A short, action-oriented explanation of what mission, vision, core values, and strategic priorities are. The way to use them to improve strategic planning and execution.
There are different levels of abstraction for strategic planning:
- Level 1. Mission, Vision, Core Values
- Level 2. Strategic Priorities or Themes
- Level 3. Business Goals (Objectives, Strategy Maps)
- Level 4. KPIs (Leading and Lagging Metrics)
- Level 5. Action Plans
This time, our focus will be mostly on the Levels 1 and 2.
Level 1. Mission, Vision, Core Values
In strategic planning, the level of highest abstraction is one where we discuss the mission, vision, and values.
Organizations create mission/vision statements for two main reasons:
- A formal one: follow the common trend and have something to show to investors;
- A practical one: use them as building blocks of corporate culture and focus the team’s efforts.
Agree about the Terms: The Difference Between Mission and Vision
The terms “mission” and “vision” are used interchangeably. Some authors say that “mission” is the purpose of the organization; others use the same explanation for the “vision” term. Some resolve this ambiguity by using just one term.
In this context, my main recommendation is simple:
Agree about the terms in your organization
Below, I explain an approach that we use at BSC Designer, which has worked for many of our clients due to its simplicity (see the diagram in the beginning).
Mission/Purpose: The Most Important Goal of the Organization
On the strategy map, we have some strategic goals.
Mission is a goal of the highest level of abstraction, a context for all today’s goals and actions.
BSC Designer Mission
- Making strategies easier to execute by providing agile Balanced Scorecard software, high-valued content, and excellent customer experience.
Setting Mission in BSC Designer Software
Users of BSC Designer can specify their mission/vision directly in the software.
- Open any scorecard
- Go to the KPIs tab and select root element
- Click on the “Edit” button next to the Mission field
- Fill in details
Now, when you switch to the strategy map, the mission will appear at the top.
Example of Good/Bad Mission
An excellent example of a good/bad mission statement might be the Apple company.
- Back in 1980, Apple’s mission was based on the inspirational rhetoric of Steve Jobs. He used such phrases as “digital media revolution” and “a contribution to the world.”
- Now, Apple’s mission statement does not seem to be formulated at all. You can follow the story in the article by Henry Blodget published on Business Insider.
A good mission statement inspires your team. Bad mission statements are generic, boring and don’t provide any guidance. Find more thoughts on the topic in the LinkedIn post by Bernard Marr.
Vision: The Way An Organization Sees the Future
With mission, we achieved the highest level of abstraction talking about the company’s goals. Now we are changing the planning horizon from today to the future.
Vision describes the future as seen by the organization.
BSC Designer Vision
- Provide organizations worldwide with an effective tool to explain their strategy to the employees and track execution.
Can Mission and Vision Change?
Many strategy consultants insist that they should not, but I cannot agree with this. Our personal values and goals evolve over time, so why should organizations be different?
A good example is how the brand promise of Zappos changed over the years. The company’s CEO, Tony Hsieh talks about that in his book:
- 1999 – Largest Selection of Shoes
- 2003 – Customer Service
- 2007 – Personal Emotional Connection
- 2009 – Delivering Happiness
Could Zappos or any other company start with such brand promise like “delivering happiness”? I don’t think so…
- In 1999, Zappos needed something more tangible, like “provide largest selection of shoes,” that was a good function-oriented mission.
Zappos implemented a focus on the client in their business DNA and by 2009, “Delivering Happiness” was the best explanation of their brand promise or mission.
How the purpose of the company is formulated now?
- To live and deliver WOW
Core Values: Guiding Principles of the Organization
Core values are the backbone of any organization.
Core values are the principles by which an organization works
Whatever an organization does, it is supposed to be aligned with its values. Let’s talk about what these values are and how to implement them properly.
Examples of Core Values
Similar to the typical business goals, core values also follow certain patterns:
- Customer-related values
- Team-related values
- Product-related values
- Leadership values
- Sustainability and growth values
- Personal values and qualities
Let’s look at some examples grouped into these categories.
- Exceed expectations
- Wow customers
- Friendly service
- Care for others
- Client Satisfaction
- Be the customer of your product
- Sharing (skills, experience, knowledge)
- Diversity, Inclusion, Equity
- Learning from mistakes
- Celebrating success, Having fun
- Quality (see the quality scorecard)
- Excellence in Design
Leadership and Management Values
- Lead by example
- Entrepreneurial spirit
- Safety (see the safety KPIs)
Sustainability Values (based on 3 pillars of sustainability)
- Social responsibility
- Economic sustainability
- Environmental sustainability
- Curiosity, Creativity
- Continuous Improvement
- Open Mindedness, Questioning Old, Risk-Taking
- Innovations (see the innovations scorecard)
Declared Values vs. Followed Values
How often we see companies that declared they are:
- Innovative, sustainable, accountable, and transparent,
- They show exactly the opposite behavior.
In this case, an organization basically tells its employees that “values are just a formality!”
- To improve the company’s performance, it’s not enough to compile a list of values. The values should be followed.
Companies where employees perceive that top managers follow the declared values show stronger performance.
What does it mean to follow values?
- You should hire by values
- Plan and execute with your values in mind
- Reward following your values
Test Your Mission, Vision, and Values in Challenging Situations
Have you ever seen a company that has “being customer-centric” among their values, but actually don’t respond to client’s emails within one week?
- Values that are not aligned with actions do more harm than good.
If you found a significant difference between your values and your actions, you can either update your values to more realistic ones or adjust your behaviour patterns according to the values.
In calm waters, most corporate values seem to work. Test your values in the crisis time!
BSC Designer Values
- Wow customers. Respond fast, share knowledge.
- Be proactive. Focus on product quality, simplify complexities.
- Adaptability. Support remote work, hire talents globally.
- Expertise. Be experts in the strategy execution domain, not just in the software.
Level 2. Strategic Priorities or Strategic Themes
We discussed overall goals and principles on level 1. We can now move to the next level of abstraction.
Among all possible factors of successful mission achievement, we need to pick a few that will be our priorities.
The two popular terms to describe this choice are:
- Strategic priorities
- Strategic themes
What are these themes?
It depends on the context. If we are defining an overall strategy of the organization, then they can be:
- Product excellence
- Customer service
- Excellence in operations
If, for example, we are in the product team and focusing our development efforts, then these themes might change to more specific ones:
- Perceived product quality
- Customer onboarding experience
- Easiness to maintain
These themes will be the pillars of the strategy.
Different authors approach strategic themes in their own way. For example, in the Balanced Scorecard by Kaplan and Norton, these themes are:
- Product Leadership Strategy (building the franchise)
- Customer Intimacy Strategy (increasing customer value)
- Operational Excellence Strategy (achieving operational excellence)
Another approach, Porter’s generic strategies sound similar:
- Differentiation (creating unique product and service)
- Focus (specialized service in a certain niche)
- Cost leadership (achieving lower costs, for example, by focusing on operational excellence)
Focus on One of the Strategic Themes
While we have several top priorities, the idea is to achieve excellence in one of these themes, to make it a core competence. The other themes should be executed on a good level.
- McDonald’s company is good in customer service, but their focus is on effective operations
- Alcoa is good in operations, but their focus is on workers’ safety
- Zappos sells good products, but their main focus is on customer experience
The Problem of an Excessive Focus
The idea of focus has its disadvantages. Companies stop seeing new opportunities, and they might think that focus is everything. It is not. As Richard Rumelt in “Good Strategy. Bad Strategy” said: “It would be nice if focus always meant more profits. But it just isn’t so.”
Look at the “Growth Values” category discussed above. Make sure that your company has an appropriate environment for innovations. Before, we discussed the way organizations can build a scorecard for innovation process.
Strategic Priorities of BSC Designer
- Product leadership. Deliver professional Balanced Scorecard software that is easy to get started, fairly priced, and make the life of the strategist easier.
- Relationship with customers. Quick and effective communication with customers via customer service, expert articles, and educational videos.
- Operational excellence. Optimize business processes with three pillars of sustainability in mind.
For Users of BSC Designer
Users of BSC Designer have strategic themes available in the software:
- Open any scorecard
- Switch to the KPIs tab, select the Context tab below
- Select the strategic theme that matches the business goal
- Click the edit button next to the Strategic theme drop list if you need to customize strategic themes
- Switch to the Strategy map tab. Goals that belong to different strategic themes will be marked by different colors.
Level 3: Business Goals and Objectives
We started with the mission that defined a goal of the highest level of abstraction. Then we discussed the strategic priorities that are on the lower level. What’s next? Business goals!
Business goals are more specific parts of a company’s strategy.
- They formulate a hypothesis about how an organization can achieve desired results
- There is a cause-and-effect logic that can connect them and form a strategy map
In the previous article, we discussed two typical questions about business goals:
- What’s the difference between an operational goal and a strategic one?
- How can the separate goals be converted into the strategy?
Users of BSC Designer can create their goals on the KPIs tab or directly on the Strategy Map tab.
Level 4: Making Goals Tangible with KPIs
We have mission as a highest level of abstraction. Then we have the pillars of our strategy – strategic priorities, then come business goals that are more specific, but still not detailed enough.
How can we make the goals more tangible? Correct, we need to quantify them.
For example, when the goal is “Provide safe environment,” we have different ways to make it more specific by quantifying it. We can look at safety awareness as a leading factor of safe environment or track near miss reporting. We discussed this specific case in the safety KPIs article.
For those who want to master their skills in KPIs, I would recommend starting with these two articles:
If you are looking for more insights, then you will find this book useful:
- 10 Step KPI System Book (available in electronic format and in paper format at Amazon)
Users of BSC Designer can align KPIs with business goals and specify their business context.
Level 5. Initiatives or Action Plans
We moved from a very abstract mission statement to relatively specific goals measurable by the KPIs. The final level of abstraction in strategic planning is execution controlled by the action plans and initiatives.
Here is where we can apply our project management skills, assign budgets, timeline, and have full control over execution.
By the way, the choice of the automation tools will be different in this case. You might want to complement your strategy execution software with a project management tool.
Users of BSC Designer can align initiatives with business goals or KPIs, assign budgets, persons responsible, and timelines.
What’s the Benefit of Having Formal Mission, Values, Priorities?
Do all organizations have their values and mission written down? Not at all! For example, a startup company first builds something useful, tests an idea. When it comes to seeking investments, they start looking for the right words to describe what they have done so far.
Does it mean that they had no values, vision or mission in the beginning? They had them, but those were personal values, a vision of the founder, and mission formulated as a hypothesis (we do that product, and probably people will like it).
Any organization has values and mission behind it, but not all of them have it formally described on the paper.
In my opinion, the formal description of mission, vision, values, and strategic priorities have some important benefits:
- It is a business self-analysis that helps to understand better what is important for you.
- It is a way to articulate the guiding principles of your culture and explain it to others (your team).
- Last but not least, they form your culture that will eventually lead your brand. And as Peter Drucker said: “culture eats strategy for breakfast.”
How it works for BSC Designer
In our case, if someone asks me about BSC Designer and what makes us special, I can answer this question by looking at our values:
- If you want to learn more about strategy execution frameworks, then you will find a lot of ideas on our website as we are not just building the software; we are writing books, participating in industry events, running a coaching program, doing workshops; we are experts in the domain.
- If you want to use our products, you can expect excellent customer service. We give out a lot of materials for free; for example, our ready-to-use Balanced Scorecard templates help business professionals get started easily with their KPIs/strategy tasks.
- If you work with us, then we will make it easy for you as we like hiring talent all over the world. We look at your impact, not your schedule.
Action Plan for Mission, Vision, and Values
Let me summarize the key ideas of the article into this action plan.
- Write down your mission, vision, values, priorities. Make sure they are the product of discussion with your team.
- Understand how they are connected. We were talking about different levels of abstraction, so make sure your goals are aligned with the strategic priorities, and your mission, your KPIs and initiatives are supporting your goals.
- Tell your team about the company’s mission, vision, and values. Have them on your website, your strategy map, look at them during board meetings.
- Compare reality vs. expectations. How do the actions of your team compare to your values and mission? Is there any misalignment? Test under stress conditions. Find improvement points.
- Improve. Map your observation, change the performance patterns of your team.
If you are looking for a more specific plan to prepare your business strategy for execution, I would recommend looking at this article and its infographic.
Feel free to ask your questions and share your feedback in the comments for this article.
- ^ Apple’s ‘Mission Statement’ is Making People Worry That the Company Has Gone to Hell http://www.businessinsider.com/apples-new-mission-statement-2013-8
- ^ Delivering Happiness. A path to profits, passion, and purpose, Tony Hsieh, Business Plus, 2010. Book’s website.
- ^ The Value of Corporate Culture Luigi Guiso, Paola Sapienza, Luigi Zingales NBER Working Paper No. 19557 Issued in October 2013
- ^ The strategy focused organization. How Balanced Scorecard companies thrive in the new business environment. Robert S. Kaplan, David P. Norton, 2001, Harvard Business School Press.
- ^ Porter’s generic strategies, https://en.wikipedia.org/wiki/Porter’s_generic_strategies
- ^ Richard Rumelt “Good Strategy. Bad Strategy. The difference and Why it Matters”, 2012, p. 148, Profile Books LTD