BUS470 Building your Company's Vision Mini-Lecture

Summary

This video discusses the importance of a company's vision and mission statements. It explains that a mission statement sets the business's scope and product-market fit, while a vision statement captures the company's aspirations and strategic direction. The video also mentions that some firms combine these into one or add core values to communicate employee expectations. The success of these statements lies in their clarity and communication of objectives and capabilities. The video references a Harvard Business Review article that breaks down vision into core ideology and an envisioned future, emphasizing the need for a vivid description and the 'five why's' technique to understand the company's purpose.

Takeaways

• 📜 A mission statement sets boundaries for a company's business scope and market, guiding consistent investment decisions.
• 🗣️ Mission statements should be concise, typically no longer than several sentences, to maintain impact.
• 🔍 The strategic plan may include a vision statement that captures the company's aspirations and strategic direction.
• 🎯 Vision statements might focus on market dominance or achieving the lowest cost in the industry.
• 🧩 The distinction between mission and vision is not fixed; some companies combine them or have additional core values.
• 🤝 Core values can communicate expectations about employee behavior and signal the company's conduct style.
• 🌟 A vision consists of core ideology (core values and purpose) and an envisioned future (long-term goals).
• 🚀 Big hairy audacious goals (BHAGs) are long-term, ambitious objectives that can be quantitative or qualitative.
• 🖼️ Translating the vision into vivid descriptions and pictures helps internalize and communicate the company's aspirations.
• 🔄 The 'five why's' technique is used to delve into the fundamental reasons behind a company's existence and industry involvement.
• 🏆 Articulating the 'why' can be a key differentiator, as exemplified by Granite Rock Company winning a significant contract.

Q & A

What is a mission statement and why is it important?

A mission statement is a brief description of a company's scope in terms of its product line and market served. It's important because it sets boundaries for the types of investments consistent with the business and communicates the firm's purpose to various stakeholders.

What is the recommended length for a mission statement?

The mission statement should generally be no longer than several sentences. Longer statements tend to lose their impact.

How does a mission statement differ from a vision statement?

A mission statement defines the scope of the business, while a vision statement captures the firm's aspirations and strategic direction. The vision statement is usually quite short and focuses on the future goals of the company.

Can a company have both a mission and a vision statement?

Yes, some firms have both a mission statement and a vision statement. The mission statement describes the current scope and purpose, while the vision statement outlines the future aspirations and direction.

What is the purpose of having core values within a company?

Core values communicate expectations about employee behavior and signal the style in which the organization will conduct business. They may be included within the mission statement or as a separate section.

What is the difference between core ideology and an envisioned future in a vision statement?

Core ideology contains the core values and the core purpose, which are the enduring features of the organization. The envisioned future includes long-term goals, often referred to as a 'big hairy audacious goal' (BHAG), which can be quantitative or qualitative.

What is the significance of a 'big hairy audacious goal' (BHAG)?

A BHAG is a long-term, ambitious goal that is clear, compelling, and acts as a rallying point for an organization. It serves to focus and drive the company towards significant achievements.

How can a company translate its vision into actionable goals?

A company can translate its vision into actionable goals by setting specific, measurable, achievable, relevant, and time-bound (SMART) objectives that align with the vision and core values.

What is the 'five why's' technique mentioned in the script?

The 'five why's' technique is a method of asking 'why' repeatedly to delve deeper into the reasons behind actions or decisions. It helps a company understand its core purpose and the underlying reasons for its existence.

How did Granite Rock Company use the 'five why's' technique to win a contract?

Granite Rock Company used the 'five why's' technique to articulate their core purpose of improving the quality of manmade structures, which ultimately led to them winning a significant contract by demonstrating their commitment to making people's lives better.

Why is it important for a company to clearly communicate its mission and vision?

Clear communication of mission and vision is important because it helps align stakeholders' expectations, motivates employees, guides strategic planning, and can be a key differentiator in competitive markets.

Outlines

00:00

📜 Introduction to Company Vision and Mission

The paragraph introduces the concept of a company's vision and mission. It explains that a strategic plan should start with a mission statement that outlines the business's scope in terms of product lines and markets served. This mission statement sets boundaries for consistent investments and is typically brief to maintain impact. The paragraph also touches on vision statements, which are short and capture the company's aspirations and strategic direction. It notes that the distinction between mission and vision can vary, with some firms combining them or including core values within the mission statement. The success of these statements depends on their communication of objectives, resources, and capabilities. The paragraph references a Harvard Business Review article that discusses the two parts of a vision: core ideology and an envisioned future, including core values, purpose, and long-term goals (BHAGs). It also mentions the importance of translating the vision into vivid imagery and using the 'five why's' technique to understand the underlying reasons for a company's existence.

Keywords

💡Mission Statement

A mission statement is a short description of what an organization does currently. It defines the company's product line and the market it serves. In the video, the mission statement is described as the starting point of a strategic plan, setting boundaries for the types of investments consistent with the business. It is meant to be concise, typically not exceeding several sentences, to maintain its impact.

💡Vision Statement

A vision statement is a short description of what an organization aspires to be in the future. It captures the firm's strategic direction and aspirations. The video explains that the vision statement is usually quite short and may include market dominance, cost leadership, or other strategic goals. It is distinguished from the mission statement in that it looks forward rather than describing current operations.

💡Scope

Scope, in the context of the video, refers to the boundaries of a business's operations, including the types of products it offers and the markets it serves. The mission statement helps define the scope, which in turn influences the strategic planning and investment decisions of the company.

💡Core Ideology

Core ideology encompasses the fundamental values and purpose that endure and guide an organization. The video mentions that core ideology is part of the vision and includes core values and the core purpose. It is the enduring part of the vision that remains constant over time.

💡Core Values

Core values are the essential and intrinsic beliefs of an organization that guide its actions and decision-making. In the video, core values are part of the core ideology and are used to communicate expectations about employee behavior and the way the organization conducts its business.

💡Core Purpose

The core purpose is the fundamental reason for an organization's existence. It is a part of the core ideology and is described in the video as the reason for being, which is distinct from the specific goals or strategies the organization might pursue.

💡Big Hairy Audacious Goal (BHAG)

A BHAG is a large, ambitious, long-term goal that is clear and easily understood. The video uses Walmart's goal to become a $120 billion company by the year 2000 as an example of a BHAG. It is meant to be a rallying point for the organization and a measure of progress towards the envisioned future.

💡Strategic Plan

A strategic plan outlines an organization's objectives, strategies, and actions to achieve those objectives. The video describes how both mission and vision statements are integral parts of a strategic plan, providing direction and context for the plan as a whole.

💡Five Why's

The Five Why's is a technique used to explore the cause-and-effect relationships underlying a particular problem or situation. The video mentions this technique in the context of understanding why a company exists, by repeatedly asking 'why' to delve deeper into the organization's purpose.

💡Granite Rock Company

Granite Rock Company is used as an example in the video to illustrate the importance of understanding and articulating the 'why' behind a company's operations. The company's reason for being was to improve the quality of manmade structures, which helped them secure a significant contract.

💡Translation

In the context of the video, translation refers to the process of converting the abstract vision into concrete, understandable terms or images. It is about making the vision tangible so that it can be better understood and pursued by the organization.

Highlights

A company's vision is discussed briefly in the video.

The strategic plan should begin with a mission statement that describes the business's product line and market served.

The mission statement sets boundaries for consistent business investments.

A mission statement should generally be no longer than several sentences.

The plan may contain a separate section on the general goals of the firm, known as the vision statement.

The vision statement is usually short and captures the firm's aspirations and strategic direction.

The difference between mission and vision is not fixed and can vary by firm.

Some firms combine the scope and intent of the message in a single mission statement.

Others have core values that communicate expectations about employee behavior.

Core values can sometimes be included within the mission statement.

The success of mission and vision statements depends on their communication of the firm's objectives and capabilities.

Mission and vision statements are used as framing devices for strategic plans.

A vision statement contains two parts: core ideology and an envisioned future.

Core ideology includes core values and the core purpose of the organization.

The envisioned future includes a long-term goal, often referred to as a BHAG (Big Hairy Audacious Goal).

The vision should be translated from words to pictures for better understanding.

The 'five why's' technique is used to delve into the reasons behind the firm's existence.

A concrete firm example is given where they figured out their 'why' to provide better asphalt for runways.

Granite Rock Company of Watsonville, California, won a contract by articulating their 'why'.

When creating mission and vision statements, consider the core values and purpose of the organization.

Transcripts

hello well in this video I'll be talking

briefly about a company's vision so

before we get to the vision right we

played back this chapter the strategic

plan should begin with a statement that

describes the scope of the business in

terms of its product line and market

served right this is called a mission

statement and this section of the plan

puts a boundary of the types of

investments that are consistent they

didn't give the business break the

mission statement should generally or

typically be no longer than several

sentences longer statements tend to lose

their impact right we communicate with

no organization or to customers

suppliers and investors now the plan

sometimes contains a separate section on

the general goals of the firm this

vision statement right is usually quite

short and it captures the firm's

aspirations in strategic direction now

for example write the business may

target market dominance through a

combination of service quality and

awareness or the vision might focus on

achieving the lowest cost in the

industry now note that the station

between mission and vision is not fixed

in practice right some firms might have

only a mission statement combining the

scope and intent of the message right

others have yet an additional set of

core values that communicate

expectations about employee behavior and

signal the style in which the

organization will conduct business

sometimes the firm's include values

within the mission statement itself as

well now the success of the mission and

vision statements depend less on how

they're structured whereas more so it's

more about what they communicate and how

well they communicate the firm's

objectives and key resources and

capabilities now many firms use the

mission and vision statements as preamp

or framing devices for strategic plans

as a whole now in remembrance to the

back to this another Harvard Business

Review article called building a

company's vision by James D Collins and

Jerry Oh for us and it goes two parts

which looks at vision same vision

contains two distinct parts to it right

one is core ideology and the other one

has an envision future now particularly

envision here right it's the core

ideology which contains the core values

and the core purpose in the initiative

feature in which they have a 10 to 30

year be hag or a big hairy audacious

goal and you did the description now

right late sharing the core values

Oracle easy central tenants and from

there you get the core purpose right the

core purpose is the reason for being

those two things combined are the core

ideology of organization and then you

have the big hairy audacious goals right

the long-term goals they can be

quantitative or qualitative right

Walmart become a hundred twenty billion

dollar company by the year 2000 this is

back in 1990 and then from there they

have a vivid description of what they

are right you must translate the vision

from words to pictures of divya switch

that what we like to achieve their goal

and then one of the things which they

say then it's putting it all together

right let me come up this idea of the

five why's right so it's asking yourself

why do you do something why'd you come

we do something and then ask again why

and then again but why they call this

the five why's Greg needs this article

gives an example of a concrete firm

right in which the concrete firm try to

figure out why they're in the industry

it's saying well it's to provide

better asphalt for runways or to build

better buildings and delving down to

this right

it was simply they found a reason for

being to be to make people's lives

better by improving the quality of

manmade structures right in this example

here it was granite rock company of

Watsonville California

and they actually won a huge contract

beating out several competitors because

they were able to articulate their why

that how much better so as you start

looking at mission and vision statements

you'll be creating mission and vision

statements and shoes you've seen the

support companies coming up here in the

next few weeks keep this in mind