Twin Peaks Developing Vision & Mission

Stage 3: Crafting Strategy

Company's Strategy - Making Hierarchy

Corporate Strategy

Orchestrated by the CEO and other senior executives.

Multibusiness Strategy - how to gain advantage from managing a group of businesses.

Two - Way Influence

In the case of a single-business company, these two levels of the strategy making pyramid merge into one level - business strategy - that is orchestrated by the company's CEO and other top executives.

Business Strategy

(One for each business the company has diversified into)

Orchestrated by the general managers of each of the company's different lines of business, often with advice and input from more senior executives and the heads of functional-area activities within each business.

• How to strengthen market position and gain competitive advantage.
• Actions to build competitive capabilities businesses.

Two - Way Influence

Functional Area Strategies

(within each business)

Orchestrated by the heads of major functional activities within a particular business, often in collaboration with other key people.

• Add relevant detail to the hows of the business strategy.
• Provide a game plan for managing particular activity in ways that support the business strategy.

Two-Way Influence

Operating Strategies

within Each Business

• Add detail and completeness to business and functional strategies
• Provide a game plan for managing specific lower-echelon activities with strategic significance.

Orchestrated by brand managers, the operating managers of plants, distribution centers, and purchasing centers, and the managers of strategically important activities like Web site operations, often in collaboration with other key people.

A Strategic Vision + Objectives + Strategy = A Strategic Plan

Strategic Plan

• Includes commitment to allocate resources to the plan and specifies a period for achieving goals.
• It lays out its future direction and business purpose, performance targets and strategy.

Stage 2: Setting Objectives

Objectives

Stage 4: Executing the Strategy

• Objectives are an organization's performance targets – the specific results management wants to achieve.

Principal Aspects in Executing Strategies

• It is to convert the vision and mission into specific performance targets.

Strategy Implementation

Kinds of Objectives to Set

Concrete Measurable Objectives

The Merits of Setting Stretch Objectives

• Financial Objectives

Relates to the financial performance targets management has established for the organization to achieve.rmance

1. They focus efforts and align actions throughout the organization.

• It challenges the company personnel to go all out and deliver “stretch” gains in performance.

• Strategic Objectives

2. They serve as yardsticks for tracking a company's performance and progress.

Relates to target outcomes that indicate a company is strengthening its market standing, competitive vitality, and future business prospects.

• It pushes to be more inventive, urgency to improve both financial performance and business position.

Strategy Objectives

Financial Objectives

3. They provide motivation and inspire employees to greater levels of effort.

• It is an operations – oriented, make-things-happen activity aimed at performing core business activities in a strategy – supportive manner.
• It is demanding and time-consuming.
• It convert strategic plan into action, motivate people, build and strengthen company competencies and competitive capabilities.
• It create and nurture a strategy-supportive work climate and meet or beat performance target.

• Be more intentional and focused in its action.

• Staffing the organization with the needed skills and expertise.
• Building and strengthening strategy – supporting resources and competitive capabilities.
• Organizing the work effort along the lines of best practice.
• Allocating ample resources to the activities critical to strategic success.
• Ensuring that policies and procedures facilitate rather than impede effective strategy execution.

• Winning an x percent market share.
• Achieving lower overall costs than rivals.
• Overtaking ket competitors on product performance or quality or customer service.
• Deriving x percent of revenues from the sale of new products introduced within the past five years.
• Having broader of deeper technological capabilities than rivals.
• Having a wide product line than rivals.
• Having a better – known or more powerful brand name than rivals.
• Having stronger national or global sales and distribution capabilities than rivals.
• Consistently getting new or improved products to market ahead of rivals.

• An x percent increase in annual revenues.
• Annual increases in after-tax profits of x percent.
• Annual increases in earning per share of x percent.
• Annual dividend increases of x percent.
• Profit margins of x percent.
• An x percent return on capital employed (ROCE) or return on shareholder's equity investment (ROE)
• Increased shareholder value – in the form of an upward – trending stock price.
• Bond and credit ratings of x.
• Internal cash flows of x dollars to fund new capital investment.

Short & Long Term Objectives

• Short Term Objectives

Need for Objectives at All Organizational Level

Focus attention on delivering performance improvements in the current period and satisfy shareholder expectations for near-term progress.

• Company objectives need to be broken down into performance targets for each of the organization's separate businesses, product lines, functional departments, and individual work units.

• Objective setting is a top-down process.

• Long Term Objectives

Force managers to consider what to do now to put the company in position to perform better later.

Principal Aspects in Executing Strategies

• Installing information and operating systems that enable company personnel to carry out their roles effectively and efficiently.
• Motivating people and trying rewards and incentives directly to the achievement of performance objectives.
• Creating a company culture and work climate conducive to successful strategy execution.
• Exerting the internal leadership needed to propel implementation forward and drive continuous improvement of the strategy execution processes.

Charting A Company's Direction: Vision and Mission, Objectives, and Strategy

• Developing a Strategic Vision, a Mission, and a Set of Core Values

• Setting Objectives

• Crafting a Strategy

Stage 5: Evaluating Performance and Initiating Corrective Adjustments

• Executing The Strategy

Stage 1: Developing a Strategic Vision, a Mission, and a Set of Core Values

• Evaluating Performance and Initiating Corrective Adjustments

Crafting a Mission Statement

• It is the fifth component of strategy management process.
• It is the trigger point for deciding whether to continue or change the company's vision and mission, objectives, strategy, and/or strategy execution methods.
• It monitors new external developments, evaluate company's progress, and make corrective adjustments.

Strategic Vision

Communicating The Strategic Values

Strategic Vision

• A well conceived mission statement conveys a company's purpose in language specific enough to give the company its own identity.

• An effectively communicated vision is a tool for enlisting the commitment of company personnel to actions that move the company forward in the intended direction.

• Describes management's aspirations for the future and delineates the company's strategic course and long – term direction.

• Effectively communicating the strategic vision down the line to lower – level managers and employees is as important as the strategic soundness of the long – term direction top management has chosen.

• It is a panoramic view of “where we are going”.

• It describes the enterprise's current business and purpose - “who we are, what we do, and why are we are here.”

• It must be well – conceived, distinctive and specific.

• The support of organization members for the vision nearly always means putting “where we are going and why” in writing, distributing the statement organizationwide, and having executives personally explain the vision and its rationale to as many as people as feasible.

Corporate Governance: The Role of the Board of Directors in the Strategy - Crafting, Strategy - Executing Process

The Payoffs of a Clear Vision Statements

Wording A Vision Statement

• Crystallizes executive's own views about long-term direction.

The Do's

The Don'ts

A company mission statement is sufficiently descriptive to:

Be graphic.

Don't be vague or incomplete.

Identify the company's product or services.

Be forward - looking and directional.

• It reduces the risk of decision making getting off course.

Identify the customer groups or markets it is endeavoring to serve.

Don't dwell on the present.

Keep it focused.

Specify the buyer needs it seeks to satisfy.

Have some wiggle.

Don't use overly broad language.

• It is a tool for winning the support of the organization members for internal changes that will help make the vision a reality.

Specify its approach to pleasing customers.

Be sure the journey is feasible.

Don't stable the vision in the bland and uninspiring terms.

Give the company its own identity.

Indicate why the directional path makes good business sense.

Don't be generic.

• It provides a beacon for lower – level managers in setting department objectives and crafting departmental strategies that are in sync with company's overall strategy.

Don't rely on superlatives only.

Make it memorable.

Don't run and on.

• It helps an organization prepare for the future.

Corporate Governance: The Role of the Board of Directors in the Strategy - Crafting, Strategy - Executing Process

Important Role of Board of Directors

1. Critically appraise the company's direction, strategy, and business approaches.

Linking the Vision and Mission with Company Values

2. Evaluate the caliber or senior executives' strategic leadership skills.

3. Institute a compensation plan for top executives that rewards them for actions and results that serve stakeholder interests – especially those of shareholders.

A company's values are the beliefs, traits, and behavioral norms that company personnel are expected to display in conducting the company's business and pursuing its strategic vision and mission.

4. Oversee the company's financial accounting and financial reporting practices.

Coca Cola's Mission & Vision

Coca Cola's Final Values

Vision: 6 P's

Mission Statement

Work Smart

Focus on the Market

Our roadmap starts with our mission, which is enduring. It declares our purpose as a company and serves as the standard against which we weigh our actions and decisions.

• To refresh the world

• To inspire moments of optimism and happiness

• To create value and make a difference

Our vision serves as the framework of our Roadmap and guides every aspect of our business by describing we need to accomplish in order to continue achieving sustainable, quality growth

People: Be a great place to work where people are inspired to be the best the can be.

Portfolio: bring to the world a portfolio of quality beverage brands that antipace and satisfy people’s desires and needs.

Partners: Nurture a winning network of customers and suppliers, together we create a mutual, enduring value.

Planet: be a responsible citizen that makes a difference by helping build and support sustainable communities.

Profit: maximize long-term return to shareowners while being mindful of our overall responsibilities.

Productivity: be a highly effective, lean and fast moving organization.

• Act with urgency

• Remain responsive to change

• Have the courage to change course when needed

• Remain constructively discontent

• Work efficiently

• Focus on needs of our consumers, customers, and franchise partners

• Get out into the market and listen, observe and learn

• Possess a world view

• Focus on execution in the marketplace every day

• Be insatiably curious

Coca Cola Winning Culture

Our winning Culture defines the attitudes and behaviors that will be required of us to make our 2020 Vision a reality.

Be the Brand

Act Like Owners

• Inspire creativity, passion, optimism and fun

• Be accountable for our actions and inactions

• Steward system assets and focus on building value

• Reward out people for taking risks and finding better ways to solve problems

• Learn from our outcomes- what worked and what didn’t

Live Our Values

Our values serve as a compass for our actions and describe how we behave in the world.

• Leadership: the courage to share a better future

• Collaboration: Leverage collective genius

• Integrity: be real

• Accountability: If it is to be, it’s up to me.

• Passion: Committed in heart and mind

• Diversity: As inclusive of our brands

• Quality: What we do, we do well

Developing Vision Mission and Understanding Strategies