, ongoing purpose and focus.
Features of Mission Statement:
Mission statement is a document that communicates the corporate philosophy, identity and
image to members of the organisation. It helps the society to know what the organisation is.
A Mission Statement must therefore have the following features :

i)The mission should be clear so that it is easily understood.

ii)It specifies the purpose and goals of the organisation.
iii) It should have achievable standards; neither too high nor too low.
iv) It should be precise, neither too narrow to limit organisation’s activities nor too broad
to make it vague.
v) It does not look after interests of the shareholders only, but all its stake holders and
customers, employees, suppliers, distributors, competitors, labour unions, community at
large, Mission of the organisation is achieved by framing goals of the organisation.

Components of Mission Statement

A good Mission Statement should be capable of clearly and explicitly justifying the
existence of the organisation and throw light on all the aspects of the organisational
functioning. Thus, a study reveals the following components of a Mission statement .
1. Customers of the Organisation.
2. Products or services provided by the organisation.
3.Location of the organisation.
4.Technology adopted by the organisation.
5.The organisation’s concern for survival, i.e., commitment to economic objectives.
6.The basic philosophy, beliefs, values and aspirations of the organisation.
7. Self-concept, organisational strengths and competitive advantages.
8.Concern for public image including organisation’s present and prospective
responsibilities towards public.
9. Concern for employees by paying them adequate compensation according to their
abilities, skills and contributions towards the organisational operations.

However, the Mission Statement of an organisation need not necessarily contain all the
components stated above. Depending upon upon the nature and type of the organisation,
some of the above components may not be included in the Mission Statement.
According to Bart, the Commercial Mission Statement of an organisation consists of 3
components :
1.KEY MARKET- Who is your Target Customer.
2. CONTRIBUTION – What product or Service do you provide to the Target customer.
3. DISTINCTION – What makes your product or service unique so that the client will
choose you.

As for example, the Mission Statement of McDonald is , “To provide the fast food customer
food prepared in the same high quality manner world-wide that is tasty, reasonablypriced&
delivered consistently in a low key décor and friendly atmosphere.”
So the three components of the Mission Statement are as following :
Key market –Fast food customers across the world
Contribution – High quality food that is tasty and reasonably priced.
Distinction – Consistent delivery of food in a low décor and friendly atmosphere.

How to Write a Mission Statement?

While a mission statement shouldn’t be written in isolation by one person if the organisation
employs many people, it’s not a job for a committee, either. Leaders often ask a few
employees to write one sentence that summarises what the company does and stands for.
They compare them, looking for similarities, differences, and surprises. They use that input
to craft a statement that is honest and accurate rather than something the company aspires
to achieve. However, a Well-crafted mission statement should have an average length of 15
words and for writing a Mission Statement effectively, the following points are to be
considered.:

▪ Identify the organisation’s target market, audience, or customers.

▪ Say what makes the business unique or provides its competitive
advantage.
▪ Are realistic and reasonable rather than grandiose or lofty.
▪ Are relevant, specific, and believable.
▪ Inspire employees.
▪ Are short and to the point.
Testing the statement with employees before sharing it internally or externally helps
generate useful feedback. Does it ring true? What would they change? Employees are the
most important audience for the mission statement because they will need to “walk the talk,”
so it needs to resonate with them.

Whenever a business starts or refocuses its plans, a mission statement can help guide the
process. A mission statement tells employees, customers and vendors how to achieve the
company's vision. It provides a measuring tool for new ventures and a way to approach day-
to-day business activities. As we develop a mission statement, make it one that will hold up
over time and give just enough information to inspire and direct.

Informative

A mission statement should convey the overall goal of the organisation, giving insight into
the idea that guides each project and decision. It should communicate the essence of what
the organisation does without being overly specific. The informative aspect of a mission
statement is particularly important for unique businesses with a purpose which is not readily
apparent. The mission statement should strike a balance of clarifying the purpose of the
business in the relevant field and providing inspiration.

Simple

When it comes to mission statements, too much detail can dilute the overall meaning. As
we write, try to capture the essence of our company in as few words as possible; too much
detail will make it vague. Simple, clear and concise language should be used. Distilling the
goals, character and values of the company into one or two sentences is not an easy process
and often takes a significant amount of time and discussion.

Memorable
A mission statement can help guide the actions of employees and decision makers but not
if it is impossible to remember. To help make the mission statement memorable, descriptive
words that can inspire action should be used. A green engineering firm might keep it to one
sentence with a mission statement that says, "To provide innovative, sustainable engineering
solutions." Employees can use the statement as a guiding principle in developing creative,
environmentally friendly engineering, while clients will understand the basic services and
moral underpinnings of the company.

Achievable

Although it can be tempting to write a grand mission statement, it is usually better to create
one that is achievable. A strong mission statement gives staff something concrete to work
on and a larger goal to work toward. It creates a balance between what we do and what we
can do.

Employee Buy-In

In order for a mission statement to be embraced by the entire company, we need to get
employee buy-in at all levels. To make sure that all of the staff members are behind the
statement, ask for a companywide review, from management to the lowest level. Ask for
feedback and take it seriously. In doing so, we can invite employees to add their insight and
create a sense of ownership that will strengthen the final mission statement.

Ten Criteria for Evaluating Mission Statements

(i) The mission statement is clear and understandable to all personnel, including all
support staff & parents.
(ii) The mission statement is brief enough for most people to keep it in mind.
(iii) The mission statement clearly specifies what business the organisation is in. This
includes a clear statement about: “What” needs the organisation is attempting to
fill, not what services are offered; “Who” the organisation’s primary
“customers” are; and “How” the organisation plans to go about its business.
(iv) The mission statement should have a primary focus on one strategic goal.
(v) The mission statement should reflect the distinctive competence of the
organisation.
(vi) The mission statement should be broad enough to allow flexibility in
implementation but not so broad as to permit lack of focus.
(vii) The mission statement should serve as a template and be the means by which
leaders and others in the organisation can make decisions.
(viii) The mission statement must reflect the values, beliefs, and philosophy of
operations of the organisation and reflect the organisational culture.
(ix) The mission statement should reflect attainable goals.
(x) The mission statement should be worded so as to serve as an energy source and
rallying point for the organisation. (Does it show your passion?)
Pursuing the Vision and Mission through SMART Goals

An organisation’s vision and mission combined offer a broad, overall sense of the
organisation’s direction. To work toward achieving these overall aspirations, organisations
also need to create goals—narrower aims that should provide clear and tangible guidance
to employees as they perform their work on a daily basis. The most effective goals are those
that are

Specific, Measurable, Achievable, Realistic, and Time-bound.

An easy way to remember these dimensions is to combine the first letter of each into one
word: SMART. Employees are in a much better position to succeed to the extent that an
organisation’s goals are SMART. A goal is specific if it is explicit rather than vague. West
Jet’s vision is that “By 2016, West Jet will be one of the five most successful international
airlines in the world providing their guests with a friendly caring experience that will change
air travel forever.”

A goal is measurable to the extent that whether the goal is achieved can be quantified. West
Jet’s goal of being one of the five most successful international airlines in the world by 2016
offers very simple and clear measurability: Either West Jet will be in the top five by 2016
or they will not.

A goal is aggressive if achieving it presents a significant (as opposed to easy) challenge to

the organisation. A series of research studies have demonstrated that performance is
strongest when goals are challenging but attainable. Such goals force people to test and
extend the limits of their abilities. This can result in reaching surprising heights.

West Jet committed to growing responsibly and ensuring that it is an environmentally

sustainable airline, and supports the IATA goal of carbon neutral growth in its industry
beyond 2020. WestJet already operates one of the most modern and fuel-efficient fleets in
North America.

Achieving carbon neutral growth will be a challenge for WestJet requiring the combined
efforts of the airline and its supplier partners such as aircraft manufacturers, airports and
government. In 2012, West Jet reported that “Our significant investments in fleet and
technology have greatly improved our aircraft fuel efficiency and ability to operate our
business more cost effectively. Between 2000 and 2012, we improved our fuel efficiency
by 44.8 per cent per revenue tonnekilometre. The resulting fuel savings are equivalent to
the amount of fuel that would have been used to fly a Boeing Next-Generation 737 from
Calgary to Toronto and back approximately 44,135 times (based on our 2012 fuel usage).”
(Quigley, 1994)

It is useful to know that easily achievable goals are not only easy, but they tend to
undermine overall motivation and effort by employees, Michelangelo said, “The greater
danger for most of us lies not in setting our aim too high and falling short, but in setting our
aim too low, and achieving our mark.” Consider a situation in which you have done so well
in a course that you only need a score of 60 percent on the final exam to earn an A for the
course. Understandably, few students would study hard enough to score 90 percent or 100
percent on the final exam under these circumstances Similarly, setting organisational goals
that are easy to reach encourages employees to work just hard enough to reach the goals.

It is tempting to extend this logic and thinking to conclude that setting nearly impossible
goals will encourage even stronger effort and performance from staff. However, people act
rationally and tend to become discouraged and give up when faced with goals that
realistically have little chance of being reached. If, for example, Starbucks had set a time
frame of one year to regain a share price of $35, it would have attracted scorn. The company
simply could not be turned around that quickly. Similarly, if WestJet’s fuel efficiency goal
was 100 percent improvement, WestJet’s employees would probably not embrace it. Thus
goals must also be realistic, meaning that their achievement is feasible.

Most of us have found that deadlines are motivating and that they help us structure our work
time. The same is true for organisations, leading to the conclusion that goals should be time-
bound through the creation of deadlines. WestJet has set a goal to achieve a cumulative 45
per cent improvement in fuel efficiency for our 737 fleet by 2020, as compared to the 2000
base year. (WestJet, 2012)

The period after an important goal is reached is often overlooked but is critical. Will an
organisation rest on its laurels or will it take on new challenges? Starbucks provides an
illustrative example. In 2011, after a revamp of the company’s stores and services, the stock
price was around $35. In early 2014, the price was in the $70 range.
Goals and Objectives

Goals and objectives are the end results for which an organisation is established and run by
utlising all its available resources. Since the achievable results of an organisation can be
expressed in different ways, both quantitative and qualitative manner, say either in terms of
volume of production, amount of profit and in many other parameters like achieving market
leadership, establishing brand image brand image etc.the question is : for which result the
term ‘Objective’ and for which result the term ‘Goal’ should be used. This problem arises
because these two terms are used in avariety of ways; many of them are conflicting.

Often these terms are used interchangeably to denote the same thing – the end results an
organisation tries to achieve. On the basis of long-term and short term orientations these
two terms Objectives and Goals are used. Objective refers to the long term results and goal
refers to the short term results. Hence, it can be said that the long term objective is the
summation of short-term goals. Though some other authors hold a reverse view about these
two terms on the basis of long term and short term orientations, the aforesaid view is more
popular and widely used in management. Not only that in different countries these two terms
is used in different manners on the basis of long term and short term orientations. For
example, in Mexico and many other Latin American Countries, objectives have long term
orientations, while goals have short term orientations. In the USA, previously objectives
denoted long term orientations which place has been occupied by goals. Therefore current
management literature originating from USA or European countries has this kind of
orientations. However, a differentiation between the two terms can be made in the following
way.

(i) Time Frame : Goals are timeless, enduring and un ending; objectives are temporal, time
phased, and intended to be superceded by subsequent objectives. Goals usually relate the
on-going activities of an organisation; their achievement tends to be open-ended in the sense
of not being bound by time. For example, the survival, as a goal of a business organisation,
is never completely attained since failure is always a future possibility.

(ii) Specificity: Goals are stated in broad general terms, dealing with matters of image, style,
and self perception. These are aspirations to be worked in future. On the other hand,
Objectives are more specific, stated in terms of a particular result that will be accomplished
by a specific date. In the above example, survival as a goal is not very specific because it
leads to different interpretation of the state of survival. Objectives can be expressed in more
specific terms in a time bound manner, say achieving 10 percent growth in the net sales in
the next year.

(iii) Focus : Goals are usually stated in terms of some relevant environment which is external
to the organisation; while objectives are more internally focused and carry important
implications about how resources available to the organisation are utilized or to be utilized
in future. Therefore, goals are more generalized statements like maintaining market
leadership, striving continuously for technological superiority, etc. An objective may imply
a resource commitment requiring the organisation to use those resources in order to achieve
the desired outcomes.

(iv)Measurement: Both goals and objectives can be stated in quantitative terms though the
character of measurement is different. Generally, goals are set in qualitative and relative
terms. For example, accompany has stated its goal like this:to achieve leadership position
in the industry sector. This goal may not be achieved in one single year, but it is timeless
and externally focused, providing a continuing challenge for the company. Objectives are
expressed in quantitative and absolute terms. For example, a company has stated its
objective to achieve 20 percent growth in its sales in the next year. The achievement of this
objective can be measured irrespective of environmental conditions and competitors’
actions.

How to formulate a good mission statement

Most organisations derive their Mission statements from particular set of tasks which are
supposed to be essential to be performed in the light of their individual, national, or global
priorities. Several public sector organisations, set up in India during 1950s and 1960s, owe
their existence to the vision of Jawharlal Nehru, the first Prime Minister, who enunciated
and tirelessly worked for the national aim of building a strong and self-reliant India by
laying the foundations of many of our basic infrastructural industries. The vision of Nehru
led many of these public sector organisations to set their missions.Whether derived from
set priorities or not, mission statements may be formulated either formally or informally.

Usually, entrepreneurs lay down the corporate philosophy which the organisation follows
in its strategic and operational activities. Such a philosophy may not be consciously and
formally stated but may gradually evolve due to entrepreneur’s actions.. Generally an
entrepreneur has a perception of the type of organisation that he wants his company to be.
Mission ststements could be formulated on the basis of the vision that the entrepreneur
decides in the initial stage of an organisation’s growth.

Major strategies could also contribute to the development of a mission statement.They do

this informally by lending a hand in the creation of a particular corporate identity or
formally through the discussions and writing down of a mission statement. Chief
executives play a major role in formulating a mission statement both formally and
informally.They may set up executive committees to formally discuss and decide on a
mission statement or enunciate a a corporate philosophy to be followed for strategic
management.Consultants may also be called upon to make an in-depth analysis of the
organisation to suggest an appropriate mission statement.B.N.sinha, Managing Directorof
the Scientific Instrument Company Ltd., who took the help of a management consultant
in deciding his company’s mission and purpose, describes the process of formulating a
mission :”…as a starting point, we(i.e the company managers,the consultant, and the Chief
executive) spent quite a bit of time on identifying our ‘mission’ of business….After a lot
of discussion, we identified our mission as follows : to be a vibrant organisation set on
contributing to the scientific and technical progressof the country; keeping its customers
and employees satisfied in terms of service and work reward; giving adequate returns on
investment to the shareholders”.

A team of manegers and consultants report on the process of articulating, vision, mission,
and values at, a ACG worldwide, a 50 year old medium-sized company engaged in the
pharmaceutical industry in India. They used the process of appreciative inquiry through
story-telling by a large number of company employees to share their achievements ,
enthusiasm, and appreciation. The themes that emerged from these stories were then
identified and analysed to design the vision, mission, and value statements.
Here are a few examples of how organisations formulated and communicated their
mission statement :

HCL : The environment for computer companies became quite competitive by 1991. A
need was felt to provide a feeling of oneness in organisation. A core management team
assessed the internal strengths and designed a customer-centric mission statement for team
building, mutual trust, internal customer server equations, and empowerment.

RANBAXY LABORATORY : The company realized the competition in pharmaceuticals

industry was becoming tough and it could not survive just by selling generic drugs. The
CEO enunciated the mission and values in 1993, after a year of deliberations on future
directions, strategies involved, and past experiences. Later measures were takento
communicate it extensively throughout the company down to the level of workers.

Communicating the mission statement is as important as formulating it well. This is so

since a positive relationship exists between the performance of a company and the number
of methods used to communicate and disseminate a mission statement. High visibility
with the mission statements posted on multiple locations is an effective tactic to aid
mission familiarity and recognition by the employees. There are several methods of
communicating the mission statement within the organisations, such as Annual Reports,
Posters/Plaques, employee manuals, company information kits, word-of-mouth publicity,
seminars and workshops, newsletters, and advertisements.Company websites are also used
as a medium for communicating the vision and mission to stakeholders.

A mission statement , once formulated and communicated, should serve the organisation
for many years. But a mission may become unclear as the organisation grows and adds
new products , market, and technologies to its activities. Then the mission is to be
reconsidered and re-examined to either changeor discard it and evolve a fresh statement of
organisational mission.

However the following steps should be followed in formulating a mission statement.

1. Start with a market-defining story

You don’t have to actually write the story—it’s definitely not included in the mission
statement—but do think it through:

Imagine a real person making the actual decision to buy what you sell. Use your
imagination to see why she wants it, how she finds you, and what buying from you does
for her. The more concrete the story, the better. And keep that in mind for the actual
mission statement wording: “The more concrete, the better.”
A really good market-defining story explains the need, or the want, or—if you like
jargon—the so-called “why to buy.” It defines the target customer, or “buyer
persona.” And it defines how your business is different from most others, or even unique.
It simplifies thinking about what a business isn’t, what it doesn’t do.

This isn’t literally part of the mission statement. Rather, it’s an important thing to have in
your head while you write the mission statement. It’s in the background, between the
words. If you’re having trouble getting started, make a quick list of what your company
does and doesn’t do.

2. Define what your business does for its customers

Start your mission statement with the good you do. Use your market-defining story to
sass out whatever it is that makes your business special for your target customer.

Don’t undervalue your business: You don’t have to cure cancer or stop global climate
change to be doing good. Offering trustworthy auto repair, for example, narrowed down to
your specialty in your neighborhood with your unique policies, is doing something good.
So is offering excellent slow food in your neighborhood, with emphasis on organic and
local, at a price premium.

This is a part of your mission statement, and a pretty crucial part at that—write it down.

If your business is good for the world, incorporate that here too. But claims about being
good for the world need to be meaningful, and distinguishable from all the other
businesses. Add the words “clean” or “green” if that’s really true and you keep to it
rigorously. Don’t just say it, especially if it isn’t important or always true.

For example, Apple Computer’s 2017 mission statement is:

“Apple designs Macs, the best Personal Computers in the world, along with OS-X,
iLife,iWork and professional software. Apple leads the digital music revolution with its
iPods and iTunes online store. Apple has reinvented the mobile phone with its
revolutionary iPhone and App store, and is defining the future of mobile mediaand
computing devices with iPad”

That one obviously passes the test of defining the company with flying colors. Nobody
could mistake that mission with generic hype. And it’s an interesting change from the
early mission as defined by founder Steve Jobs:

“To make a contribution to the world by making tools for the mind that advance
humankind”.Ikea, on the other hand, starts its mission statement with something that could
be any company anywhere. “Our vision is to create a better everyday life for the [sic]
many people.” To its credit, it goes on to define a “rest of the mission” that could only be
IKEA:

“We make this possible by offering a wide range of well-designed , functional home-
finishing products at prices so low that as many people as possible will be able to afford
them”.

And note, in this mission statement, how Sweetgreen incorporates a world vision into a
product-oriented mission statement:

“Founded in 2007, Sweetgreen is a destination for delicious food that’s both healthy for
you and aligned with your values. We source local and organicingredients from farmers
we know and partners we trust, supporting our communities and creating meaningful
relationships with those around us. We exist to create the experiences where passion and
purpose come together”

3. Define what your business does for its employees

Good businesses are good for their employees too or they don’t last. Keeping employees is
better for the bottom line than turnover. Company culture matters. Rewarding and
motivating people matters. A mission statement can define what your business offers its
employee.

My recommendation is that you don’t simply assert how the business is good for
employees—you define it here and then forever after make it true.

Qualities like fairness, diversity, respect for ideas and creativity, training, tools,
empowerment, and the like, actually really matter. However, since every business in
existence at least says that it prioritizes those things, strive for a differentiator and a way to
make the general goals feel more concrete and specific.

With this part of the mission statement, there’s a built-in dilemma. On the one hand, it’s
good for everybody involved to use the mission statement to establish what you want for
employees in your business. On the other hand, it’s hard to do that without falling into the
trap of saying what every other business says.

Stating that you value fair compensation, room to grow, training, a healthy, creative work
environment, and respect for diversity is probably a good idea, even if that part of your
mission statement isn’t unique. That’s because the mission statement can serve as a
reminder—for owners, supervisors, and workers—and as a lever for self-enforcement.
If you have a special view on your relationship with employees, write it into the mission
statement. If your business is friendly to families, or to remote virtual workplaces, put that
into your mission.

And this is rare in mission statements. The vast majority are focused on messaging for
customers. My recommendation here is not the norm. I include it because it’s good
practice, even though not common.

While I consulted for Apple Computer, for example, that business differentiated its goals
of training and empowering employees by making a point of bringing in very high-quality
educators and presenters to help employees’ business expertise grow. That was part of the
culture and, to my mind, part of the mission; but it wasn’t part of the mission statement. It
could have been.

American Express, however, includes the team in its mission:

“We have a mission to be the world’s most respected service brand. To do this, we have
established a culture that supports our team members, so they can provide exceptional
service to our customers”

4. Add what the business does for its owners

In business school they taught us that the mission of management is to enhance the value
of the stock. And shares of stock are ownership. Some would say that it goes without
saying that a business exists to enhance the financial position of its owners, and maybe it
does. However, only a small subset of all businesses are about the business buzzwords of
“share value” and “return on investment.”

In the early years of my business I wanted peace of mind about cash flow more than I
wanted growth, and I wanted growth more than I wanted profits. So I wrote that into my
mission statement. And at one point I realized I was also building a business that was a
place where I was happy to be working, with people I wanted to work with; so I wrote that
into my mission statement, too.

However, this element too, as with the suggestion about including employees, is unusual.
Few mission statements do it. That’s understandable, since most mission statements are
outward facing only, aimed at customers and nobody else.

Still, some of the best mission statements incorporate a much broader sense of mission
that includes, or at least implies, the mission of ownership.
Warby Parker, an eyewear company, does a great job at voicing a higher mission that
includes customers, employees, and owners.

“Warby Parker was founded with a rebellious spirit and a lofty objective: to offer designer
eyewear at a revolutionary price, while leading the way for socially-concious business”

5. Discuss, digest, cut, polish, review, revise

Whatever you wrote for points two through four above, go back and cut down the wordiness.

Good mission statements serve multiple functions, define objectives, and live for a long
time. So, edit. This step is worth it.

Start by considering developing a full mission statement for internal use and using a
customer-facing subset for general publication. That’s common. Many companies have
segmented mission statements, with sections set aside and categorized by type or goal. Use
bullet points or sections if that works for you. Part of the reason people confuse mission
with mantra and vision is that many businesses use them together, and many others also
redefine them to fit their context. So what a company does for customers is often called
vision, despite the formal definition.

Remember, form follows function, in mission statements, as in all business. Make it

work for your business. Or don’t do it at all. If you want to call it a vision, and that works
for employees and customers, then do that.

As you edit, keep a sharp eye out for the buzzwords and hype that everybody claims. Cut
as much as you can that doesn’t apply specifically to your business, except for the occasional
special elements that—unique or not—can serve as long-term rules and reminders. Unique
itself, the word, means literally, the only one in the world. Use it sparingly. Phrases such as
“being the best possible,” “world-class,” and “great customer service” mean little because
everybody uses them. Having great customer service is way harder than writing that into a
mission statement.

Read other companies’ mission statements, but write a statement that is about you and not
some other company. Make sure you actually believe in what you’re writing—your
customers and your employees will soon spot a lie.

Then, listen. Show drafts to others, ask their opinions, and really listen. Don’t argue, don’t
convince them, just listen. And then edit again.

And, for the rest of your business’s life, review and revise it as needed. As with everything
in a business plan, your mission statement should never get written in stone, and, much less,
stashed in a drawer. Use it or lose it. Review and revise as necessary, because change is
constant.

Organisations legitimate themselves by performing some functions that is valued by the

society. A mission statement defines the basic reason for the existence of the organisation.
Such a statement reflects the corporate philosophy, identity, character and image of an
organistaion. It may be defined explicitly or could be deduced from the management’s
actions, decisions, or the chief executive’s press statements. When explicitly defined it
provides enlightenment to the insiders and outsiders of what the organisation stands for. In
order to be effective, a mission statement should possess the following seven characteristics.

1. It should be feasible A mission should always aim high but it should not be an impossible
statement. It should be realistic and achievable--- its followers must find it to be credible.
But feasibility depends on the resources available to work towards a mission. In the 1960s,
the US National Aeronautics and Space Administration (NASA) had a mission, to land on
the moon. It was a feasible mission that was ultimately realized.

2. It should be preciseA mission statement should not be so narrow that to restrict the
organisation’s activities not should it be too broad to make itself meaningless.
“Manufacturing Bicycles” is a narrow mission since it severely limits the organisation’s
activities while ‘mobility business’ is too broad aterm as it does not define the reasonable
contour within which an organisation could operate. Observe how Hero Cycles defines its
mission: ‘It’s our mission to strive for synergy between technology, systems and human
resources, to produce products and services that meet the quality, performance and price
aspirations of our customers. While doing so, we maintain the highest standards of ethics
and social responsibilities.’

3. It should be clear A mission should be clear enough to lead action. It should not just be
a high-sounding set of platitudes meant for publicity purposes. Many organisations do adopt
such statements (sometimes referred to as corporate positioning statement) but probably
they do so for emphasizing their identity and character. For example, India Today saw itself
as ‘the complete news magazine’ and now visualizes its mission as ‘making sense of India’.
The administrative Staff College of India considers itself ‘the college for practicing
managers’. Better still is the Hindustan Unilever Limited’s (HUL’s) mission to ‘add vitality
to life’ leading to various strategic actions for being the largest consumer goods company
in India.

4. It should be motivating A mission statement should be motivating for the members of

the organisations and the of the society, and they should feel it worthwhile working for such
an organistaion or being its customers. A bank which lays great emphasis on customer
service is likely to motivate its employees to serve its customers well and to attract clients.
Customer service, therefore, is an important purpose for a banking institution. Yes Bank’s
strategic vision, 2015, includes the mission of ‘ to establish a high quality, customer centric,
service driven, private Indian bank catering to the future businesses of India’.

5 It should be distinctive A mission statement which is indiscriminate is likely to have a

little impact. If all two-wheeler manufacturers defined their mission in a similar fashion,
there would not be much of a difference among them. But if one defines it as providing two-
wheelers that would provide value for money, for years it creates an important distinction
in public mind. Bajaj Auto adopted its popular mission of providing ‘value for money, for
years’ going over to ‘inspiring confidence’ and now being ‘distinctly ahead’.

6 It should indicate Major Components of StrategyA mission statement, along with the
organisational’s purpose should indicate the major components of the strategy to be
adopted. The mission of HCL Infosystemsis : ‘ We enable business transformation and
enrichment of lives by delivering sustainable world class technology products, solutions and
services in our chosen markets thereby creating superior shareholder value.’ It provides a
clear indication of the emphasis in the strategies of the company on technology, products,
solutions, services and shareholder value while being sustainable.

7. It should indicate how Objectives are to be AccomplishedBesides indicating the broad

strategies to be adopted a mission statement should also provide clues regarding the manner
in which the objectives are to be accomplished. Oxfam India, in the voluntary sector, seeks
to achieve its mission through the empowerment of the poor and marginalized to demand
their rights, engagement of the non-poor to become active and supportive citizens,
advocating for an effective and accountable state, and making markets work for poor and
marginalized people.

In day to day decision making, managers are not concerned about survival and,
therefore, do not actively think about their organisation’s mission for society. Thus, a
mission statement becomes an ideology that is occasionally used for legitimization. But for
strategic decision-making, it is important to consider the mission in each phase of the
strategic management process.

A helpful approach to defining as well as refining a mission statement is to define the

business itself.

Drucker’s Performance Area

“Performance” is the synonymy of “Result”. Drucker had in-depth discussion on

performance and result in his writings. He proclaimed,
“Management is practice. Its essence is not knowing but doing. Its test is not logic but
results. Its only authority is performance.”

At the last stage of Drucker’s life, he defined managers as the achievers. He suggested that
when it came to hiring or promoting an employee; instead of looking at the potential of the
candidates, the work performance of the candidates should be the sole factor that is taken
into consideration.

Scrutinising the strengths of employees by examining their performances and achievements

in the past, so as to assign them to the appropriate job positions. Drucker was once asked
how he would like to be remembered, he answered, “ I want to be remembered for leading
some people to do the right things.”

Performance plays a significant role in Drucker’s management theory. Two fundamental

management tools – Innovation and Business theory of an organisation, are seen as two
utmost important Drucker’s ideologies.

Importance of performance is conspicuous. However, the problem is how can we be certain

that we attain performance? How do we know if the result attained is our final goal? What
determines the performance and result? The answers to all these questions have to be
referred to the business objectives of the enterprise or organisation.

Drucker suggests that, we have to set the organisational objectives based on the evaluation
of the outer environment, as well as the goal and competence of the organisation. And we
will be able to outline the expected performance and result based on the organisational
objectives. This process is the essence of strategic planning, which also constitutes the
business theory of an organisation or enterprise.

Drucker has raised three classic questions to explain the concept of theory of the business:
What is the nature of our business? Who are our customers? What are the core values of the
customers? Our path of thinking and answers to these questions should be derived from
essences of these questions; the answers will help us out with constructing the strategy for
actualizing centralization within an organisation.

We have to identify the client groups that need you the most, at the same time you are most
willing to satisfy their needs and skillful at serving them. If you are able to integrate these
two criteria, then you will succeed in grasping the target market.

If you can find a market that allows you to make efforts that is less than or equal to others,
while achieve greater results than others in return, then this is the market that best suits you.

Centralization is a business strategy that forces you to choose your battlefield, and it
determines the placement of the resources of the company.
In the end, business objectives have to be actualized by applying it on actual works and
ideologies of the company, if not it will simply becomes autistic thinking.

The most important aspect of business strategy and business objectives, is to plan out the
strategic business moves that will lead to attainment of the performance goal; while
distribute enough resources, including the best talents within an organisation, for the
business moves.

None of the marketing theories are everlasting, they need to be revised, reviewed and even
rebuilt from time to time. Although enterprises that have over hundred years of history do
exist, none of them stake their survival on a single product throughout the enterprise history.
On the other hand, none of these enterprises follow through the same marketing strategies
and management methods in order to survive.

Drucker emphasizes that all products, services, working process and marketing strategy
have to be reviewed periodically, so as to find out which components are outdated and
invalid.

Revision of business theory does not induce innovation. Organisation needs to innovate
from time to time, even when the current business theory is still workable. However,
invention of a new business theory brings about important innovation.
A new business theory is not an extension of the existing market and product line; instead
it leads to products and markets that are never seen before.

An enterprise only has two obligations: Marketing and Innovation. Only these two tasks can
bring about results, while all others are considered as cost of the business.

Building the business theory of an organisation is the fundamental marketing tasks.

Business theory assists the company with exploring the needs of customers; thus, any
amendment to the business theory is the upmost important innovation of an enterprise.

From this angle of view, we know that innovation should be treated as the Active
marketing. In today’s volatile economy, the revision of business theory becomes more
frequent than before.

In the past some of the renowned enterprises can survive on the same business theory for a
few decades, or even half a century; however, this is no longer the case. The change also
indicates that all modern managers have to be ready for innovation at all time, instead of
simply modifying the qualities of the existing products, working process and services.

Although we are situated in an era that all business theories are needed to be modified
constantly; nevertheless, it gives us the chance to enter new business sectors and new
markets. The era is pushed forward by innovation; today is the era of which the newcomers
surpass the old-timers.
Performance is a cruel master. It requires all managers to shoulder the responsibilities of
fostering the social resources, Drucker called this the ethics responsibility, legality and
righteousness of management; on the other hand, the quest for high standard of performance
motivates all managers and their subordinates to perform at their full potentials; it also help
to build sense of achievement while actualize the freedom and dignity of everyone.

“Management is to make an organisation to attain high performance.” Human has invented

all sorts of tools in the history, which extended from manual tools to mechanical facilities,
atomic science, spaceships, Internet and biological engineering. Human beings can do both
good deeds and bad deeds by using any of the above tools. Management is also a tool, and
it is far more effective than all kinds of high technology.

In fact, management determines the usage of all resources, including both live and dead
resources, physical resources and knowledge resources; while it also determines the
efficiency of these recourses.

However, management is different from other tools. People cannot use the power of
management to control others nor utilize their bad deeds.

Management is a tool for bringing about goodness. The ultimate goal of management is to
bring about positive change and improve the living qualities of people. Goodness is the
inborn nature of management; it helps to determine what kinds of enterprise performance
are needed by the society.

Five time-proven practices from the pioneering management thinker

There aren’t a lot of business books from more than a half-century ago that have stood the
test of time, but Peter Drucker’s The Effective Executive, issued in a spiffy 50th
Anniversary edition in 2017, is one of the select few. Back in 1967, when many of today’s
business readers weren’t yet a gleam in their parents’ eyes, Drucker, whom Tom Peters said
invented modern management, declared, “The executive is, first of all, expected to get the
right things done. And this is simply saying that he is expected to be effective.”

Drucker is as relevant today as he was in the last century because he approached the study
of management like an exercise in anatomy. His clarity of thought and language was a
scalpel, which he used to lay bare every aspect of his chosen subject and reveal its essence.
In The Effective Executive, Drucker applied that scalpel to leadership.

Drucker was of two minds as to whether leaders are made or born. In The Practice of
Management, another classic business book, which was published more than a decade
earlier in 1954, he treated it as a matter of natural aptitude and ingrained attitude:
“Leadership is of the utmost importance. Indeed there is no substitute for it. But leadership
cannot be created or promoted. It cannot be taught or learned.”

By the time, Drucker wrote The Effective Executive, however, he seems to have changed
his mind. In it, he described five practices that can make you a more effective leader:

1. Manage your time

“Time is the scarcest resource,” wrote Drucker, “and unless it is managed, nothing else
can be managed.” Successful executives know how they spend their days, and they
dismiss or delegate any activity that doesn’t require their direct attention.

To identify the unnecessary time-sucks in your day, Drucker suggested jotting down
everything you do in real time. Even better, these days you could get a time management
app. Then, examine your activity entries and, for each one, ask yourself, “What would
happen if this were not done at all?” If the answer is nothing (and it often will be,
according to Drucker), stop doing it. If the task needs to be done, ask yourself if it could
be done by somebody else. If so, delegate it. Repeat every few months to make sure
you’re still spending your time wisely.

2. Focus on contribution

Effective executives hold themselves “accountable for the performance of the whole,”
wrote Drucker. By that he meant that they aren’t solely focused on their own performance
or careers. Instead, the most effective leaders are team players who work hard to realize
the strategic goals of their organisations.

To direct your focus to what you can do to maximize your contribution to your company,
Drucker had some pithy advice. He said to start by “asking other people in the
organisation, superiors, subordinates, but above all, colleagues in other areas: ‘What
contribution from me do you require to make your contribution to the organisation?’”

3. Build on strengths

Drucker preached a strengths-first approach to management decades before it became a

corporate buzzword. Effective executives drive team productivity and results, he wrote, by
building on “available strengths — the strengths of associates, the strengths of the
superior, and one’s own strength.”

Train yourself to focus on strengths instead of weaknesses by concentrating on what

employees can do rather than what they can’t do, advises Drucker. Seek out only the best-
qualified people, instead of those who play well with others or who appear to have no
flaws (they invariably do). And don’t forget to apply this practice to yourself — identify
your own strengths and use them to improve your performance.

4. Prioritise and concentrate

Long before we were all tethered to our smartphones, Drucker was warning leaders about
the dangers of multitasking. He said that effective executives focus all their faculties on
one achievement at a time. Why? “The more one can concentrate time, effort, and
resources,” Drucker wrote, “the greater the number and diversity of tasks one can actually
perform.”

To make the most of your concentrated effort, first prioritize your tasks. Prioritization is
key, said Drucker, because if you’re only working on one thing, you must make sure it’s
the right thing. “Effective executives do first things first,” he wrote, “and they do one
thing at a time.”

5. Make decisions systematically

Finally, Drucker said that effective leaders make sound decisions — that means no on-the-
fly calls or going with your gut. Sound decisions, he said, come from using a repeatable,
consistent process with clearly defined elements executed in a distinct sequence.

How should you approach decision making? Drucker offered these tips:

Determine what kind of decision is required. If the issue is ongoing, you’ll need to
develop a policy; if it’s a one-off situation, make the call and move on.

Define the decision’s “boundary conditions” — that is, its objectives, minimum goals, and
the conditions it must meet — before you make it.

Shoot for the ideal outcome to start. Save the inevitable compromises for later, when it’s
time to implement the decision.

Define the actions necessary to implement the decision in the decision.

Don’t chisel your decisions in stone. Allow for post-implementation feedback and adapt
the decision when needed.
 Bennis’ Core problem

Like other leadership gurus of his generation, Warren Bennis jumped on the disastrous
1980's management-bashing bandwagon, thus helping to create a distorted glorification of
leadership.
Japanese business success in the West, beginning in the 1970’s, created a virtual tsunami, a
tidal wave that flattened management and replaced it with leadership. This knee-jerk,
emotional reaction prevented us from reinventing management. We have been paying the
price ever since.
The bottom line is that, management upgraded can do much of what 1980’s leadership gurus
such as Warren Bennis assign to leaders. Consequently, we can say with confidence that
Bennis’s notoriously well known clichés glorifying leadership and condemning
management are total biases with no foundation in fact. Bennis is right that leadership is
badly needed. But we can’t fully capitalize on it until we upgrade management and develop
a new understanding of leadership.
Bennis regards both managers and leaders as occupying roles in charge of people. He
differentiates them in terms of style, making it clear that leaders simply do it better.
Specifically, leaders for Bennis are inspiring and emotonally engaging. But this line of
thinking is doomed to fail because style is fundamentally situational. That is, some leaders
are inspiring; some are not. Some followers need to be inspired; some don’t. Some managers
may be controlling but some aren’t. Thus there are no universal style differentiators.
A way around this dilemma is to switch our focus from people in roles to the processes of
leadership and management. This change of emphasis shows how all employees can both
lead and manage and gives us a completely new perspective on how these two functions
work. But first, let’s take a look at Bennis’s infamous clichés.
Bennis’s Biases
Warren Bennis is famous, notoriously so, for the following one-liners that purport to
differentiate leaders from managers:
• The manager administers, the leader innovates.
• The manager is a copy, the leader is an original.
• The manager maintains, the leader develops.
• The manager focuses on systems and structures, the leader focuses on people.
• The manager relies on control; the leader inspires trust.
• The manager has a short-range view; the leader has a long-range perspective.
• The manager asks how and when, the leader asks what and why.
• The manager has his or her eye always on the bottom line; the leader’s eye is on the
horizon.
• The manager imitates; the leader originates.
• The manager accepts the status quo; the leader challenges it.
• The manager is the classic good soldier; the leader is his or her own person.
• The manager does things right; the leader does the right thing.
Many of these clichés are simply rewordings of the same message, hence managers can only
administer, copy, maintain, imitate, do things right and accept the status quo. Conversely,
leaders innovate, originate, develop, challenge the status quo, look to the future and do the
right things.
However, none of these one-liners has any truth to it. To see this, we need to redefine
management and leadership.
Management Rehabilitated
Management is not a role by definition; managers apply the same management processes
that non-managers use. Rather, management is a process or tool for achieving goals. It can
be defined as achieving goals in a way that makes best use of all resources. Not being a
role, it is a tool that everyone can use, not just all employees but all people who want to
make best use of their resources in relation to their goals.
This definition includes self-management: managing your own time, career and finances.
Clearly you can be quite creative in how you manage yourself. You aren’t restricted to
administering, imitating or maintaining the status quo. We escape these damning phrases
by defining management in terms of outcome or purpose and that completely leaves open
the means, the input side of the equation.
Management is like investment, which is aimed at achieving the best possible return.
Management also aims at getting the best return, but on a wider set of resources, not just
money. Effective management, like effective investment, achieves the highest return
possible. Both are tools or processes for making the most of certain resources in relation to
particular goals.
More precisely, management is a function, which means defining it in terms of
the purpose it serves. Analogously, a hammer is defined by its purpose in pounding in nails,
a heart by its function of circulating blood. The function of management is to achieve
objectives in a way that makes best use of all available resources.
Notice that our definition doesn’t specify people. When we manage our time or finances,
we are not managing people. Hence, management can’t be controlling by definition. In any
case, the means of managing people are totally open. Thus particular managers could be
controlling, but they could also be empowering, supportive and nurturing. The style they
use is partly determined by their personalities but, more importantly, by the types of people
that they need to make best use of in relation to their goals.
Before we say more about how management works, we need to redefine leadership.
Leadership Reinvented
Leadership, like management, is not by definition a role although it can be shown on an
occasional basis by people in roles. Like management, leadership is a process that can be
defined functionally in terms of its purpose: to influence people to accept a better way,
either by example or by promoting a new direction. Leadership works through influence
and its function is to move people in a different direction.
A crucial advantage of this definition of leadership is that it covers
leadership across organisational boundaries whereas conventional definitions limit
themselves to people showing leadership downwards within organisations.
For example, a green leader promoting environment friendly policies in Australia could
have a leadership impact on communities in Argentina without being in charge of those who
follow. Similarly, companies like Apple lead by example in their markets. Hence, our
definition doesn’t even require the leader to be an individual, let alone in charge of those
who follow: the leader can be a group.
How Leadership and Management Work
Clearly, if leadership can be shown across group boundaries, then it can’t be a role within
the follower group, it can’t be a responsibility for that group and it can’t make decisions for
it. All it can do is influence the follower group to move in a different direction and that is
how leadership works.
But, if leadership can only influence a change in direction, then ALL decisions must be
managerial. This includes strategic decisions, not just those pertaining to efficient
execution. But don't leaders make decisions too? Yes, but they can't SHOW leadership BY
making decisions, except by example, because deciding for a group is not a form of
influence.
Applying our Definitions to Bennis’s Biases
Bennis claims that leaders innovate while managers only administer. Our view says that
both can innovate. Managers can innovate in either of two ways: by deciding on a new
direction or by facilitating innovation in others. Leaders can only advocate a new direction
to influence people to change.
His claim that managers focus on systems and processes while leaders focus on people is
simply wrong. Managers need to motivate, empower, develop and yes, inspire people to
work harder. They can also inspire them to be more creative. Keep in mind that the function
of management is to get the most out of all resources and that must include inspiring people
in order to help them achieve their full potential.
Leaders do, however, focus on people as Bennis claims, but not in the way he thinks.
Only people can be influenced of course, not things. But the leader’s focus on people has
nothing to do with developing or empowering them. This must be the domain of
management if leadership can work across organisational boundaries where the leader has
no power to develop or empower followers.
One of Bennis’s most popular clichés is his claim that managers do things right while
leaders do the right things. Strictly speaking, leaders don’t do anything; they influence
others to do things. Also, leadership can be used for evil ends so their focus need not be on
the “right” things except in the sense of what seems right to the leader. Of course, leaders
do things when they lead by example, but Bennis's claim is that leaders make the right
decisions, which, if leadership is influence, can't be a way of leading.
Conversely, managers need to do the right things and do them right if they are to achieve
their goals in a way that makes best use of all resources. Because management is a decision
making function, it must decide on what goals to pursue in the first place if it is to be
effective.
Bennis claims that managers rely on control, leaders on trust. All roles and responsibilities,
even being a lighthouse keeper, depend on trust. But leadership is not a role, hence not a
responsibility. Strictly speaking, like all other forms of influence, it is an impact on people,
one that can have good or evil ends. Further, managers don’t need to rely on control. They
can use whatever means necessary to get the best out of people, including allowing them to
manage themselves if that is what will work best.
Yes, the leader challenges the status quo in order to influence a change in direction, but
managers can also challenge the status quo by deciding on a new direction or
by facilitating such a decision in others.
The Role of Vision
Bennis interviewed numerous political leaders and CEOs and found them all to be very
focused on getting things done, starting with a compelling vision. With leadership and
management redefined, we can say that it is managers who get things done. Leaders can
only promote a new direction.
But, because the means of leading people are completely situational, leadership may or may
not require a vision. In small scale technical contexts a good idea for a change to a product
could influence people to change their focus. It doesn’t need to be as grand as a vision.
Clearly, leadership must provide direction, but in some situations, like a crisis for example,
a vision is not essential. Further, leading by example does not work through the verbal
articulation of a vision at all.
Bennis, like most other leadership gurus, studies glamorous, high profile leaders in business
and politics. But this is like trying to understand everyday influence by examining the
spellbinding power that rock stars have over us.
It is strange that leadership gurus focus on media personalities, so-called “great” leaders to
understand leadership generally. In The Ideal Leader, I argued that our fixation on such
larger-than-life characters says more about us and our needs than it does about leadership.
There is no good reason why we can’t learn just as much about leadership by observing the
actions of a front-line team leader or an employee who, by working smart, leads others by
example.
Focusing on glamorous leaders has the unfortunate consequence that we are led to believe
that being a leader means being a certain kind of person, generally a pretty heroic one at
that. But if leadership is a process of influencing people to think or act differently, then there
is no special kind of person required.
This is because leadership, like all influence, is an impact and that means that what it takes
to influence people is totally situational. Thus it is not about the person leading at all, but
what it takes to influence a particular group of people. For some it may take a vision. For
others, quietly stated hard facts might do the trick. Again, the function of leadership is to
influence people, but the means are whatever will work.
In conclusion, Warren Bennis has had a lot to say about leadership that has resonated with
a lot of people. But if leadership is really about challenging the status quo, then it is time to
question status quo views like his that have prevailed for so long. It is time to bring
management back from the dead and put it back in its rightful place as a key driver of
organisational prosperity.
Most importantly, we need to see that the views of all leadership gurus who did their seminal
thinking in the 1980's are very distorted because of the irrational rejection of management
that occurred at that time
The Four Failures of Leaders
Times such as these expose many weaknesses. We have seen problems emerging in all
sectors: housing, banking, commodities, stocks, services, pensions and manufacturing, to
name a few.

When markets are bullish, leaders are often protected from scrutiny because the spoils of
success divert attention. When times turn hard, however, the failures or defects of leadership
are exposed for all to see. These are not usually a pretty sight. As George Bernard Shaw
reminds us, “Success covers a multitude of blunders.”

There is widespread agreement that the current economic crisis has been brought about by
poor leadership and greed. In a recent Globe & Mail newspaper article, Professor Henry
Mintzberg, of McGill University in Montreal, suggests that much of the blame for economic
failure can be tied directly to the failure of management education:

“Every decade, American business schools have been graduating more than a million
MBAs, most of whom believe that, because they sat still for a couple of years, they are ready
to manage anything. In fact, they have been prepared to manage nothing.”

Ouch! Professor Mintzberg goes on to point out that lack of introspection in corporate
America prevents leaders from learning from their own mistakes. After almost 30 years in
the management consulting business, I concur. I have witnessed four critical leadership
errors that occur with alarming regularity in organisations of all sizes, market segments, and
geographies.

These four failures of leaders are: lack of vision, poor communication, tolerance for
organisational fragmentation and character flaws.

Lack of Vision

In dark times such as these, vision is at a premium. Without a clear personal and
organisational vision, we live in a reactionary world. We grab what we can to serve our
immediate needs, and are driven by agendas that are not our own. A lack of vision leaves
us in the dark, unable to navigate the complexities of the world. We’re incapable of seeing
the pitfalls and the opportunities emerging around us.

The need for vision has never been greater. Warren Bennis, management professor and
author suggests that we are at a tipping point:

“Around the globe humanity currently faces three extraordinary threats: the threat of
annihilation as a result of nuclear accident or war; the threat of a worldwide plague or
ecological catastrophe; and a deepening leadership crisis in most of our institutions.”

Professor Bennis’ dark prophecy is happening right in front of our eyes. Whole industries
are failing, unemployment is spiking to levels not seen since the Great Depression, and
capital markets are in turmoil. Banks and financial institutions are requiring unprecedented
measures to stave off bankruptcy. Governments are abandoning policies of market self-
regulation and are aggressively investing in public corporations. Political strife around the
globe endangers national security and the threat of terrorist attacks and global pandemic
continues to challenge public health and safety.

Lack of vision has undermined our ability to foresee the calamities that we must now face
and overcome. How do we overcome the destructive patterns in our leadership behaviors
that sabotage us consistently?

The sheer velocity of the modern world, coupled with the tyranny of quarterly returns has
led to a decline in the importance placed on vision. Prior to the market crash, “the vision
thing,” a term coined by George Bush Sr., was dismissed as fluff in some management
circles.

The Bull market brought with it an arrogant dismissal of this leadership imperative. Now,
the Bear market is dominated by apocalyptic visions from analysts who recognize that doom
and gloom spells media profile.

Vision is the product of reflection. It requires that we slow down and look at what matters
most, at what’s worth doing, at what must be accomplished beyond our reactive impulses.
Without reflection we become lost and disconnected from our dreams, aspirations and
ethical code.

Again, Professor Henry Minztberg provides a forthright assessment of the problem and its
implications for leaders:

“In this, we have America’s problem in a nutshell: the utter absence of collective
introspection, whether it be the current crisis, the relationship between the Vietnam and
Iraq debacles, even what might have contributed to 9/11, as well as the way it has been
compensating and educating corporate “leaders.”

Without reflection, there is no way to determine whether we are being driven by our values
and principles over personal gain. Leaders fail to harness insight, or learning from the past,
and foresight, application of these lessons to the future. As well, leaders miss the
opportunity to examine the impact of their choices in advance of making them.

If leaders had taken the time for reflection, one wonders if the auto makers would have
chosen to drive to Congressional hearings, rather than fly in their private jets? Would
financiers have forgone inflated bonus payouts and office renovations paid for by bail-out
dollars? Would the financial system have recognized and avoided the dangers of sub-prime
mortgages?

Poor Communication
“If I wanted to have to talk to people all day, I would have gone into HR,” a CEO said to
me shortly before being fired by the Board. There it is in a nutshell! The second failure of
leaders is poor communication.

One of the chief responsibilities of leadership is articulation. Articulation means literally

“to join together.” That’s precisely what good communication achieves – a bridge from the
present to the future that all stakeholders can understand and cross together.

In challenging times, people need to know that there is a clear destination that they are
heading towards. Imagine being on an ocean voyage with a captain who fails to identify
where the boat is headed, the length of time it will take to get there, what’s needed for
success along the way, the conditions that are challenging the voyage and who also refuses
to make progress reports regularly? These are perfect conditions for a mutiny.

Strategy is an ongoing conversation about what matters most. Leaders must lead that
conversation to ensure that the organisation’s preferred future is delivered in the most
effective and efficient means possible. Leaders and teams must be in constant
communication before, during and after major phases of a strategic advance towards
organisational goals. Failure to do so increases the risk of confusion, conflict and other
productivity breakdowns.

Poor leaders see communication as the HR department’s job. They refuse to recognize that
the campaign for the future is won by those that build a bridge of common understanding,
shared goals and effective teamwork. That’s the leader’s job.

Tolerance For Organisational Fragmentation

The third failure of leaders is tolerance for organisational fragmentation. Fragmentation is

a state of organisational disintegration where cohesion, collaboration and communication
breaks down. This leads to organisational systems failures that undermine enterprise. An
organisation that is allowed to disintegrate through power politics, turf wars, and unresolved
internal conflict is ripe for a fall.

Many years ago, I had the experience of being asked to meet with the head of a
pharmaceutical firm that I had been working with for some time. The Vice-President of
Sales had engaged me to help him bring his team together. He was so pleased with the result
that he suggested I meet with his boss, the President, to intervene in a nasty dynamic
between the Sales and Marketing groups, one that had grown increasingly toxic over many
years.

The President looked like he had come from Central Casting. He was every inch the suave,
sophisticated business executive that you would expect to see in a Hollywood movie. The
meeting started cordially, with the President enthusiastic about his subordinate’s idea. But
shortly after the meeting started, the Vice-President was called away to take a phone call.
That’s when the President turned icy.
“I don’t want you resolving any conflicts between Sales and Marketing,” he said. “I like
things exactly the way they are. It makes the two groups work harder to show each other
up.” With that, he laughed coldly and ended the meeting. A year later, he was gone, reviled
by his staff and fired for poor performance.

Unfortunately, there is a belief that toxic organisations are the norm. This is a dangerous
notion. It conditions leaders to accept abnormal organisational behavior rather than work
hard to eliminate it. That’s what leaders are paid to do - develop organisational cultures
where people like to come to work because they can do their best work.

Character Flaws

The economic calamity could have been prevented with a simple navigational device. It’s
called a moral compass. Every leader needs one. Money, sex and power are the three opiates
of success. They are constant temptations that visit smart, talented and charismatic people.

Leaders require strength of character to resist the temptations of worldly success, which
seek to seduce us into believing that the rules were made for other people and that we are
entitled to bend them. Of course, these transgressions usually end badly. Consider recent
developments: John Edwards and Eliott Spitzer leaving politics in disgrace. Bernie Madoff
awaiting trial.Conrad Black in prison. Abu Ghraib. Fannie Mae and Freddie Mac. Manny
Ramirez, Roger Clemens, Jason Giambi, Mark McGuire and Barry Bonds disgraced by
performance-enhancing drug scandals. Teachers and clergy charged with sexual
misconduct. The list goes on.

Character is fundamental to the humane and ethical approach to conduct. It allows us to

adhere to a code of ethics, values and principles even when others are unable or unwilling
to abide by such standards. Greed, peer pressure, opportunism and hubris eventually lead to
breakdown.

The word “character” comes to us from a Greek word, meaning “a distinctive mark.” The
character we were born with and the character we derive from life’s experience guides our
behavior and reveals our integrity.

Franklin Delano Roosevelt provides an important reminder of why a moral compass is a

requirement for leaders, especially those in the highest offices:

“The presidency is not merely an administrative office. That's the least of it. It is more than
an engineering job, efficient or inefficient. It is predominantly a place of moral leadership.
All our great presidents were leaders of thought at times when certain historic ideas in the
life of the nation had to be clarified. In other words, they were possessed by their visions.”

This is a good touchstone for leaders in all organisations. We must remember that we are
moral leaders as well as managers and administrators. Being possessed by a vision is a far
happier destiny than being incarcerated by the police.