Vision, Mission, Principles, And The Human Brain

The Business Strategy Newsletter Issue 1-2009

Tempo!

Vision, Mission, Principles, And the Human Brain By Henrik Mårtensson When John F. Kennedy said that the United States would put a man on the Moon, and bring him safely back before the end of the 1960’s, he presented a strong, unifying vision. I was only six years old at the time of the first Moon landing, but I still remember the awe I felt when I saw Neil Armstrong standing on the Moon. It was the greatest adventure mankind has embarked upon to date, and it began with a vision statement. The vision of a man on the Moon energized the floundering U.S. space program, but that is The Tempo! newsletter contains supporting material for Tempo!, a business strategy book written by Henrik Mårtensson The Tempo! newsletter is published by HM MediaTech. Email: [email protected] Phone: +46 708 56 23 65 Twitter: @Kallokain Skype: rubyist © 2009 by Henrik Mårtensson

only a small part of what it accomplished.

Tempo! Supplemen t Can be rea d stand-alon e

The vision united a nation, and it drove the development of technologies necessary to accomplish the goal, including developing lightweight electronics. NASA did not invent the Integrated Circuit (IC), but the organization was an early adopter, and it funded research work at MIT, and spurred the imagination of scientists and engineers. NASA has also been a driving force in the development of satellites, which are necessary for our modern communications systems. Would they have been able to do this without the prestige, power and energy generated by the Apollo space program? Maybe, but I believe not. More importantly, our paradigms, the ideas we have about how our world works would be quite different.

Would we view the world in quite the same way without images like this famous photo from Apollo 17:

Visions are as important to business organizations as they are to nations. Unity and sense of mission are incredibly important, especially in uncertain times. Vision provides guidance.Vision encourages an organization to grow in new directions. For example, Honda defines itself as a mobility company, not a car or motorcycle manufacturer. This has enabled Honda to diversify into building aircrafts, developing exoskeletons for elderly people, and creating one of the world’s most advanced humanoid robots, ASIMO. Why then, are most corporate vision and mission statements so bland? A vision statement is supposed to inspire, and yet, most companies have vision statements that are very similar, and of little interest to anyone but C-level executives, and perhaps the odd accountant or two. Many vision and mission statements are filled with phrases like “market leader” and “provide customer value”, or “products of the highest quality”. Frankly, most such statements are tripe. They have no substance. They inspire no one, and have little or no effect on how the organization conducts its business. Nor are they a useful framework for developing strategies for the future. 2

"First, I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the Moon and returning him back safely to the earth. No single space project in this period will be more impressive to mankind, or more important for the long-range exploration of space; and none will be so difficult or expensive to accomplish." — John F. Kennedy

There are several reasons for companies having bland, impotent vision and mission statements: 1. Developing vision and mission statements take time. C-level managers are loath to spend the time necessary. They are often more focused on dealing with issues that are urgent, rather than issues that are truly important. 2. Few people, C-level or not, know where to start. Both the purposes and the definitions may be unclear. In many corporate cultures admitting to not knowing something is seen as exposing a vulnerability. So, a bunch of C-

Coca-Cola Vision Statement To achieve sustainable growth, we have established a vision with clear goals. Profit: Maximizing return to shareowners while being mindful of our overall responsibilities. People: Being a great place to work where people are inspired to be the best they can be. Portfolio: Bringing to the world a portfolio of beverage brands that anticipate and satisfy peoples; desires and needs. Partners: Nurturing a winning network of partners and building mutual loyalty. Planet: Being a responsible global citizen that makes a difference.

level executives, all equally uncertain and confused, sit together, and focus on not revealing that they do not know how to create mission and vision statements, rather than on learning how to do it. 3. Developing a vision requires a great deal of introspection. It is important to develop true self-awareness, not only to understand ones own motivations, but to take charge of them, and even change them. While most people are able to do this, it does require effort, and may take them far away from their personal comfort zone. Thus, many people simply choose not to make the effort. 4. Few C-level executives understand the importance of involving the entire organization in developing the vision and the mission. Thus, the statements fail to take the views of other stakeholders, including the organization’s employees, into account.

5. Few people have a process for developing vision and mission statements. What Vision and Mission Statements Are A good vision statement expresses a compelling vision about the future. Achieving the vision does not have to be feasible, but it does have to be desirable. A common trap is to believe the vision has to be specifically about what the organization wishes to become. That is unnecessarily limiting. The most powerful visions describe a world that is better in some way, not only for the organization and its members, but for other people. A mission statement describes how the organization will achieve the vision. To be compelling, a vision statement must touch the inner core of people, the center of their being. There are many things we can build our sense of identity and self-worth on: Family, spouse, children, work, money, possessions, 3

Merck Mission Statement The mission of Merck is to provide society with superior products and services by developing innovations and solutions that improve the quality of life and satisfy customer needs, and to provide employees with meaningful work and advancement opportunities, and investors with a superior rate of return. Merck Principles Our business is preserving and improving human life. All of our actions must be measured by our success in achieving this goal. We value, above all, our ability to serve everyone who can benefit from the appropriate use of our products and services, thereby providing lasting consumer satisfaction. We are committed to the highest standards of ethics and integrity. We are responsible to our customers, to Merck employees and their families, to the environments we inhabit, and to the societies we serve worldwide. In discharging our responsibilities, we do not take professional or ethical shortcuts. Our interactions with all segments of society must reflect the high standards we profess. pleasure, friends, even enemies, or we can link our self-esteem to an organization. We all do this, to some extent. Unfortunately, as Stephen Covey pointed out in his famous book The 7 Habits of Highly Effective People, there are drawbacks to each and every one of these. They all create external dependencies. These make us vulnerable, and can make us forego long term success in favor of short term satisfaction. Principles Are the Foundation for Vision and Mission! A set of principles is a stronger, more enduring core for individuals. Principles can also be shared with other people, across boundaries of self, family, and organizational affiliations.

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We are dedicated to the highest level of scientific excellence and commit our research to improving human and animal health and the quality of life. We strive to identify the most critical needs of consumers and customers, and we devote our resources to meeting those needs. We expect profits, but only from work that satisfies customer needs and benefits humanity. Our ability to meet our responsibilities depends on maintaining a financial position that invites investment in leadingedge research and that makes possible effective delivery of research results. We recognize that the ability to excel -- to most competitively meet society's and customers' needs -- depends on the integrity, knowledge, imagination, skill, diversity and teamwork of our employees, and we value these qualities most highly. To this end, we strive to create an environment of mutual respect, encouragement and teamwork -an environment that rewards commitment and performance and is responsive to the needs of our employees and their families.

Vision Statement A compelling vision of the future

Mission Statement How the organization will achieve the vision Vision and mission statements are logically connected: If the mission Is accomplished, Then the vision will become reality.

Possessions

Family

Work Money

Spouse

Pleasure

The Center of My Life (What gives me security, guides my actions, provides life perspective, energy and power)

Friends Enemies

The Center of the Organization (What gives the organization security, guides its actions, provides perspective, energy and power)

Principles

Organization (Employer, political religious, sports...)

Vision

Mission

Stephen Coveyʼs principle Based Vision and Mission statements are fully compatible with the Noble Vision concept described in Tempo! The ideas are also consistent with behavioral research and modern neuroscientific research.

Even in a constantly changing world, basic principles endure. Therefore, a vision, which must also endure for a long time, must be based on core principles. There are many principles that can serve as the basis for both personal and organizational vision and mission statements. Figuring out which principles that guide your actions, and articulating them, requires a lot of work. Identifying and articulating the basic principles guiding an organization is the responsibility of the system owners. It cannot be delegated. However, if you are a system owner, for example the actual owner of a company, or a Clevel executive, nothing should stop you from getting a bit of help. Creating effective vision and mission statements by necessity involves the entire organization. People will commit to a much greater degree to a vision and a mission they themselves have helped develop.

You can involve employees throughout the organization in developing the core principles too. Tempo! describes Crawford Slip, a brainstorming technique that can be used in very large groups. Crawford Slip can be an invaluable tool when developing basic principles, vision, and mission for the organization. Remember that as the system owner, you will have to live and work according to the principles you espouse. Therefore, the final decision about which principles to follow is yours. Input from others is valuable, but at the end of the day, you are responsible for the core principles of your organization. Discover Your Core Principles: Are You a Theory X or Theory Y Manager? Unless you are a buddhist monk or a Barack Obama type politician, you may never have articulated the principles you live by, even if you are a person of great integrity and your principles have a very strong influence on your character and your actions. 5

The organization must be hierarchical.

Workers must be closely supervised.

The manager must structure the work.

Workers will deliberately under-perform.

Workers will avoid work if they can.

Workers will avoid responsibility if they can.

Workers are inherently lazy

Workers inherently dislike work.

Theory X says that workers are basically lazy. They dislike work, and have little ambition. Therefore, extrinsic reward systems, usually money, are necessary to motivate them. Workers must be told what to do, and be closely monitored. Each worker can be allowed only a There must be small span of control. This requires a comcomprehensive plex hierarchy of authority, and very decontrol tailed rules governing the behavior of emsystems. ployees.

Failures must be punished.

Theory X management can get positively ridiculous when driven to extremes. For example, I once worked as a team leader in a project where the project manager insisted on completely reworked time estimates at least once, often twice, each day. Predictably, the only output from the project team was estimates and project plans. (This experience Extrinsic reward had a lot to do with my decision to go systems are into management consulting.) necessary to motivate workers.

Even though few managers publicly admit they manage according to Theory X, it is the dominant management theory today.

Workers have little inherent ambition.

Most companies are a mix of Theory X and Theory Y, with Theory X as the dominant paradigm among managers. However, the Theory X based command hierarchies and functional divisions are ill suited to high tempo and knowledge work.

It helps to have a starting point. One such starting point is to consider two extremes of core principles, and how they affect people’s behavior and outlook on management and leadership. Douglas MacGregor at the MIT Sloan School of Management expressed the basic extremes of management and leadership theory in the 1960’s: Theory X and Theory Y. 6

Theory X managers use what Stephen Covey refers to as Gofer (go for) Management. They tell people exactly how to do things, and watch over every step.

Theory Y says that under the right conditions, workers are ambitious, self-motivated, creative, and capable of self-control. Under the right conditions, workers are excellent decision makers.

Managers are by definition system owners. they create and maintain organizational structures and determine the rules of the organization. Therefore it is the responsibility of managers to create working conditions that bring out the best in workers. Theory Y management is much easier and less stressful than Theory X management, but it does require Theory Y managers to have a skill set that is completely different from the Theory X managers skill set. (Tempo! provides a complete tool set for Theory Y managers.)

Failures that result in learning should be rewarded.

W.L. Goreʼs Guiding Principles Fairness to each other and everyone with whom we come in contact Freedom to encourage, help, and allow other associates to grow in knowledge, skill, and scope of responsibility

Failures are opportunities to learn and improve.

The ability to make one's own commitments and keep them Consultation with other associates before undertaking actions that could impact the reputation of the company

Workers must be encouraged to communicate laterally and vertically (No organizational silos.)

Workers should have a say in decisions that affect them.

Workers should have great latitude regarding how to accomplish missions.

Workers have first-hand information about their working conditions.

Workers are responsible decision makers.

Workers are ambitious under the right conditions.

Workers can excercise selfcontrol.

Most work involves many process steps performed by different people.

Workers are creative under the right conditions.

There is no need for elaborate hierarchies of control and authority.

Failures are the result of factors outside the control or understanding of the worker.

There is no need for elaborate control structures.

Under the right conditions, most workers will do their best at work.

Work satisfaction is strong motivation to do well.

Workers are motivated by intrinsic rewards.

Managers are responsible for creating a work climate where workers can do well.

Workers are self-motivated under the right conditions.

Workers enjoy their work under the right conditions.

Managers, by definition, are responsible for the organization as a system.

Theory Y leads to better performing organizations, partly because it encourages individual workers to perform better, but also because it creates opportunities to create organizational structures that are agile and resilient. See Tempo! for a thorough description of the organizational structures possible, and how they confer competitive advantages.

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The catch is that such transformations are difficult, and require a lot of effort. If you decide to move your organization closer to the Theory Y end of the X-Y continuum, be prepared for a lot of work. Remember that saying your company is a Theory Y company will not confer any advantages by itself. You have to walk the walk as well as talk the talk. Neuroscience and Core Principles

What happens when you drive Theory Y management to its extremes? Judging from W. L. Gore, Ltd., which is a company explicitly based on Theory Y, you get a booming success. Gore is one of the few companies that expect to grow significantly during, and to some extent because of, the current recession. Gore has no employees, only associates. Associates have four principles to guide them, and they elect their leaders by voting. See the sidebar on page 7 for the Gore guiding principles. Theory Y organizations do not need the hierarchies of command and elaborate control structures that Theory X organizations do. Command is decentralized. This makes them agile, able to grasp opportunities quickly, and able to adapt to changing circumstances. Most Theory Y dominant companies were created that way from the start, or at least early on, like Richard Branson’s Virgin Group. It is possible for large organizations to deliberately transform from Theory X to Theory Y though. The U.S. Marine Corps is a shining example.

McDonaldʼs Vision Statement "McDonald's vision is to be the world's best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile."

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In Tempo! I show the structural advantages an organization can obtain by using vision, mission, and trust as cohesive forces. There is another side to the matter which I did not explore as fully: Theory X organization’s waste brainpower, because only a few people in the organization, the managers, are supposed to do any creative thinking. This is pretty obvious, and has been lamented by many people over the past 90 years. What is less obvious is that Theory X may also short-circuit the few brains that are supposed to think in hierarchical Command & Control organizations. The culprit is the belief that rewards should be predominantly extrinsic. That is, that people are primarily motivated by money, status, and power. The problem isn’t that this is a false belief. It isn’t. Money, status and power are powerful motivators. Very powerful. The problem lies in how these extrinsic motivators affect the brain. Neuroscientific research has showed that we have two different centers in the brain that are active when we become motivated to do something. One of these centers is the Nucleus Accumbens, the pleasure center of the brain. The other is the Posterior Superior Temporal Sulcus, a groove on the surface of the brain. The Nucleus Accumbens is an old part of the brain. Not much thinking going on there, just the

desire for immediate gratification. The Nucleus Accumbens is triggered by extrinsic rewards, like a promise of money. The Posterior Superior Temporal Sulcus, on the other hand, is activated when we feel social responsibility. It is triggered when we are stimulated to think about the well-being of other people. Theory X thus becomes selffulfilling. It affects management expectations, and thus influences management behavior, so that people, workers and managers, exhibit exactly the stupid and irresponsible behaviors Theory X predicts. The problem is that these centers are never active at the same time! Extrinsic rewards make our social conscience shrivel up and go into a coma. In effect, by basing organizational reward systems on large extrinsic rewards, we are manufacturing temporary sociopaths. Theory X organizations also punish failure. Most people fear punishment and want to avoid it, so they do what they can to avoid failure. That is, they take few or no risks and they try to hide their mistakes and failures. In other words, fear kills initiative, and reduces our ability to correct mistakes. Fear is to a large extent a learned response to an external stimulus. In a Theory X environment, fear responses will be triggered over and over again, leading to increased sensitivity to the stimuli. Fear reduces our capacity to reason clearly. As Frank Herbert put it in Dune: Fear is the mindkiller. Consequently, Theory X based environments does not just engender selfish behavior, it also inhibits initiative and reduces our capacity to think.

It is nice to get out of the office once in a while. The picture shows me while doing preliminary research for the Primus Vicus project.

Theory X thus becomes self-fulfilling. It affects management expectations, and thus influences management behavior, so that people, workers and managers, exhibit exactly the stupid and irresponsible behaviors Theory X predicts. On the plus side, Theory Y is also self-fulfilling. People adapt their behavior to positive expectations too. Even better: There is evidence that stimulating the Posterior Superior Temporal Sulcus, the brain’s altruism center, leads to better performance than stimulating the pleasure center. Stimulating the Nucleus Accumbens may even lead to worse performance than doing nothing at all. (See the book Sway in the Reference section.) If we are looking for principles to drive a unifying vision and shaping missions people will commit to, it is clear we should look close to the Theory Y end of the X-Y continuum. Putting a Vision to the Test: The Battle for Primus Vicus In the summer of 2008 my family and I visited a medieval village in Halmstad. The village is called Virgin Atlantic Mission Statement To grow a profitable airline, where people love to fly, and people love to work. 9

The Primus Vicus medieval society was close to shutting down when they decided to express their vision and mission in the form of an Intermediate Objective Map to rally their forces. Later, when under direct attack from a PR and event arrangement company, the society fought back successfully.

Primus Vicus (First Village) and was built in 2007 as part of the celebration of Halmstad’s 700 year anniversary. The original plan was to tear Primus Vicus down once the anniversary celebrations were over. However, a group of enthusiasts, including

the project manager and members of the team that built the village, decided to turn the village into a permanent tourist attraction. In order to do this, they formed the Primus Vicus medieval society, and obtained stewardship of the village.

Create an interest in medieval history and folk life.

Be a Living History museum

Work in close collaboration with the municipality

Have a historically correct environment

Be profitable to the municipality

Be a knowledge center for medieval history and culture

Draw tourists to Halmstad

Have top class PR

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Fit into Halmstad's 2020 vision (City of Knowledge, City of Events, Home Town)

Have excellent sponsor support

Make money now and in the future

Maximize revenue

Have popular attractions and activities the year around

Be an interesting partner for other societies

Minimize operating expenses considering revenue and investment

Minimize investments considering revenue

Have active and committed members

Have fun activities for members

Be well organized with clearly defined areas of responsibility

All active members took part in creating the vision and the mission for the Primus Vicus society. Active participation at all levels of an organization is absolutely necessary. Without it, people will have no reason to commit themselves. Less than a year after these pictures were taken, the people here proved their commitment in the battle against Halmstad & Co.

Running the village proved to be much more difficult than building it. When I first visited Primus Vicus there was talk of giving up, of closing the village and disbanding the Primus Vicus society. I talked with some society members when my family and I visited the village, and suggested that I might help. We decided to run a brainstorming session for the entire society, and develop a combined vision and mission statement in the form of an Intermediate Objective Map, and a plan for reenergizing the society and getting the village on secure financial footing. I often work under NDA’s, but the Primus Vicus society decided to let me videotape the work we did, publish videocasts, write and talk about the project. For me, this was a rare chance to publish detailed accounts of some of my work. I have described the two day brainstorming session in three videocasts on the Kallokain channel at YouTube, so I will skip the details here. What is interesting is the Intermediate Objective Map on page 12. It shows the vision and the mission the society members created for themselves, a vision and a mission they chose to commit to.

Some time after my work with the society, the society made a deal with the Halmstad city council to transform their stewardship of the village into ownership. When society members went to a meeting to sign the contract, they were surprised to find that the deal was off. The city council had decided to close the village and tear it down. It soon became apparent that the city council had changed its decision because of Halmstad & Co., an event arrangement company. The reasons are not entirely clear, but initially it probably had to do with getting control of the property the village was built on. Later, the battle developed into a death-match. Halmstad & Co. expected an easy victory. They soon found they had attacked a nest of wild cats. Primus Vicus had found their vision. They now made it their mission to fight off the threat.

Honda Mission Statement "We will crush, squash, and slaughter Yamaha" From the famous Honda-Yamaha War in the 1980’s. 11

Start

Can the statement be disagreed with reasonably?

A mission should play the same role in a company that the Holy Grail did in the Crusades. It does not have to appear to be feasible; it only has to be desirable. — Dr. Russel Ackoff

No If the statement cannot be disagreed with, it is to bland to be useful. Can progress towards the objectives be measured?

Yes If progress is not measurable, the statement is useless. Does the statement differentiate the organization from other organizations?

Yes

Is it a unifying concept for all the diverse businesses the company is in?

If there is no fundamental difference between the organization and other organizations, the organization has no value over other organizations.

Yes Without diversification and growth, the organization will eventually wither and die. Does it suggest new directions for diversification and growth?

Yes Shareholders, managers, employees, the public, customers, suppliers... Is it relevant to all stakeholders?

Yes

Is it exciting and inspiring?

All employees must participate in developing the statement (or substatements), or relevance will be lost.

The battle got pretty harsh. At one point, when I visited the village, the city council had locked the village up, and had dogs running loose inside it to keep society members out. At another point in the war, it was the society that occupied the village in order to stop the city council from tearing it down. The Primus Vicus society attacked in Maneuver Conflict fashion, with attacks from multiple directions: They engaged a lawyer to sue for breach of contract, they occupied the village, they made public manifestations to turn the public against the PR company attacking them, they held events to prove their worth to the community, and they succeeded! In the end, the Primus Vicus society had to agree to relocate the village, but they did obtain ownership. The CEO of Halmstad & Co. resigned in June 2009. The Primus Vicus society is alive and well. I am definitely going to renew my membership. Vision Check: How to Test Your Vision and Mission Statements Use the flow chart to the left to check whether your vision and mission statements can unify and guide your company toward the future. The diagram is based on an article by Dr. Russel Ackoff. If you get stuck at one of the evaluation boxes, unable to proceed further, your vision and mission may be nothing more than wasted space on your corporate web site. In the short range, this may not hurt you much, at least no more than the pain you are feeling right now, but ponder this:

Yes

Is it visible?

Great Vision and Mission

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Managers and employees must see the vision and mission every day. The vision and mission must become part of everyone's mental picture of the organization.

A company without a vision, is a company without a future.

References and Acknowledgements Books: • Sway:The Irresistible Pull of Irrational Behavior by Ori Brafman and Rom Brafman • The 7 Habits of Highly Successful People by Stephen R. Covey.

About Henrik Mårtensson

Articles on the Web: • Computers in Spaceflight: The NASA Experience at http://history.nasa.gov/computers/Part1.html • Mission Statements, an article by Dr. Russell Ackoff is available at http://www.charleswarner.us/ articles/mission.htm Photographs The following photos are from stock.xchng: • Seattle Space Needle The following photos are from WikiMedia Commons: • • • • •

Blue Marble, photo of the Earth taken during the Apollo 17 expedition. John F. Kennedy Apollo 17 Moon landing Coca-Cola advertisment Brain with Nucleus Accumbens marked

Henrik Mårtensson is a management consultant and business advisor. Henrik has worked for Ericsson HewlettPackard, Volvo 3P, Volvo IT, Wirelesscar, FMV, Scania, Astra-Zeneca and many other companies. Henrik is a prolific writer, with more than 250 published magazine articles, and several technical manuals to his credit. His blog, Kallokain, was nominated for NOOP’s list of most influential bloggers in 2008. Henrik is also a member of AgileZone’s Most Valued Blogger program. Henrik’s videocasts about management on the Kallokain channel at YouTube have been viewed more than 30,000 times. You can contact Henrik by phone: email:

Skype: Twitter:

+46 708 56 23 65 [email protected] rubyist @Kallokain

or, visit Henrik’s web sites: www.henrikmartensson.org kallokain.blogspot.com www.youtube.com/user/kallokain

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