Hello Sweet:
Good day--this can become a very complicated issue, but needn't be. It basically can be broken down into the component questions which all business addresses in one form or another; Who, What, When, Where, Why and How. Over the last 30 years or so of Management and Consulting, I've arrived at what I believe are the basics in this area. Let me share.
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The Mission or Vision Statement is the description of "why" a company or entity is in operation; it provides the context--the framework, as it were--which serves as the basis for the development of strategies.
Every company sees its Mission statement as it sees itself; some see long, flowing statements as necessary--for others, it's a short, well defined one sentence structure that can be memorized by everyone and used as a company "guide." When I consult with a company on development of a Mission Statement, I suggest the shortest statement possible; the longer and more detailed the statement, the less chance it seems to have for use and execution. I'm not sure exactly why this is, but it seems to be sort of an "unwritten rule" about Mission Statements.
I've been in consults where the CEO and Board actually wanted every employee to know and be able to recite the Mission statement, word for word. Please. This may be a bit over the top, but I've actually seen it in practice. If you experience this, email me and I'll send you a list of other characteristics you will find in companies which are managed in this way!
Generally speaking, the Mission Statement offers vision and a statement of goals or standards. Until a few years ago, it was generally expressed as an infinitive verb tense, "The Mission of XYZ Company is TO x, y, z." This is no longer considered a necessity, but many Managers and C-Level Execs still feel the need to develop an infinitive Mission Statement.
In order to formulate a valid Mission Statement--which should be the end result-- it's critical that one understand the business in terms of who the client is and how their needs are met.
To develop a Mission Statement without taking into consideration the client/customer focus is foolhardy, and generally guarantees that employees of the company will not take the Mission Statement seriously or use it as their guiding definition of what the company or entity stands for.
Management, to develop a Mission Statement, may poll the Board to evaluate the sum total of the beliefs of these stakeholders--both company representatives and outside interested parties--to determine the Mission of the Company. When Mission Statements are developed, they are often developed by a group representing as many different facets of the company as possible to consolidate as many different points of view as possible; a Mission Statement is never easy to develop, and--often--not all parties to the development of the Mission Statement will be pleased with all areas of the outcome of the statement.
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Objectives are established to set guideposts or targets for attainment, and are tied directly to the Mission Statement.
They are the means by which one can measure the performance of the management of the company or entity.
I have believed for some time that there are four separate characteristics of well-constructed objectives; others may add additional characteristics, but for conciseness, I'll list them as follows:
1) Objectives should address issues of importance to the company. This is not a place to discuss dress codes or vacation policies; although those are issues to be addressed in other venues, we're speaking here about issues which impact the effectiveness and competitiveness of a company in its operating environment.
2) Objectives should challenge the company and its workers, but be realistic in their approach, and be attainable. I've maintained for some time that my Clients often want to set unattainable objectives in an effort to "push" employees to perform; such action is not beneficial or useful, and may do more damage than good.
3) Objectives must be able to be measured by objective--and not subjective--means; this does not mean, necessarily, that subjectivity cannot enter into the equation, but generally objectivity is the target. Objective means is defined by clear, inarguable standards.
4) Objectives specify a time horizon for success; this horizon should be consistent with the Mission Statement.
Sometimes, we've seen Senior Management develop and promulgate a Mission Statement and then turn the development of goals over to mid range managers--whose responsibility it becomes to develop workable goals along specific time horizons or deadlines.
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Strategy is normally determined as a result of the recognition of the company's current operation; we always recommend prior to strategic development that a company complete some form of a SWOT Analysis. There are many different types of SWOT Assessments; just about every Consultant has his or her own way of conducting a SWOT Analysis, but generally the SWOT will assess the current Strengths, Weaknesses, Opportunities and Threats of a company in the context of where the company or entity currently "fits" into the marketplace or environment. You must, you see, find a method against which to measure a company against it's working environment, which helps Management craft a series of strategies against which to operate; understand, if you will, that there are a variety of strategies.
The Corporate Level Strategy defines the best business segment to ensure long term profitability and superior competiitive advantage;
The Business Level Strategy defines how the business will position itself in the marketplace using a leadership or differentiation component;
The Functional Level Strategy targets improvements in effectiveness of components of company operations. This is the area which I as a consultant so often address--many times, one key area of the company is, either purposefully or inadvertently, at issue with the goals of the company as a whole. Within large corporations we'll often find that leadership in a key business area--say, for example, marketing--is attempting to exert undue leadership over other areas--and all areas of a company should contribute in an equal manner to the success of the venture. I've often told consults that Marketing does not run the company, nor does manufacturing, nor R&D, nor Sales; it takes a balance of leadership and an understanding of the areas within an organization to make a true equal Functional Level Strategy work. Every area should feel the importance of its efforts, but should not fall into the trap of thinking that their area is most important.
Finally, there is a Global Strategy for a company; small companies often do not think of doing business outside the area in which they operate; we drive our consults to realize that there is one world and business can come from a variety of sources, and will do so--given the opportunity. How a company views its own ability to prosper in a one-world economy often determines the competitive advantage a company can command. I often use the correlation of the business of a company to Kevin Costner's classic movie, Field of Dreams. The overriding theme in that movie was that if the Costner character built the field, "he" would come back to play on it. Business is similar. If you build it, "they" will take advantage of it. It requires Management to operate with a vision and a passion to expand the business outward and upward. Once seized, the vision tends to expand exponentially.
Keep in mind that once a set of strategies is developed, there must be a way to implement and control them; performance-based management arises from this; there are corporate ethics and governance issues to address and implementation steps must be consistent, well conceived, and attainable.
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I think that answers your question fairly, and in a shorter format than using extensive examples. If you have any other questions about Mission, Strategy, and Objectives, I'll be more than happy to answer them for you...and I'm sure that there are other individuals who can express alternative views.
As to the HR function participation, HR functions within all these elements of management; HR should offer the "human" element into the Mission Statement. HR should represent the "human" or "people" side of the realistic opportunities for growth within the business, and should always "champion" the rights and obligations of employees to operate as individuals within an environment where personal input is not always valued as highly as corporate output.
If I can assist further, please let me know.
Alan Guinn, Managing Director
The Guinn Consultancy Group, Inc.