Video Transcript: Mission, Vision, Values
When we talk about the future, strategy becomes a dynamic concept which allows top managers to define goals and objectives for the future and outline how these goals and objectives will be achieved. A great way to formalize a company's purposes, goals and values is to have formal mission and vision statements, both are related to the main reason a company exists, and helps stakeholders understand and keep that reason in mind. Okay, so the mission statement addresses the question, Why do we exist, or what is the fundamental reason for our organization's existence? And the vision statement describes the desired future position of the company and answers the questions, what do we want to achieve in the future and who do we want to become? When trying to define the vision statement, we should include specific goals and objectives. Goals help companies define what they want to achieve, while objectives are the specific actions and measures for attaining these goals. By setting goals, managers commit themselves to a concrete course of action that would allow them to accomplish the company's vision. Goals can target different areas, like growth, profitability, retention, efficiency or customer service. Usually, goals are expressed as a percentage when considering financials, a company's goal could be to increase revenue and decrease overheads, which is stated in the following way, increase revenue by 10% and decrease overheads by 5% in 2017 an example of an objective that will help you achieve a 10% increase of sales is acquiring five new customers every month. Reducing overheads can be achieved by finding new and less expensive office premises or maybe outsourcing activities. Both are specific objectives that might allow a firm to reduce its overhead by 5% another important question companies should answer is, how are we going to behave and what do we believe in. Maximizing profit is important, but it is also important to uphold certain values and principles. This is why most organizations have a set of values they stay behind. The role of this statement is to define the firm's values and place constraints on how the organization pursues its goals. This can be important for the talented individuals being recruited by the company, usually, they are not only interested in large compensation packages, but also want to work for an employer that is socially responsible and believes in integrity and business ethics, right? Obviously, it is not hard to find a firm's mission, vision and values. All stakeholders can access these statements easily. Just open a company's website and click around, you can locate them in no time. All right, it's time for a few practical examples. Let's look at the way some large corporations have stated their mission, vision and value statements. Some firms are very specific when defining their mission statements, and clearly express why the firm exists and what kind of services it offers to build the web's most convenient, secure, cost effective payment solution, PayPal to accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible. Tesla, these are the missions of PayPal and Tesla. Both companies have a mission
statement that is laser focused. A statement that isn't ambiguous is to the point and indicates the company's main purpose. But that's not always the case. The mission statements of other companies show the business strategy their organization follows. The two examples you see here show that Walmart and IKEA follow a cost leadership business strategy. We save people money so they can live better. Walmart at IKEA, our vision is to create a better everyday life for the many people. Our business idea supports this vision by offering a wide range of well designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them. There is a third type of mission statement as well that is polar to what we've seen so far. Some companies are too vague in their mission statements and do not present the market scope of the business to be a company that inspires and fulfills your curiosity. Sony, it is our mission to continue to authoritatively provide access to diverse services to stay relevant in tomorrow's world. Guess, not very clear, right? The same reasoning applies to selecting the vision statement. It needs to express what the company wants to achieve. The best vision statements are concise, clear and inspirational. Here are examples of clear and memorable vision statements to provide access to the world's information in one click, Google to create economic opportunity for every member of the global workforce. LinkedIn. And here's an example of a vision state. Moment that is too general and hard to remember, our vision serves as the framework for our roadmap and guides every aspect of our business by describing what we need to accomplish in order to continue achieving sustainable quality growth. Coca Cola, okay, that covers mission and vision statements. Now values. Let's look at the values of Facebook. These are the guiding principles for the company's employees. The company values are impactful, dynamic, bold, open and socially responsible behavior. These are the five values that Facebook and its employees should stand for. Defining these principles helps the company communicate to its employees, what the organization stands behind and how it intends to do business. It is interesting to see how different companies understand the world, how they want to behave in it, and what they want to achieve. This is what we can learn by reading a firm's mission, vision and value statements.