Vision and Mission-lecture 1(Latest)

STRATEGIC MANAGEMENT – MBA, GSB-UKM

Prof. Datuk Dr. John Antony XavierFEB 2014

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Student-based Learning

I see and I forget, I hear and I remember, I do and I understand

Confucius

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Learning Outcomes Understanding of the role of strategic

management in organisational performance Become a strategic planner who is able to

draft a strategic plan

Economic Clients/Social CustomersPolitical Competitive/Technological Collaborative forces

Resources Present strategyCapabilities PerformanceTechnology Top Management

AssessOrganization’sCurrent and FutureSituation

Develop Vision & Mission

Set Objective

Craft Strategies

Implement Strategies

Evaluate Performance

REVISE AND CHANGE AS NEEDED

REVISE AND CHANGE AS NEEDED

EXTERNAL ENVIRONMENT

INTERNAL ENVIRONMENT

PROCESS OF STRATEGIC PLANNING : THE BIG PICTURE

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STRATEGIC ANALYSIS

STRATEGIC CHOICE

The external environment

Strategic Direction

Internal Environment

STRATEGIC IMPLEMENTATION

Generation of options

Selection of strategy

Evaluation of options

People and systems

Organization structure

Resource planning

A SUMMARY MODEL OF THE ELEMENTS OF STRATEGIC MANAGEMENT

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Why do Co.’s require strategic plans? Rapid and discontinous changes in the

enviroment Increased competition across nations, cities,

regions, organisations Environmental changes are radical not

incremental Role of government is changing Citizens and societies are becoming smarter Key events in one country influence many others Increasingly urban population. By 2020 about 60% of

society will be urban Globalisation – national boundaries – less meaningful Importance of knowledge, skills and education

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Why do organisations need strategic plans?

Increasing stakeholder demands Resource constraints Complexity in organisations

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These forces have required organisations to: Think strategically

◦ Have a vision and mission for the organisation Develop effective strategies to deal with

them ◦ Formulate strategies

Properly implement the strategies◦ Implement strategies

Periodically evaluate outcomes and take action◦ Evaluation and control

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These forces have required organisations to: Think strategically

◦ Have a vision and mission for the organisation Develop effective strategies to deal with

them ◦ Formulate strategies

Properly implement the strategies◦ Implement strategies

Periodically evaluate outcomes and take action◦ Evaluation and control

(C) Datuk Dr. John Xavier 10

VISION, MISSION, OBJECTIVES AND

STRATEGYProf. Datuk Dr. John Antony Xavier

UKM-GSBFEB 2014


Yang

Yin

Core Ideology (mission)• Core Values• Core Purpose

Envisioned Future (Vision)• 10 to 30 year BHAG (Big, Hairy, Audacious, Goal)• Vivid description

Articulating a Strategic Direction/Envisaged Future

UKM-GSB

BHAG – Envisaged Future

1 Mission/ Core ideology – Purpose

2 Values3

FUTURE

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VISSION AND MISSION

Prof. Datuk Dr. John Xavier


A description of what the organisation is capable of becoming or would like to become in 10-30 years – What do we want to become?

Paradox – One hand: concrete (visible, vivid, real); On the other – future (dreams, hopes, aspirations

Martin Luther King – ‘I have a dream’ – not a business plan!

BHAG (BEE Hag)– quantitative or qualitative True BHAG

◦ clear, highly focused, compelling ◦ acts as a catalyst for and energises team spirit ◦ has a clear finish line◦ People get it rightaway (Kennedy – man in moon)

Vision – Envisioned Future


Setting BHAG far into the future requires thinking beyond current capabilities and enviroment

BHAG◦ is visionary and not strategic or tactical ◦ is a creative process

BHAG – Not a sure bet – only 50-70% chance of success – but the Co. must believe that it can reach it

BHAG – requires extraordinary effort and a little luck

Vision


Vivid – translate words into pictures (man on moon, computers in every home, proton in every household; Ford – build a car so low in price no man making a good salary will be unable to own one)

Vivid – passion, emotion and conviction

I think there is a world market for may be five computers

Thomas Watson, Chairman, IBM 1943

Vision


Ask “We are sitting here in 20 years; what would we love to see? What should the Co. look like? What should it feel to employees? What should it have achieved?

If someone is writing a article in a major magazine in 20 years what will they say of the Co.?

Does the vision get our juices flowing? Do we find it stimulating? Does it spur forward momentum?

Does it get people going?

Vision – How to set it?


Requires unreasonable confidence and commitment

Remember! BHAG is not a goal! GE – Become #1 or #2 in every market Honda (1970s) – Yamaha wo tsubusu! Nike (1960s) – Crush Adidas Stanford University (1940s)– Become the

Harvard of the West Visionary company – 1% inspiration, 99%

alignment

Vision – How to set it?


MAYBANK : To be a regional financial services leader

L’OREAL: The right to be beautiful day after day

STARBUCKS: To be one of the most respected brands in the world

NESTLE: To be the recognised leader in nutrition, health and wellness

Apple: To make a contribution to the world by making tools for the mind that advance mankind

Vision


DIGIOur vision is to be a company that is always “Changing the Game”. We do this by constantly pushing the boundaries, defining new standards and ensuring continuous improvements in all parts of the business

Vision


concise, clear, future orientation, stable, abstract, desirable, simple, understandable, challenging, easy to communicate (11-22 words) and remember

Vision must be:

Vision without action is merely a dream. Action without vision

merely passes the time. Vision with action can change the

worldJoel Barker – Futurist, Author, Lecturer


Study by Business Week firms that develop a mission statement have 30% higher return than those without

Peter Drucker: “That business purpose and business mission are so rarely given adequate thought that it is perhaps the most single cause of business frustration and failure.”

MISSION

What is our business?◦ Define the basic reason of existence

An essential building block of the strategic

management process◦ A business is not defined by its name, statutes or

article of incorporation

◦ Only a clear definition of the mission and purpose help the organization to achieve clear and realistic business objectives (Drucker, 1973)

CONCEPT OF MISSION STATEMENT


Reason for being Idealistic motivations for doing the Co.’s work –clear

focus that directs people’s attention and energies to live out the purpose and provide them a sense of self-worth

Helps in making strategic resource allocation decisions to realise their customer value proposition

Captures the soul of the organisation Purpose – should last for at least 100 years (vs specific

goals – objectives - and strategies) Can achieve objectives and strategies but you cannot

fulfill mission – a guiding star Mission does not change – it inspires change

Core Purpose - Mission


3M: To solve unsolved problems innovatively Hewlett Packard: To make technical contributions to

the advancement and welfare of the community McKinsey&Co.: To help leading corporations and

governments be more successful Nike: To experience the emotion of competition,

winning and crushing competitors Disney: To make people happy Starbucks: To establish Starbucks as a premier

purveyor of the finest coffee in the world while maintaining our uncompromising principles as we grow (Old) New – To inspire and nurture the human spirit – one person, one cup, and neighbourhood at a time

Core purpose is a company’s reason for being

CONCEPT OF MISSION STATEMENT

Purpose

• To satisfy shareholders and stakeholders

Strategy

• A definition of what business we are in?

• Position strategy

• Strategic competitive advantage

Behaviour

• The behavioral standards required to convert purpose and strategy into action

Value

• The beliefs and moral principles of the organization, culture & philosophy

The 4 elements must reinforce each other

Source: The Ashridge Model, Campbell and Yeung (1991)


Core ideology – guidance and inspiration; glue

Values – guiding principles and tenets Mission – Why we exist – core purpose –fixed;

only strategies and practices change◦ Yin – does not change – complements the Yang◦ Yang – the envisioned future – changes

It is more important to know who you are (core ideology) then where you are going (vision) because vision changes as the environment changes

Core Ideology – mission & values


The 5 Whys Random Corporate Serial Killer game Ask the Mars Group:

◦ Mars Group (6 -7) Gut-level understanding of organisation Highest level of credibility with peers Highest level of competence

◦ If tomorrow they can retire as multi-millionaires would they still work for the organisation?

Ask stakeholders and clients Check the founding legislation

How to discover mission?

Concern for survival, growth and profitabilityIs the Co. committed to growth and financial soundness?

TechnologyIs the Co. technologically current?

MarketsWhere does the Co. compete?

Products/ ServicesWhat are the Co.’s major products / services?

CustomerWho are the Co.’s customers?

Components of a Mission Statement

Components of a Mission Statement

Concern for employeesAre the employees considered a valuable asset?

Concern for public imageIs the Co. responsive to social, community and environmental concerns?

Self- conceptWhat is the Co.’s distinctive competence or major competitive advantage

PhilosophyWhat are the Co.’s basic beliefs, values, aspirations, and ethical priorities?


At L’ORÉAL, we believe that everyone aspires to beauty. Our mission is to help men and women around the world realise that aspiration, and express their individual personalities to the full. This is what gives meaning and value to our business, and to the working lives of our employees. We are proud of our work

Mission statement of L’OREAL


Timeless guiding principles; intrinsic value – require no external justification – almost religious tenet – hold on to it even if it is a competitive disadvantage◦ E.g. Disney – imagination; wholesomeness◦ Norstrom – service to the customer; ◦ HP – respect for the individual◦ F&N – integrity, professionalism, customer

centricity and passion for business

Core Values


◦ E.g. Disney – imagination; wholesomeness; no cynicism Disney has evolved from making short animated films, to feature length films, to theme parks, to cruises, but their mission of providing happiness to young and old, and not succumbing to cynicism remains strong.

Discover your core values and purpose beyond simply making money

◦ Starbucks: great work environment by treating each other with respect and dignity; embrace diversity as an essential component of the way we do business; apply the highest standards of excellence to purchasing, roasting and fresh

delivery of our coffee; customer satisfaction all the time; contribute positively to our communities and our environment; recognise profitability is essential to our future success

Core values – 3 - 5

Core Values


Be honest as to what values are truly central

Values must stand the test of time Who should identify core values?

◦ Mars Group (6 -7) Gut-level understanding of organisation Highest level of credibility with peers Highest level of competence

How to identify core values?


◦ What core values do you personally bring to work◦ What will you tell your children are the values at

the workplace and those they should hold when they grow up

◦ If you woke up tomorrow a multi-millionaire and can retire what values will you continue to hold

◦ Will these values be valid a 100 years◦ If you start a co. what values would you build into

it

How to identify core values?


Norstrom -Service to the customer above all else-Hard work and individual productivity-Never being satisfied-Excellence in reputation

Sony -Elevation of Japanese culture and national status-Being a pioneer – not following others, doing the impossible-Encouraging individual ability and creativity

Walt Disney-No cynicism-Nurturing and promulgating wholesome American values-Creativity, dreams and imagination-Fanatical attention to consistency and detail-Preservation and control of the Disney magic

Core Values are a Co’s. Essential Tenets


Public Bank – To be ranked among the top 100 banks of the world

Guiness Anchor Bhd – GAB is an icon business. Respected the world over for delivering exceptional growth in people, brand and performance

PETRONAS – To be a leading oil and gas multinational company of choice

What do you think of the following visions? Can you propose a better alternative?


We did not find an explicit and formal statement of purpose in all of our visionary companies

Collins and Porras (1997)

Reality


Organisational culture is typically missing from the standard mission statement which is why the statement alone is ineffectual. The ultimate value of the vision as a management tool is undermined if the vision is nothing more than a statement of purpose and a strategy for getting there. Purpose and strategy do not have the power to enhance performance unless they can be converted into action, policy and job-related behavioural guidelines

Lipton, 1996

Mission statement alone is ineffectual!


Incomplete mission statement is better than no mission

More important is the process of developing a mission

Genuine mission statement is a product of both deep understanding of the organisational and environmental reality and deep insight

Authentic vs Fabricated


Mission UKM is the National university that safeguards the sovereignty of the Malay language while globalizing knowledge in the context of local culture. The Vision UKM is committed to be a leading university that pioneers innovation in the construction of knowledge to achieve the aspiration of producing a society imbued with dynamic, learned and civic leadership.

Mission and vision of UKM


Maybank’s mission is to humanise financial service across Asia by: Providing the people with convenient access

to financing Having fair terms and pricing Advising customers based on their needs Being at the heart of the community

Mission of Maybank


Hai-0We are committed to promoting healthcare

culture and improving human’s well-beingDigiWe deliver ‘Internet for All’ as part of our

commitment to building a connected Malaysia – enabling access to mobile internet services and applications by offering customers the right combination of devices and value pricing, as well as the best usage experience

Mission

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Why

HowWhat

(C) Datuk Dr. John Xavier

Start with Why, How and then What?

People don’t buy what you do. They buy why you do it, and what you do serves as the proof of what you believeSimon Sinek

Sinek’s Golden Circle Model

Outside-in Model –

Conventiaonl Model

Inside-out Model – Starts

with ‘Why’


Google – Let’s organise the world’s information

Mozila – Let’s kill Microsoft AirAsia – Everyone can fly Walmart – Everyday low prices Wikipedia – Let’s all contribute knowledge

and create a true repository of global information

Amazon.com – We seek to offer Earth’s Biggest Selection and to be Earth’s Most Customer-Centric company

Start with Why? It gives you direction


Apple started as a computer co. Its Why gave it a sense of direction; wanted to make a dent on the universe

When Apple came up with its Mac, IBM was spending 100 times more in R&D. But it was ‘why’ that made the day

Everything we do we do differently. Made it to challenge the status quo

Martin Luther King – ‘I have a dream’ – not a business plan!

Start with the Why?


MAYBANKTo be a regional financial services leader Hai-OWe aim to become the premier healthcare

company in Malaysia and thereby bringing the greatest value and pride to our customers, business partners, employees and shareholders

Visions- Alternatives?


Public BankTo sustain the position of being the most efficient, profitable

and respected premier financial institution in Malaysia GAB

1. We have a passion for winning 2. We value and respect each other3. We show integrity in all that we do4. We provide enjoyment

PETRONAS ◦ We are a business entity◦ Petroleum is our core business◦ Our primary responsibility is to develop and add value to this

national resource◦ Our objective is to contribute to the well-being of the people and

the nation

What do you think of the following missions? Can you propose a better alternative?

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"Vision without action is a daydream. Action without vision is a nightmare.” __Japanese proverb

If your future looks bright, make sure your team knows about it.

Tell the story of how you achieved all this, thank the people who helped you get there!

“Well, I don’t know what will happen now.

We’ve got some difficult days ahead.

But it doesn’t matter with me now.

Because I’ve been to the mountaintop…

Like anybody, I would like to live a long

life. Longevity has its place. But I’m not

concerned about that now. I just want to

do God’s will. And He’s allowed me to go

up to the mountain. And I’ve looked over.

And I’ve seen the promised land. I may

not get there with you. But I want you to

know tonight, that we, as a people, will

get to the promised land.”

___Martin Luther

King Jr.

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“My Personal Mission And Vision”To laugh often and much;To win the respect of intelligent peopleAnd the affection of children, To leave the world a better place than what I've found,

To know even one life has breathed easierBecause I have lived,

This is to have succeeded

_Ralph Waldo Emerson


What must we do to achieve our vision and be true to our mission?

What specifically must we achieve: performance goals: ouputs, impact and benefit for clients and organisation

What objectives can formulate based on our strategic issues

Objectives


Begin with the word “to” followed by an action verb

State a single key outcome Be S.M.A.R.T State ‘what’ and ‘when’ but not ‘why’ and

‘how’ Be simple and understandable It is something that everyone can agree to

How to Draft Objectives


What is Strategy?


Sun Tzu’ strategies 2000 years ago1. When the enemy advances, we retreat!2. When the enemy halts, we harass!3. When the enemy seeks to avoid battle, we

attack!4. When the enemy retreats, we pursue!

What is Strategy?


Means to achieve ends (outcomes) Build on strengths; take advantage of

opportunities Guide how to handle threats and minimise

weaknesses Strategies can be both intended and

emergent Strategies can be proactive or reactive

Strategy


SUITABILITY:◦ Does it exploit organisational strengths and

opportunities?◦ Does it overcome weaknesses and threats?◦ Does it match objectives and values?

FEASIBILITY:◦ Can the strategy be funded?◦ Can the organisation perform to the required level?

ADEQUACY AND ACCEPTABILITY:◦ Is it the best of all the alternatives?◦ Will the strategy achieve the objectives?◦ Will the strategy be acceptable to all stakeholders?

Evaluating and Selecting Strategies


Action plans provide concrete information regarding: What is to be done When it is to be done Who is responsible How specific outcomes are to be measured What resources are needed What assumptions are made in planning the

actions

Action Planning to Achieve Outcomes


KRA

Outcome

Strategy:

Strategic Initiatives

(programmes and activities)

Unit/ Person responsible

Time-line KPI + Targets

Action Plan

Vision and Mission-lecture 1(Latest)

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