Building and Sustaining your business (V): Clarifying your mission, vision and values
Last week, the discussion focused on mission and vision statements. We continue the discussion this week, by throwing more light on the Values statement, which though less frequently considered, is equally important.
With respect to values, I would say that these extend or shorten the life span of a business. Values are to a business, what salt is to a meal. Values provide the guiding principles that influence the actions taken in a business. Examples include: mutual respect, honesty in all transactions, prioritising customer experience etc. Personal values determine the company values, and company values determine the culture of the organisation. They determine what is considered right or wrong behaviour. Right from the onset of a business, one should consciously decide what is acceptable and what is not. Values influence how you choose to execute your mission and work towards your vision.
For instance, following our example of providing safe, comfortable and efficient transportation, if one does not have ethical values, the company can say it is offering safe transportation and appear safe, without really being safe. They can cut corners by using cheap second-hand tyres which can burst on a long journey or by hiring untrained drivers. They may get away with this in the short term, until frequent accidents eventually reveal the reality and spoil the reputation of the company. On the other hand, if the company makes sure they actually do what was promised, by ensuring the right safety measures are in place, even if it means they will have only a small fleet of cars and cannot take advantage of many customers in the immediate term, they will develop a reputation for quality service.
Providing what has been promised in an authentic way therefore builds a brand, and once people begin to associate a brand with trust and quality service, the business easily attracts more patronage and grows very quickly. A strong brand also makes it easier to get funding from financial institutions and attract investors. So while the business may have grown slowly at the initial stages, the growth and profitability becomes more aggressive over time, based on the track record.
The danger however, is that most businesses begin to get complacent when they get to a position of success. Entrepreneurs therefore have to work very hard to make sure that the fundamentals of mission, vision and values that led the company to a high level of success are kept alive. One possible way to do this could be to design the reward system to align with how well each staff contributes to the mission, vision and values of the organisation. As reward systems drive behavior, an entrepreneur must find ways to create incentives for the behaviours they wish to see. Consequently, staff key performance indicators should have a section that examines how each staff member has either contributed to fulfilling the company’s the mission or how they demonstrate company values. There equally have to be penalties when the mission or values are compromised, even if the staff is meeting or exceeding financial targets. Focusing only on financial target, could lead to short term gains at the expense of long-term sustainability, which is driven by values, in addition to innovation and being customer centric.
While mission or vision may be modified as the need arises, what should never change or be compromised are values. No matter how good the products or services of a company may be, when values are compromised, business sustainability is at risk. When a company has strong ethical values, issues like selling fake or expired products to customers are non-existent, and this builds the brand and customer confidence. It ultimately increases patronage and profitability. On the other hand, when no attention is paid to values, staff do whatever they feel will be profitable and can decide to cut corners by buying fake or poor quality products and sell them as original or high quality. As customers become aware of this, the company’s brand and reputation becomes dented and they eventually lose customers. This easily leads to the end of the business. Further, for a business to be sustainable, the people that run it have to work well together and this happens more easily when values are considered important and upheld.
In summary, having thoughtfully crafted mission, vision, and value statements, make it easier for entrepreneurs to develop a healthy culture that can replicated across branches. It makes it easier for new employees to understand the purpose of the business, the aims and also the do’s and don’ts of an organisation. By role modelling and encouraging desired behaviours through the reward system, a healthy culture is entrenched and business sustainability is fostered.
Next week, we will speak about the importance of having standard operating procedures while encouraging innovation at all levels.Dr Henrietta Onwuegbuzie is a globally certified Management Consultant and a Senior Lecturer in Entrepreneurship at Lagos Business School: Twitter: @honwuegbuzie; email: firstname.lastname@example.org