Becoming an effective leader
2.1 - Review own ability to set direction and communicate this to others
Vision and Mission Statements
Vision and Mission statements are the inspiring words chosen by successful leaders to clearly and concisely convey the strategic direction of the organisation, communicating the intentions of the organisation to its stakeholders.
Both types of statement are slightly different in their intent, although both typically convey the direction of the organisation. Vision Statements define the organisation’s purpose, reflecting the values of the organisation rather than bottom line measures of success. For employees, it gives direction about how they are expected to behave and inspires them to give their best. Shared with customers, it shapes customers' understanding of why they should work with the organisation.
For example, look at the Vision Statement of the largest fast-food company in the World, MacDonald’s:
‘McDonald's vision is to be the world's best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile’
A Mission Statement typically defines the organisation's purpose and primary objectives. Its prime function is internal – to define the key measure or measures of the organisation's success – and its prime audience is the leadership team and stockholders. The mission statement therefore focuses on what constitutes success for the business. For example, consider the Mission Statement for The Walt Disney Company:
‘The Walt Disney Company's objective is to be one of the world's leading producers and providers of entertainment and information, using its portfolio of brands to differentiate its content, services and consumer products. The company's primary financial goals are to maximize earnings and cash flow, and to allocate capital profitability toward growth initiatives that will drive long-term shareholder value.’
Organisational Goals and Objectives – Strategic Plans
Once a vision and mission has been formulated it is usual to have a set of organisational goals, which are the medium for setting out the ‘big picture’ of what the organisation is seeking to achieve. A goal describes a high-level target that an organisation seeks to achieve over the long-term (3-5 years). Whilst goals are usually quite difficult to measure and quantify, they set the direction of the organisation and support the mission statement. Objectives are more specific statements that describe what the organisation wants to accomplish in the short-term (up to 12 months). The successful completion of short-term objectives should contribute to the achievement of long-term goals. Objectives should be SMART: specific, measurable, achievable, realistic, and time bound. Well-constructed objectives should incorporate their own key performance indicators.
The significance of the measures chosen cannot be overstated – without measures it would be very difficult if not impossible to manage the implementation of the objectives. Usually, the Vision, the Mission, the Organisational Goals and the Organisational Objectives would be set out in the Strategic Plan. The strategic plan would permeate through the organisation in the form of action plans that serve to define how the objectives will be achieved. This whole process should ensure that the organisation itself has clear definition around what it is looking to achieve and that every person in the organisation understands his or her role within it.
The middle management function would usually be to ensure the delivery and implementation of strategic goals and objectives, as set out by senior managers, through development and management of action plans, and subsequent implementation. Where organisations operate without having an effective strategic plan they tend to ‘drift’ and become inefficient and ineffective. Ultimately they will be very unlikely to achieve competitive advantage without one.