It is simple logic that the success of a company’s mission, vision and strategy depends on a reasonable buy in by all in the workplace. This vexing problem is seldom dealt with successfully, although much time, effort and money is often thrown at it.

Typically, management addresses the problem by formulating some kind of “statement” in a wallpapering, “think-tank” exercise. This is further flavoured by adding B-HAG (“Big, Hairy and Aggressive goals); values, time lines, an overall strategy, and action plans. The outcome is mostly some or other fairly obscure, flowery mission statement or statement of purpose, backed up by so-called “stretching targets”, which Don Quixote himself could not have dreamed up.

The process is then translated into a communication project involving all kinds of media from industrial theatre to documentary video’s and lots of paper.

One does not want to belittle the process entirely. These are sincere attempts to redefine business in a volatile and questioning environment that is challenging business behaviour externally, and that is trying to create meaning for those involved internally. The problem with business plans generally is that the world often has different plans for the business.

Stakeholder buy-in to the overall mission, vision and strategy has to take into account a multitude of issues before it can be achieved. These include:

It has to focus on the contribution the company makes to its market. I believe “rewards” such as profits, wages, etc have little place in a mission statement even if they are couched in “enlightened self interest” terms.

It has to be realistically authentic and a reflection of the way the company sees itself.

It has to be identifiable in all tasks and the impact of these tasks on the company’s mission or purpose has to be taught and understood. It is unforgivable, for example, to find a worker in a gold mine who has never seen a bar of gold, let alone be able to identify his albeit small contribution to jewellery, investment and other laudable uses. An example of a more successful formulation of a mission statement is Pick ‘n Pays’ “We Serve. With our hearts we create a great place to be and with our minds we create an excellent place to shop.” This was the outcome of a bottom up approach in which employees were involved at all levels.

Mission, vision and values have to be personified by the behaviour of top leadership, particularly the CEO. It is easier to follow the contributory, benevolent vision of a strong leader than it is formulate one’s own.

And finally, intention is judged by attention. The core focus of all activities, including operational discussions and of course measurements and final accounting statements have to be aligned to give credibility to the benevolent intent of the business. It really doesn’t help to argue that we are here to serve others, when everything we measure and discuss is about serving the self or the shareholder.

As I discussed before, the last mentioned issue has given rise to many new accounting tools such as Theory of Constraints (TOC) throughput accounting and the Balanced Scorecard. The real problem is that if the final, overall accounting focus is still the income statement, then these tools themselves become a means to that end. They will be skewered to reflect that and the score components will be prioritised and emphasised to add momentum to a profit/cost driven understanding as opposed to a “serving” and value-adding understanding of business. The profit/cost driven approach arguably creates divisions that make it impossible to focus on a unifying benevolent mission.

The value-added measurement and the value-added statement, as argued in the previous article, fully address this problem. The value-added understanding addresses all three fundamental areas of business: transforming; measuring and intention. It therefore forces the company into a model that implies prudence and maximum profitability as wealth as longer-term growth.

Most mission statements or statements of purpose in some or other way today do reflect a benevolent intent. Why is it, one wonders, that at grass roots level there is this sense of inconsistency? We “say one thing but do another”! The simple answer is that the role of profits, and meeting the legitimate expectations of shareholders in sustaining our mission is not understood. We have failed to position profits as a means rather than an end in itself. But more likely, we are simply not being truthful in the mission statement itself.

It may be better to go back to a decade or two ago when most mission statements openly professed to maximise return for the shareholders. The difficulty in aligning all activities in the business to a “serving” mission is that we are stuck in a business model that we have inherited from the past. The moment we assume that any business is based on profit as its primary motive, we force it into this model and all activities will reflect this as being the super ordinate goal. A contributory mission statement then becomes nothing more than a piece of paper or a nice picture on a wall.

This model, which was born in the industrial revolution in a class structure British society can be called the Anglo-Saxon profit driven model, and it looks something like this:

The model sees its primary focus as the generation of profits as measured by the income statement. The balance sheet, or shareholder worth is then seen to be a consequence of the income statement. At worst, the model sees labour as an input cost, or commodity in the same class as materials. At best, it sees labour as part of the operational activities whose main purpose is the generation of profit.

The historic context to this model is important, because ultimately it gave rise to the ideological divide, the birth of labour and social unrest and indeed a different model which one can call the labour or wage driven model. The latter can be illustrated simply by switching labour and shareholders in the graphic. While the labour model collapsed in the command economies, it has survived in organisations like labour cooperatives, kibbutzes, and in countries such as Japan.

A value-driven, value-adding model would look something like this:

This model sees its primary purpose as being service to its customers. The only real “input” costs are from outside suppliers. The difference between output and input is measured as value-added or wealth created, which then becomes its main measurement of productivity. The value-added statement is used throughout the accounting process, and the income statement and balance sheet are seen to be an outflow of value-added.

It can be forcefully argued the value-added focus does lead to higher profits. But invariably, these would more likely be the outcome of growth rather than of containment. As long as the business is sticking to the fundamental rules of wealth distribution, which are to meet the legitimate expectations of all of the stakeholders and to encourage continued contribution, the model will exceed all of the outcomes of the profit driven model, including shareholder worth.

In the operational block we see how the different methodologies of operational excellence, such as the balanced scorecard, can be accommodated in the model. Our contention is, however, that showing and using the value-added statement at all operational levels and by designing “sub-scores” to the statement, gives one a far better alignment tool. This will be dealt with when we examine the statement itself in greater detail.

Finally, alignment of activities is only possible if the dialogue is fundamentally influenced and changed in the day-to-day operations. The overall focus of a company is invariably going to be reflected in the attention given to it in its meetings, operational and strategic.

The mission and vision have to be authentic and can face either in a self serving direction reflected in the income statement, or in a contributing direction as measured by the value-added statement. Experience has clearly shown that the income statement blocks the flow. It is impossible to get an uninterrupted, clear line of sight link between the income statement and the preoccupation of operational meetings. This becomes even more difficult when the mission statement faces towards the right (give), but the executive strategy actually faces towards the left (take).

By designing sub-scores to the value-added statement pertinent to the different levels one automatically creates a template for the content of all meetings, from the strategic at executive and management levels, to the operational at departmental, team and one-on-one meetings. These scores are so clearly linked to value-added that a solid golden thread is forged between task and mission.

By providing the only valid common and contributing focus for all in the organisation, the value-added understanding and measurements will ultimately not only positively influence employee commitment and behaviour but also strongly impact on remuneration policy, incentives, and flexible pay.