Clarity: The First Order of Company Priorities

By Timothy Beal







Author and business consultant Peter Drucker, in an interview with Rich Karlgaard of Forbes.com, said, "Make sure the people with whom you work understand your priorities. Where organizations fall down is when they have to guess at what the boss is working at, and they invariably guess wrong."



Not having a clear direction is an obstacle to achieving goals and delivering results. As mission and values represent the heart of a company, the mission and values statements serve to establish and maintain a company's direction.



An effective mission statement addresses customers, employees, vendors, investors and also defines opportunity. Opportunity includes identifying the best initiatives to pursue, and also important, what not to pursue.



Values represent the DNA of a company. They are principles by which people can get hired, fired, promoted or demoted, depending on whether they support or violate the values.







Need for Direction



Stephen Haines of the Centre for Strategic Management has written, "An effective mission statement clearly defines who the customer is and what services and products the business intends to provide. For employees, a strong mission statement builds commitment, loyalty and motivation. For customers, investors and suppliers, it is an opportunity to define what sets the organization apart in terms of products, services and geographical scope."



Conventional business wisdom recognizes how critical mission and values statements are for startup companies and their development. However, once drafted and presented, most companies move forward believing these statements are solidly embedded in the corporate foundation and well known by all employees.



But this is not always true. As companies move through growth stages, things begin to change. Product or service focus is often redefined by market acceptance. The "initial core" group of employees is diluted with new hires and with the "busyness" of growing, focus gets blurred.



Over time, employees, departments or initiatives can become misaligned, therefore not in sync with "what the boss is working at."



While misalignment can occur at startup stage, it is more often present in growing companies. Misalignment occurs when the reality of how a company presently operates no longer connects with its formally stated mission and values, or the mission and values have not been effectively communicated.



Regardless of how well a company may presently be doing, misalignment reduces growth, adds costs and, left unaddressed, may lead to more serious consequences. In fact, "Companies whose employees understand the mission and goals enjoy a 29% greater return than other firms," according to the Watson Wyatt Worldwide Work Study.







Maintain Course



Mission and values represent the heart of a company and seldom change. However, one should not overlook the importance of periodically reassessing mission and values statements in light of company growth.



The process of developing mission and values statements for a startup company is similar to refreshing these statements for growing companies. Numerous resources for drafting and communicating these statements are available in books, via the Internet or through professional consultants.



The purpose of this article is to emphasize that the necessity for clear direction stays constant, regardless of company's growth stage. Left unattended, it will become an obstacle to achieving goals and delivering results.







Take Action



Commit to periodically revisiting your mission and values in light of any market adjustments your company has made. To be credible, what is stated must reflect reality. Ensure consistent communication of these statements, especially with new hires.



Finally, reinforce them regularly. Many companies now incorporate mission and values into their employee recognition programs where employees who support the mission and exhibit the desirable values are recognized and rewarded.







Timothy Beal is managing principal with Beal & Associates in Eldersberg. He can be reached at 410-598-1107 and tbeal@bealandassoc.com.