Mission Statement

Mission statements are used by companies to explain in simple and concise terms why they exist, or what their contribution to the wider community is. This serves to provide a focus for employees towards what the organisation is trying to achieve, and helps them to work out how they can contribute.

Sometimes the terms ‘mission statement’ and ‘vision statement’ are used interchangeably or even combined into a single statement. But they mean two very different things. A mission statement declares what the company is doing right now, while a vision statement is what the company hopes to achieve in the future. 

From the perspective of organisational transformation, a mission statement provides the context of the bigger picture. It’s an inspiring reminder to everyone of what their collective efforts are contributing to, which is easy to lose sight of in the tornado of daily operations.

Pros

  • Mission statements provide direction and help the people in the organisation to make faster and better decision on where to put their time and energy.
  • Mission statement highlight the company’s core values and helps everybody to immediately understand what the purpose of the company is and how it is different to competitors.
  • A mission statement makes it very clear how a company does business.

Cons

  • A mission statement must be lived, not just pasted on walls.  This requires significant effort from everyone within the organisation.
  • Mission statements can be too focused on internal and/or short term issues, which can result in the company to become obsolete if the external environment changes faster than their mission (think Blockbusters).

Recommended resources:

Start with Why: How Great Leaders Inspire Everyone to Take Action, Simon Sinek, 2011; ISBN: 9781591846444

McKinsey 7-S Model

The McKinsey 7S Model refers to a tool that analyses a company’s organisational design. The goal of the model is to depict how effectiveness can be achieved in an organisation through the interactions of seven key elements – Structure, Strategy, Skill, System, Shared Values, Style, and Staff.

The focus of the McKinsey 7s Model lies in the interconnectedness of the elements that are categorized by ‘Soft Ss’ and ‘Hard Ss’. It implies that a domino effect exists when changing one element in order to maintain an effective balance.

From the perspective of organisational transformation, it is worthwhile to consider if a predominantly internally focused methodology will meet the organisation’s needs.

Pros

  • It helps in bringing the various departments and processes in sync with each other, especially when mergers or acquisition takes place.
  • It provides a framework to analyse the effects of changing corporate culture, policies, strategies, structure, technology over the organisation.
  • It is a broad approach since it inspects each of the seven elements and their correlation with each other.

Cons

  • The methodology could be considered too internally focused, therefore not allowing for sufficient attention to be placed on external factors affecting the business during it’s transformation.
  • It doesn’t provide a clear roadmap as practical support for the transformation process.
  • It relies on long-term results to provide sufficient input for analysis and therefore may not be sufficiently agile in it’s approach.

Recommended resources:

Enduring Ideas: The 7S-Framework, McKinsey & Company

Management By Objectives (MBO)

The term ‘management by objectives’ was first coined by Peter Drucker in 1954. It is a style of management that prioritizes setting, tracking and achieving goals. By emphasizing planning and personal responsibility it aims to ensure that every employee contributes to company-wide goals through a process of collaboration with their manager. 

It focuses on working ahead towards a common objective, rather than simply reacting to events as they occur. When done well, MBO allows managers to clearly communicate what they expect from employees, and employees to feel involved in the process of setting their own goals.

Following criticism of the original approach, a new formula was introduced in 2016, aimed at revitalizing the process. This is known as the OPTIMAL MBO: Objectives, Outside-in; Profitability related goals; Target Setting; Incentives & Influence; Measurement; Agreement, Accountability, Appraisal, Appreciation; and Leadership Support.

From the perspective of organisational transformation, attention should be placed on a process which takes both short-term operational and longer-term strategic goals into account, which may prove challenging in companies with annual performance cycles.

Pros

  • It can be an effective tool for expectation management.
  • Due to it’s collaborative nature it encourages communication.
  • It increases individual commitment levels.
  • It allows flexibility for individualized plans.

Cons

  • It can be detrimental to overall quality, as it can focus activities too much on only achieving individual specific goals.
  • It increases comparisons between employees, which can have a detrimental effect on a culture of team collaboration.
  • It can’t evaluate everything so may not take into consideration the ‘little things’, which can make a significant difference to team performance.
  • Evaluations can be subject to management bias or incorrect interpretation, and create a mountain of paperwork.

Recommended resources:

Drucker Institute

The Practise of Management, P. Drucker, 2006; ISBN: 0060878975

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