Chapter 3 Performance Management and Strategic Planning Strategy is a style of thinking, a conscious and deliberate process, an intensive implementation system, the science of insuring future success. —Pete Johnson Learning Objectives By the end of this chapter, you will be able to do the following: • Define strategic planning and its overall goal. • Describe the various specific purposes of a strategic plan. • Explain why the usefulness of a performance management system relies to a large degree on its relationship with the organization’s and the unit’s strategic plans. • Understand how to create an organization’s strategic plan, including an environmental analysis resulting in a mission statement, vision statement, goals, and strategies. • Conduct an environmental analysis that includes a consideration of both internal (strengths and weaknesses) and external (opportunities and threats) trends. • Understand how a gap analysis resulting from a consideration of internal and external trends dictates an organization’s mission. • Define the concept of a mission statement and describe the necessary components of a good mission statement. • Define the concept of a vision statement and understand its relationship to the mission statement. • Describe the basic components of a good vision statement. • Create organizational- and unit-level mission and vision statements. • Understand the relationship between mission and vision statements, goals, and strategies. • Understand the relationship between an organization’s vision, mission, goals, and strategies and the vision, mission, goals, and strategies of each of its divisions or units. • Understand the relationship between a unit’s vision, mission, goals, and strategies and individual job descriptions. • Explain why job descriptions must be linked to the organization’s and the unit’s strategic plans. • Understand how a strategic plan determines various choices regarding performance management system design. • Explain why a consideration of strategic issues is a building block for creating support for a performance management system. In Chapters 1 and 2 we discussed the fact that good performance management systems encourage employees to make tangible and important contributions toward the organization’s strategic objectives. When these contributions to the top organizational and unit priorities are made clear, performance management systems are likely to receive crucial top management support. Without this support, it is unlikely that a performance management system will be successful. How, then, are these strategic organizational objectives identified? How does an organization know what the “target” should be, what it is trying to accomplish, and how to do it? These questions are answered by considering an organization’s strategic plan. 3.1 Definition and Purposes of Strategic Planning Strategic planning is a process that involves describing the organization’s destination, assessing barriers that stand in the way of that destination, and selecting approaches for moving forward. The main goal of strategic planning is to allocate resources in a way that provides organizations with a competitive advantage.1 Overall, a strategic plan serves as a blueprint that defines how the organization will allocate its resources in pursuit of its goals. Strategic planning serves the following purposes: First and foremost, strategic planning allows organizations to define their identities. In other words, it provides organizations with a clearer sense of who they are and what their purposes are. Second, strategic planning helps organizations prepare for the future because it clarifies the desired destination. Knowing where the organization wants to go is a key first step in planning how to get there. Third, strategic planning allows organizations to analyze their environment, and doing so enhances their ability to adapt to environmental changes and even anticipate future changes. Although knowledge of the environment does not guarantee that an organization will be more likely to change and adapt, knowledge is the first step toward possible adaptation. Fourth, strategic planning provides organizations with focus and allows them to allocate resources to what matters most. Table 3.1 Strategic Plan: Purposes Helps define the organization’s identity Helps organizations prepare the future Enhances ability to adapt to environmental changes Provides focus and allows better allocation of resources Produces an organizational culture of cooperation Allows for the consideration of new options and opportunities Provides employees with information to direct daily activities In turn, the improved allocation of resources is likely to stimulate growth and improve profitability. Fifth, strategic planning can produce a culture of cooperation within the organization given that a common set of goals is created. Such a culture of cooperation can gain organizations a key competitive advantage. Sixth, strategic planning can be a good corporate eye-opener because it generates new options and opportunities to be considered. New opportunities to be considered may include expanding to new markets or offering new products. Finally, strategic planning can be a powerful tool to guide employees’ daily activities because it identifies the behaviors and results that really matter. A strategic plan provides critical information to be used in the performance management system. To summarize, Table 3.1 lists key purposes of a strategic plan. 3.2 Process of Linking Performance Management to the Strategic Plan The mere presence of a strategic plan does not guarantee that this information will be used effectively as part of the performance management system. In fact, countless organizations spend thousands of hours creating strategic plans that lead to no tangible actions. Many organizations spend too much time and effort crafting their mission and vision statements without undertaking any concrete follow-up actions. The process then ends up being a huge waste of time and a source of frustration and long-lasting cynicism. For example, consider a recent study including more than 350 individuals in firms in India in the following eight sectors: textiles, staple fiber, chemicals, cement, insulators, aluminum, mining, and services. Examples of companies included in this study are Grasim Cement, Jayashree Textiles, Birla NGK Insulators, Essel Mining Industries, and INDAL (Indian Aluminum Industries). Results indicated that although there was a good strategic planning process in place in most firms, there was no clear relationship between firm-level and individual-level goals.2 Thus, to ensure that strategy cascades down the organization and leads to concrete actions, a conscious effort must be made to link the strategic plan with individual performance. Figure 3.1 provides a useful framework for understanding the relationship among an organization’s strategic plan, a unit’s strategic plan, job descriptions, and individual and team performance. The organization’s strategic plan includes a mission statement and a vision statement as well as goals and strategies that will allow for the fulfillment of the mission and vision. The strategies are created with the participation of managers at alllevels. The higher the level of involvement, the more likely it is that managers will see the resulting strategies favorably.3 As soon as the organizational strategies have been defined, senior management proceeds to meet with department or unit managers, who in turn solicit input from all people within their units to create unit-level mission and vision statements, goals, and strategies. A critical issue is to ensure that each unit’s or department’s mission and vision statements, goals, and strategies are consistent with those at the organizational level. Job descriptions are then revised to make sure they are consistent with unit and organizational priorities. Finally, the performance management system includes results, behaviors, and developmental plans consistent with the organizational- and department-level priorities as well as the individual job descriptions. Does the process of aligning organizational, unit, and individual priorities actually work in practice? Is this doable? The answer to these questions is “yes” and the benefits of doing so are widely documented. Performance management systems have a critical role in translating strategy into action.4 In fact, a recent study including 338 organizations in 42 countries found that performance management is the third most important factor affecting the success of a strategic plan. This is particularly true for larger organizations and for organizations that operate in rapidly changing environments. As a concrete example, consider the case of Key Bank USA, a financial services company with assets of $92 billion that provides investment management, retail and commercial banking, consumer finance, and investment banking products and services. Key Bank of Utah successfully developed a performance management system that is aligned with the strategic plan of the organization.5 To do this, the bank first involved managers at all hierarchical levels to develop an organization mission statement. Next, it developed goals and strategies that would help achieve Key Bank’s mission. The mission statement, goals, and strategies at the organizational level served as the foundation for developing the strategies for individual departments and units. To develop these, senior managers met with each department manager to discuss the organization’s goals and strategies and to explain the importance of having similar items in place in each department. Subsequently, each of the departmental managers met with his or her employees to develop the department’s mission statement and goals. One important premise in this exercise was that each department’s mission statement and objectives had to be aligned with the corporate mission statement, goals, and strategies. After organizational and departmental goals and strategies were aligned, managers and employees reviewed individual job descriptions. Each job description was tailored so that individual job responsibilities were clear and contributed to meeting the department’s and the organization’s objectives. Involving employees in this process helped them to gain a clear understanding of how their performance affected the department and, in turn, the organization. Finally, based on the key responsibilities identified, the performance management system included behaviors, results, and developmental plans. For example, each employee record included information on various responsibilities, standards expected, goals to be reached, and actions to be taken to improve performance in the future. A summary of the entire process implemented at Key Bank of Utah is shown in Figure 3.2. What happened after Key Bank of Utah implemented this system? In general terms, Key Bank was able to enjoy several positive consequences of aligning corporate, departmental, and individual goals. After the implementation of its new performance management system, Key Bank found several meaningful benefits, including the following: • Managers knew that employees were focused on meeting important goals. • Employees had more decision-making power. • Lower-level managers had a better understanding of higher-level managers’ decisions. • Communication increased and improved (among managers, between managers and employees, etc.). Figure 3.2 Summary of Alignment of Performance Management and Strategic Plan at Key Bank of Utah In sum, to be most useful, organizations’ performance management systems must rely on their strategic plans. The behaviors, results, and developmental plans of all employees must be aligned with the vision, mission, goals, and strategies of the organization and unit. Organizations can expect greater returns from implementing a performance management system when such alignment is in place. 3.2.1 Strategic Planning The development of an organization’s strategic plan requires a careful analysis of the organization’s competitive situation, the organization’s current position and destination, the development of the organization’s strategic goals, the design of a plan of action and implementation, and the allocation of resources (human, organizational, physical) that will increase the likelihood of achieving the stated goals.6 There are several steps that must be considered in the creation of a successful strategic plan. These include (1) the conduct of an environmental analysis (i.e., the identification of the internal and external parameters of the environment in which the organization operates); (2) the creation of an organizational mission (i.e., statement of what the organization is all about); (3) the creation of an organizational vision (i.e., statement of where the organization intends to be in the long term, say, about 10 years); (4) setting goals (i.e., what the organization intends to do in the short term, say, one to three years); and (5) the creation of strategies that will allow the organization to fulfill its mission and vision and achieve its goals (i.e., descriptions of game plans or how-to procedures to reach the stated objectives). After each of these issues has been defined, organizational strategies are created so that the mission and vision are fulfilled and the stated goals are met. The strategic planning process is not linear, however. For example, there may first be a rough draft of the organization’s mission and vision and then the conduct of an environmental analysis may follow to help define the mission and vision more clearly. In other words, the mission and vision may be drafted first and the environmental analysis may follow second. The important point is that there is a constant interplay among these issues: the vision and mission affect the type of environmental analysis to be conducted, and the results of an environmental analysis are used to revise the mission and vision. By necessity, we need to discuss them one by one; however, keep in mind that they affect and inform each other on an ongoing basis. Let’s begin with a discussion of environmental analysis. 3.2.1.1 Environmental Analysis The first step in conducting a strategic plan is to step back to take in the “big picture.” This is accomplished through what is called an environmental analysis. An environmental analysis identifies external and internal parameters with the purpose of understanding broad issues related to the industry where the organization operates so that decisions can be made against the backdrop of a broader context.7 An examination of the external environment includes a consideration of opportunities and threats. Opportunities are characteristics of the environment that can help the organization succeed. Examples of such opportunities might be markets not currently being served, untapped labor pools, and new technological advances. On the other hand, threats are characteristics of the external environment that can prevent the organization from being successful. Examples of such threats range from economic recession to the innovative products of competitors. For example, consider the case of Frontier, which is currently the second largest jet carrier at Denver International Airport with an average of 250 daily departures and arrivals. Frontier is an affordable-fare airline which provides service to 60 cities, 50 in the United States, 8 in Mexico, and 2 in Canada. Frontier commenced operations in July 1994 given two key opportunities in the external environment. First, a major competing airline engaged in a dramatic downsizing of its Denver operations, leading to service gaps in various major markets that Frontier filled. Second, the city of Denver replaced the heavily congested Stapleton Airport with the much larger Denver International Airport.8 In February 2004, United Airlines, the largest carrier operating out of Denver International Airport, made changes in the environment that may have had a direct impact on Frontier’s strategic plan: United Airlines launched its own low-fare affiliate. The new affiliate, Ted, is going toe-to-toe with Frontier. Peter McDonald, vice president for operations for United Airlines, reported that Ted’s cost per available seat mile is in the ballpark of Frontier’s 8.3 cents.9 So, what had been an opportunity for Frontier may no longer remain one, given the launching of Ted. The following is a nonexhaustive list of external factors that should be considered in any environmental analysis: • Economic. For example, is there an economic recession on the horizon? Or, is the current economic recession likely to end in the near future? How would these economic trends affect our business? • Political/legal. For example, how will political changes in domestic or international markets we are planning on entering affect our entry strategy? • Social. For example, what is the impact of an aging workforce on our organization? • Technological. For example, what technological changes are anticipated in our industry and how will these changes affect how we do business? • Competitors. For example, how do the strategies and products of our competitors affect our own strategies and products? Can we anticipate our competitors’ next move? • Customers. For example, what do our customers want now, and what will they want in the next five years or so? Can we anticipate such needs? • Suppliers. For example, what is the relationship with our suppliers now and is it likely to change, and in what way, in the near future? Although an examination of external trends is important for all types of organizations, this issue is particularly important for multinational organizations because they are concerned with both domestic and international trends. In fact, monitoring the external environment is so important in the strategic planning of multinational organizations that a survey of U.S. multinational corporations showed that 89% of departments responsible for the assessment of the external environment report directly to a member of the board of directors.10 An examination of the internal environment includes a consideration of strengths and weaknesses. Strengths are internal characteristics that the organization can use to its advantage. For example, what are the organization’s assets and the staff’s key skills? At Frontier, several key executives from other airlines were recruited, an important strength that was considered before launching the airline in 1994. These executives created a senior management team with long-term experience in the Denver market. Weaknesses are internal characteristics that are likely to hinder the success of the organization. These could include an obsolete organizational structure that does not allow for effective organization across units and creates the misalignment of organizational-, unit-, and individual-level goals. The following is a nonexhaustive list of internal issues that should be considered in any environmental analysis: • Organizational structure. For example, is the current structure conducive to fast and effective communication? • Organizational culture. Organizational culture includes the unwritten norms and values espoused by the members of the organization. For example, is the current organizational culture likely to encourage or hinder innovation and entrepreneurial behaviors on the part of middle-level managers? • Politics. For example, are the various units competing for resources in such a way that any type of cross-unit collaboration is virtually impossible? Or, are units likely to be open and collaborative in cross-unit projects? • Processes. For example, are the supply chains working properly? Can customers reach us when they need to and receive a satisfying response when they do? • Size. For example, is the organization too small or too large? Are we growing too fast? Will we be able to manage growth (or downsizing) effectively? Table 3.2 includes a summary list of internal and external trends to be considered in conducting an environmental analysis. Think about your current employer (or last employer, if you are not currently employed). Take a look at Table 3.2. Where does your organization stand in regard to each of these important internal and external issues? Regarding the external issues, what are some of the opportunities and threats? Regarding the internal issues, what are some of the strengths and weaknesses? After external and internal issues have been considered, information is collected regarding opportunities, threats, strengths, and weaknesses. This information is used to conduct a gap analysis, which analyzes the external environment in relation to the internal environment. The pairing of external opportunities and threats with internal strengths and weaknesses leads to the following situations (ranked from most to least competitive): 1. Opportunity + Strength = Leverage. The best combination of external and internal factors occurs when there is an opportunity in the environment and a matching strength within the organization to take advantage of that opportunity. These are Table 3.2 Trends to Consider in Conducting an Environmental Analysis Internal External Organizational structure Economic Organizational culture Political/legal Politics Social Processes Technological Size Competitors Customers Suppliers obvious directions that the organization should pursue. Consider the case of IBM, the world’s largest information technology company as well as the world’s largest business and technology services provider (US$ 36 billion). In the past few years, IBM has concluded that the PC-driven client-server computing model no longer applies and that network-based computing is taking over. This realization shifted the focus to servers, databases, and software for transaction management. Furthermore, IBM recognized the upsurge of network-connected devices including personal digital assistants (PDAs), cell phones, and video game systems. To take advantage of this external opportunity, IBM now focuses its resources on supporting network systems, developing software for the network-connected devices, and manufacturing specialized components. IBM has also improved its server technology and revamped its storage systems. IBM built up its software capabilities through internal development and outside acquisitions. In short, IBM developed a leverage factor by identifying internal strengths that matched external opportunities, which in turn leads to a successful business model. 2. Opportunity + Weakness = Constraint. In a constraint situation, the external opportunity is present; however, the internal situation is not conducive to taking advantage of the external opportunity. At IBM, this situation could have taken place if IBM did not have the internal capabilities to develop software for the network-connected devices and specialized components. The external opportunity would still be there but, absent the internal capabilities, it would not turn into an advantageous business scenario. 3. Threat + Strength = Vulnerability. In this situation, there is an external threat, but this threat can be contained because of the presence of internal strengths. If this had been the case at IBM, the company would not have been able to take advantage of a new situation; nevertheless, existing strengths would have allowed IBM to continue to operate in other areas. 4. Threat + Weakness = Problem. In the worst scenario, there is an external threat and an accompanying internal weakness. For example, in the 1980s, IBM refused to adapt to the demands of the emerging microcomputer market (i.e., today’s PCs). IBM did not have the internal capability to address customers’ needs for PCs and instead continued to focus on its internal strength: the mainframe computer. IBM’s poor performance in the early 1990s was a direct consequence of this problem situation: the external threat (increasing demand for PCs and dwindling demand for mainframe computers) was met with an internal weakness (the lack of ability to shift internal focus from the mainframe to the PC). Consider the organization you are currently working for, or the organization for which you have worked most recently. Try to identify one leverage and one problem based on an analysis of opportunities, threats, strengths, and weaknesses. What was the situation like? What were the results? In sum, the process of creating a strategic plan begins with an environmental analysis, which considers internal as well as external trends. Internal trends can be classified as either strengths or weaknesses, and external trends can be classified as either opportunities or threats. A gap analysis consists of pairing strengths and weaknesses with opportunities and threats and determining whether the situation is advantageous (i.e., leverage), disadvantageous (i.e., problem), or somewhere in between (i.e., constraint and vulnerability). 3.2.1.2 Mission After the environmental analysis has been completed and the gap analysis reveals an organization’s leverage, constraints, vulnerabilities, and problems, the members of the organization must determine who they are and what they do. This information will then be incorporated into the organization’s mission statement. The mission statement summarizes the organization’s most important reason for its existence. Mission statements provide information on the purpose of the organization and its scope. Good mission statements provide answers to the following questions: • Why does the organization exist? • What is the scope of the organization’s activities? • Who are the customers served? • What are the products or services offered? Consider the mission statement for the Coca-Cola Company: Everything we do is inspired by our enduring mission: • To Refresh the World ... in body, mind, and spirit. • To Inspire Moments of Optimism ... through our brands and our actions. • To Create Value and Make a Difference ... everywhere we engage.11 Presumably, this mission statement was preceded by an environmental analysis examining internal and external trends. We do not have information on this. What we do know is that this mission statement provides some information regarding the four questions noted earlier. Based on this mission statement, we have information about why the company exists (i.e., “to refresh the world”) and the scope of the organization’s activities (i.e., “to create value and make a difference”). The mission statement does not, however, include information about who are the customers served and what are the products and services offered. Also, there is no information about specific products (e.g., Sprite, Minute Maid, Powerade, Dasani). More specific and detailed information is needed if Coca-Cola’s mission statement is to be used by its various units to create their own mission statements. More detailed information is also needed if both the organization and unit mission statements will be used as input for individual job descriptions and for managing individual and team performance. In general, thorough mission statements include the following components: • Basic product or service to be offered (does what?) • Primary markets or customer groups to be served (to whom?) • Unique benefits and advantages of products or services (with what benefits?) • Technology to be used in production or delivery • Fundamental concern for survival through growth and profitability Mission statements also typically include information about the organization’s values and beliefs, including: • Managerial philosophy of the organization • Public image sought by the organization • Self-concept of business adopted by employees and stockholders In sum, a mission statement defines why the organization exists, the scope of its activities, the customers served, and the products and services offered. Mission statements also include specific information, such as the technology used in production or delivery, and the unique benefits or advantages of the organization’s products and services. Finally, a mission statement can include a statement of values and beliefs, such as the organization’s managerial philosophy. 3.2.1.3 Vision An organization’s vision is a statement of future aspirations. In other words, the vision statement includes a description of what the organization would like to become in the future (about 10 years in the future). Vision statements are typically written after the mission statement is completed because the organization needs to know what it is and what its purpose is before they can figure out who they will be in the future. Note, however, that mission and vision statements are often combined and, therefore, in many cases it is difficult to differentiate one from the other. In such cases, the vision statement usually includes two components: a core ideology, which is referred to as the mission, and an envisioned future, which is what is referred to as the vision per se. The core ideology contains the core purpose and core values of an organization, and the envisioned future specifies long-term objectives and a picture of what the organization aspires to. Spectrum Brands (formerly Rayovac Corporation) provides an example of combining mission and vision into one statement. Spectrum Brands is a global consumer products company and a leading supplier of batteries, kitchen appliances, shaving and grooming products, personal care products, pet supplies, and home and garden products. Originally founded in 1906 as the French Battery Company in Madison, Wisconsin, and renamed Rayovac Company during the 1930s, the company changed its name to Spectrum Brands in 2005 to reflect its diverse portfolio and position as a publicly-held company which employs 10,000 individuals worldwide. Spectrum Brands’ combined mission and vision statement is the following: • Spectrum Brands is a rapidly growing, global, diversified, market-driven consumer products company. • We will continue to grow our company through a combination of strategic acquisitions and organic growth. • We will strengthen our brands and generate growth through emphasis on brand strategy/marketing and innovative product technology, design and packaging. • We will leverage IT infrastructure, distribution channels, purchasing power and operational structure globally to continue to drive efficiencies and reduce costs. • We will profitably expand distribution in all served markets. This statement includes components of a mission statement (i.e., “a rapidly growing, global, diversified, market-driven consumer products company”) as well as components of a vision statement (e.g., “will strengthen our brands and generate growth through emphasis on brand strategy/marketing and innovative product technology, design and packaging”). This statement combines the present (i.e., who the company is, what it does) with the future (i.e., aspirations). Other organizations make a more explicit differentiation between the mission and vision statements. Consider the vision statement for Greif, a global company headquartered in Delaware, Ohio, with approximately 16,000 employees providing industrial packaging products and services in more than 55 countries in Africa, Asia, Australia, Europe, the Middle East, North America, and South America.13 Greif reported US$ 3.5 billion in net sales for the fiscal year that ended October 31, 2010. Greif’s vision statement is the following: Vision Statement • One Company Though we encourage and embrace our diversity of language, location, business and origin, we are one company: Greif. • One Mission We provide the packaging that gives ultimate value to our customers. • One Vision We will be the best packaging company in the world, working in true partnership with our customers, our suppliers, and among ourselves. Our Core Values • Our people are our past, present, and future We will honor The Greif Way, building upon our rich history as a special place to work. We will operate within a culture of integrity, character, and respect. We will maintain a safe working environment. We will attract and cultivate a responsible, competent, efficient, and empowered workforce. We will provide opportunities to excel. We will communicate. We will listen. • Our customers are our reason for being We will keep our promises to our customers. We will be synonymous with quality and service. We will solve their packaging challenges. We will prove the value of our relationship by being the best at what we do. • Our products are our livelihood We will be a low-cost manufacturer and the high-value supplier in our business segments. We will innovate, using our ingenuity and creativity to provide better solutions. We will maintain our focus on where we can be the best and apply our expertise to do it better. • Our shareholders are our support We will conduct our business ethically and with transparency. We will establish rigorous financial goals that will drive our business decisions and measure our progress. We will strive to attain a superior rate of return and maintain trust with our investors. • Our stage is the world. Our communities and the environment are our backdrop We will be a conscientious global citizen, a responsive community neighbor, and a responsible steward of the earth’s natural resources. Greif’s vision statement is clearly future oriented. It provides direction and focus. In addition, it includes several features that are required of useful vision statements. First, it focuses attention on what is most important and thus eliminates unproductive activities. Second, it provides a context from which to evaluate new external opportunities and threats. For example, the vision statement indicates that new opportunities for profitable growth in the industrial packaging and services business should be pursued. In addition, good vision statements have the following characteristics, not all of which are present in Greif’s vision statement: • Brief. A vision statement should be brief so that employees can remember it. • Verifiable. A good vision statement should be able to stand the reality test. For example, how can we verify if Greif indeed becomes “one of the most desirable companies to work for in our industries, focusing on establishing a work atmosphere in which our employees can excel”? • Bound by a timeline. A good vision statement specifies a timeline for the fulfillment of various aspirations. • Current. Outdated vision statements are not useful. Vision statements should be updated on an ongoing basis, ideally as soon as the old vision is fulfilled. • Focused. A good vision statement is not a laundry list of aspirations, but rather focuses on just a few (perhaps not more than three or four) aspects of an organization’s performance that are important to future success. • Understandable. Vision statements need to be written in a clear and straightforward manner so that they are understood by all employees. • Inspiring. Good vision statements make employees feel good about their organization’s direction and motivate them to help achieve the vision. • A stretch. Consider Microsoft’s vision statement of “putting a computer on every desk and in every home,” which was the vision when CEO Bill Gates started the MS-DOS operating system in the 1980s. This vision statement was such a stretch that it was considered ludicrous at a time when the mainframe computer still reigned supreme and the first minicomputer models (now PCs) were being made and sold. But that vision is now a reality. Microsoft has come up with a new vision: “putting a computer in every car and every pocket.”14 In sum, a vision statement includes a description of future aspirations. Whereas the mission statement emphasizes the present, the vision statement emphasizes the future. Table 3.3 includes a list of the features that should be present in a good vision statement. Think about your current employer (or last employer, if you are not currently employed). Take a look at Table 3.3. How many of these features are reflected in your organization’s vision statement? 3.2.1.4 Goals After an organization has analyzed its external opportunities and threats as well as internal strengths and weaknesses and has defined its mission and vision, it can realistically establish goals that will further its mission. The purpose of setting such goals is to formalize statements about what the organization hopes to achieve in the medium- to long-range period (i.e., within the next three years or so). Goals provide more specific information regarding how the mission will be implemented. Goals can also be a source of motivation and provide employees with a more tangible target for which to strive. Goals also provide a good basis for making decisions by keeping desired outcomes in mind. And, finally, goals provide the basis for performance measurement because they allow for a comparison of what needs to be achieved versus what each unit, group, and individual is achieving. Consider the case of Harley-Davidson, Inc., the motorcycle manufacturer. In January 2004, Jeffrey L. Bleustein, chairman and chief executive officer, said that the expectation was to continue to grow the business. Specifically, he said that the new goal was to satisfy a yearly demand of 400,000 Harley-Davidson motorcycles in 2007. Moreover, he also said that he was confident that Harley-Davidson, Inc., would be able to deliver an earnings growth rate in the mid-teens for the foreseeable future.15 These goals provide a clear direction for Harley-Davidson. In fact, they provide useful information to guide unit-level goals as well as individual and team performance. The entire organization has a clear sense of focus because all members know that there is a goal to deliver 400,000 motorcycles in 2007 Table 3.3 Characteristics of Good Vision Statements Brief Verifiable Bound by a timeline Current Focused Understandable Inspiring A stretch 3.2.1.5 Strategies At this point, we know what the organization is all about (mission), what it wants to be in the future (vision), and some intermediate steps to follow to get there (goals). What remains is a discussion of how to fulfill the mission and vision and how to achieve the stated goals. This is done by creating strategies, which are descriptions of game plans or how-to procedures to reach the stated objectives. The strategies could address issues of growth, survival, turnaround, stability, innovation, and leadership, among others. Box 3.1 Linking Performance Management to the Company’s Vision at Loop Customer Management At Loop Customer Management (http://www.loop.co.uk) a new direction and a new company vision statement included the alignment with an effective performance management system. Loop Customer Management is part of the United Kingdom-based Kelda Group. The company provides clients with managed customer services, contact centers, and collection services. In 2001 the company moved from being part of a utility company to becoming an outsourced provider of services. With this change, a new vision was created which centered around the phrase “great customer experiences through great people.” The company then sought to create a performance management system that would align the staff skills and behaviors to this new vision. Based on the need to focus on customer service as primary to success, Loop sought to define, measure, and reward the best service behaviors. The process meant identifying the specific behaviors that create a quality customer interaction and incorporating those behaviors into performance appraisals and reward systems. Creating behavioral statements allowed employees to have a clear understanding of how their work linked directly to the company’s vision. In summary, Loop Customer Management provides an example of how a performance management system can align with a vision statement to bring about organizational change and execution of a business strategy.16 The human resources (HR) function plays a critical role in creating and implementing the strategies that will allow the organization to realize its mission and vision. Specifically, the HR function can make the following contributions: • Communicate knowledge of strategic plan. The HR function can be a good conduit to communicate the various components of the strategic plan (e.g., mission, vision, and goals) to all the employees. • Outline knowledge, skills, and abilities (KSAs) needed for strategy implementation. The HR function, through job analyses and the resulting job descriptions, serves as a repository of knowledge regarding what KSAs are needed for a successful implementation of the strategic plan. Thus, the HR function is in a unique situation to provide information about whether the current workforce has the KSAs needed to support the strategic plan and, if not, to offer suggestions about what types of employees should be hired and what types of plans should be put in place to develop the needed KSAs internally. • Propose reward systems. The HR function can provide useful information on what type of reward system should be implemented to motivate employees to support the strategic plan. 3.2.2 Developing Strategic Plans at the Unit Level As shown in Figure 3.1, the organization’s strategic plan has a direct impact on the units’ strategic plans. The case of Key Bank of Utah described earlier illustrates how the branch administration division had a mission statement that was aligned with the overall organizational mission statement. Similarly, the vision statement, goals, and strategies of the various units need to be congruent with the overall organizational vision, goals, and strategies. Consider the case of Microsoft Corporation’s mission statement:17 • Our Mission At Microsoft, we work to help people and businesses throughout the world realize their full potential. • Our Values As a company, and as individuals, we value: o Integrity, honesty, openness, personal excellence, constructive self-criticism, continual self-improvement, and mutual respect. o We are committed to our customers and partners and have a passion for technology. o We take on big challenges, and pride ourselves on seeing them through. We hold ourselves accountable to our customers, shareholders, partners, and employees by honoring our commitments, providing results, and striving for the highest quality. Now, consider the mission statement of one of Microsoft’s units, Training and Education: With the charter to enable Microsoft engineering workgroups to realize their full potential for innovation and performance through world-class learning strategies, Microsoft Training and Education (MSTE) provides performance support strategies to support the overall corporation’s software engineering efforts. Our efforts include the design, development, and delivery of learning programs, on-line information, and resources for Microsoft employees. MSTE’s integrated suite of technical offerings supports our goal of having a significant impact on Microsoft’s business. We promote best practices, cross-group communication, Microsoft expertise and Industry expertise. As you can see, the mission of the training and education unit is consistent with the overall mission in that the realization of full potential plays a central role. Of course, MSTE’s mission is more focused on issues specifically relevant to the training and education function. Nevertheless, the link between the two mission statements is readily apparent. The congruence between the mission of the organization and its various units is important regardless of the type of industry and the size of the organization. High-performing organizations have a clear alignment in the mission and vision of the overall and unit-level mission and vision statements. Consider the case of Norfolk State University (NSU, http://www.nsu.edu/), located in Norfolk, Virginia. NSU, with a current enrollment of about 6,000 students, is the seventh-largest historically African American university in the United States, and it serves many students who are the first in their families to attend college. It offers more than 50 academic programs, including 16 master’s, and 2 doctoral degree programs. NSU has five main schools: School of Business, School of Education, School of Liberal Arts, School of Social Work, and School of Science and Technology. The university’s mission statement is the following: To provide an affordable, high-quality education for an ethnically and culturally diverse student population, equipping them with the capability to become productive citizens who continuously contribute to a global and rapidly changing society.18 The mission statement for the School of Business indicates that its goal is to prepare students for careers in all types of organizations and this is achieved in a learning environment that fosters academic achievement, professional growth, and a recognition of diversity, technology, globalization, and ethics in the workplace and society.19 Note that both mission statements are aligned and refer to similar issues including the (1) delivery of a high-quality education and academic achievement to a (2) diverse student body with the goal of (3) educating productive citizens who will contribute to a (4) global society. In sum, the organization’s strategic plan including the mission, vision, goals, and strategies cascades down to all organizational levels. Thus, each division or unit also creates its own strategic plan, which should be consistent with the organization’s overall plan. 3.2.2.1 Consensus About Strategies and Goals Across Organizational Units Strategic consensus occurs when the various organizational units agree on a common set of strategic priorities. Although it may seem that the greater the consensus across units, the better firm performance, this is not always the case because we must differentiate between consensus regarding strategies and consensus regarding goals. In the early development of strategic management as a field, the dominant approach was for a firm to focus first on goals, and then create strategies on how to compete. This process has been described as “formal,” “normative,” or “grand strategy.” A more recent way of thinking about consensus within the context of strategic planning has been influenced by the industrial organization perspective from economics. This perspective argues that a firm must first agree on a strategy (e.g., low cost or differentiation), and then subsequently decide on goals. These two alternative sequences, strategies Æ goals versus goals Æ strategies, were contrasted against each other in a study involving the heads of purchasing and manufacturing of more than 100 manufacturing companies in Spain. Results suggested that the strategies Æ goals sequence was superior in terms of predicting firm performance. In sum, it is beneficial for the cascading of strategic planning to first have units agree on common strategies before they agree on what goals will be set to reach those strategic priorities.20 3.2.3 Job Descriptions Continuing with the sequence of components shown in Figure 3.1, job descriptions also need to be congruent with the organization and unit mission, vision, goals, and strategies. We discussed the job analysis process leading to the creation of job descriptions in Chapter 2. After the strategic plan is completed, some rewriting of the existing job descriptions may be in order. Recall the job description for Trailer Truck Driver as used by the Civilian Personnel Management Service (U.S. Department of Defense) (see the accompanying box). This description provides information about the various tasks performed together with a description of some of the KSAs required for the position. But what is the link with the organization and unit strategic plans? How do the specific tasks make a contribution to the strategic priorities of the transportation division and the organization as a whole? This description includes only cursory and indirect information regarding these issues. For example, one can assume that the proficient handling of bills of lading, expense accounts, and other papers pertinent to the shipment contributes toward a smooth shipping operation and, therefore, makes a contribution to the transportation division. However, this link is not sufficiently clear. On the other hand, consider a job announcement describing the position of Performance Solutions Group Manager in Microsoft’s training and education unit (see the accompanying box). This job description makes the link between the individual position and MSTE quite clear. First, the description includes MSTE’s mission statement so that individuals become aware of how their specific roles fit within the overall mission of the department. Second, the job description includes language to the effect that the work must lead to an “industry leading” product, which is consistent not only with MSTE’s mission but also with Microsoft’s overall mission. Third, in the needed qualifications section, there is a clear overlap between those needed for this specific position and those mentioned in MSTE’s as well as in Microsoft’s overall mission. In short, the person working as Performance Solutions Group Manager has a clear sense not only of her position but also of how behaviors and expected results are consistent with expectations about MSTE and Microsoft in general. In sum, the tasks and KSAs included in individual job descriptions must be congruent with the organization’s and unit’s strategic plans. In other words, job descriptions should include activities that, if executed well, will help execute the mission and vision. Job descriptions that are detached from strategic priorities will lead to performance evaluations focused on behaviors and results that are not central to an organization’s success. 3.2.4 Individual and Team Performance Finally, the performance management system needs to motivate employees to display the behaviors and produce the results required to support the organization’s and the unit’s mission, vision, and goals. Developmental plans need to be aligned with unit and organizational priorities as well. Well-designed performance management systems define a clear path from organizational mission, vision, and goals to individual and team performance. This is critical because organizational success is a direct function of the alignment between collective and individual objectives. In addition to serving as a necessary guide for individual and team performance, knowledge of organization- and unit-level mission and vision provides information about how to design the performance management system. Specifically, there are many choices in how the system is designed. For example, the system might place more emphasis on behaviors (i.e., processes) than on results (i.e., outcomes), or the system might emphasize more short-term criteria (i.e., quarterly goals) than long-term criteria (triennial). Some of these choices are presented in Table 3.4. Knowledge of the organization and unit vision and mission allows the HR function to make informed decisions about design choices. More detailed information on each of the factors guiding each of these design choices is provided in subsequent chapters. For now, as one illustration, assume an organization is producing a mature product in a fairly stable industry. In this situation, an emphasis on behaviors rather than results may be preferred because the relationship between processes and outcomes is well known, and the top priority is that employees display reliable and consistent behaviors in making the product. Regardless of the type of criteria used, be it behaviors or results, these must be observable (i.e., the person rating the criteria needs to have the ability to observe what is rated) and verifiable (i.e., there needs to be evidence to confirm the criteria rated). As a second example, consider the actual case of Dell computers. Dell is one of the top players in the personal computer industry through its mode of online direct selling. Dell’s main strategic business strategy is to be a low-cost leader in an industry that deals with a product that is increasingly regarded as a commodity. However, in addition to a low-cost strategy, Dell has a customer relationship business strategy of maintaining customer service at a high level, while reducing costs. Dell’s performance management system provides a strong link between individual goals and organizational performance by including a results component (i.e., cost) and a behavioral component (i.e., customer service).21 At Dell, both low cost and high levels of customer service (for both internal and external customers) are important dimensions of the performance management system. Also, the system is strongly linked not only to the strategic objectives (i.e., low cost and high levels of customer service) but also to the organization’s “winning culture” (i.e., achievement of personal and business objectives through its focus on interaction between managers and team members). In summary, the criteria measured in the performance management system are behaviors or results (or both) that must be relevant to the unit and the organization. Performance criteria need to make a contribution to the strategic priorities. It is unlikely that a performance management system will make an important contribution to the organization’s bottom line if (1) there is no clear sense of direction about where the organization and unit are going, or (2) there is a clear sense of direction but this information is not reflected in the job descriptions and the actual behaviors and results measured. Box 3.2 Job Description for Trailer Truck Driver: Civilian Personnel Management Service, U.S. Department of Defense Operates gasoline or diesel powered truck or truck tractor equipped with two or more driving wheels and with four or more forward speed transmissions, which may include two or more gear ranges. These vehicles are coupled to a trailer or semi-trailer by use of a turntable (fifth wheel) or pintle (pivot) hook. Drives over public roads to transport materials, merchandise, or equipment. Performs difficult driving tasks such as backing truck to loading platform, turning narrow corners, negotiating narrow passageways, and keeping truck and trailer under control, particularly on wet or icy highways. May assist in loading and unloading truck. May also handle manifest, bills of lading, expense accounts, and other papers pertinent to the shipment. Box 3.3 Job Description for Performance Solutions Group Manager at Microsoft The Performance Solutions Group Manager is accountable for developing and delivering on a portal strategy that touches over 20,000 employees worldwide and involves a complex data delivery system. Additionally, the person is responsible for defining the cutting-edge tool suite used by the team to develop and maintain the portal, the content housed by the group, and all e-learning solutions. Key initiatives include redesigning the Engineering Excellence Guide within the next 6 months and evolving it over the next 18 months to 3 years to become the industry leading performance support site. Key challenges include maintaining and managing the cutting-edge tool suite used by the team and driving a clear vision for an industry leading portal and content delivery plan. Qualifications for this position are a minimum of five years of senior management experience, preferably in knowledge management, e-learning, or Web-based product development roles; ability to think strategically and exercise sound business judgment on behalf of Microsoft; excellent leadership, communication, interpersonal, and organizational skills; firsthand experience delivering/shipping Web-based learning and content management solutions; proven record of successful team management; and ability to work well independently and under pressure, while being flexible and adaptable to rapid change. Knowledge of performance support and training procedures, standards, and processes is preferred. With the charter to enable Microsoft engineering workgroups to realize their full potential for innovation and performance through world-class learning strategies, Microsoft Training and Education (MSTE) provides performance support strategies to support the overall corporation’s software engineering efforts. Our efforts include the design, development, and delivery of learning programs, online information, and resources for Microsoft employees. MSTE’s integrated suite of technical offerings supports our goal of having a significant impact on Microsoft’s business. We promote best practices, cross-group communication, Microsoft expertise and Industry expertise. Table 3.4 Some Choices in Performance Management System Design Criteria: Behavioral criteria vs. results criteria Participation: Low employee participation vs. high employee participation Temporal dimension: Short-term criteria vs. long-term criteria Level of criteria: Individual criteria vs. team/group criteria System orientation: Developmental orientation vs. administrative orientation Rewards: Pay for performance (i.e., merit-based) vs. pay for tenure/position 3.3 Building Support Given the many competing projects and the usual scarcity of resources, some organizations may be reluctant to implement a performance management system. Primarily, the reason is a lack of any perceived value added to a system that requires many resources (particularly time from supervisors) and that seems to produce little tangible payoffs. The need to align organization and unit priorities with the performance management system is one of the key factors contributing to obtaining the much-needed top management support for the system. Top management is likely to ask, “Why is performance management important?” One answer to this question is that performance management is the primary tool that will allow top management to carry out its vision. The performance management system, when aligned with organization and unit priorities, is a critical tool to (1) allow all employees to understand where the organization stands and where it needs to go and (2) provide tools to employees (e.g., motivation, developmental resources) so that their behaviors and results will help the organization get there. Fundamentally, the implementation of any performance management system requires that the “What’s in it for me?” question be answered convincingly. In the case of top management, the answer to the “What’s in it for me?” question is that performance management can serve as a primary tool to realize its vision. Building support for the system does not stop with top management, however. All participants in the system need to understand the role they play and receive a clear answer to the “What’s in it for me?” question. Communication about the system is key. This includes a clear description of the system’s mechanics (e.g., when the performance planning meetings will take place, how to handle disagreements between supervisor and employees) and the system’s consequences (e.g., relationship between performance evaluation and rewards). As discussed in Chapter 1, not involving people in the process of system design and implementation can create resistance, and the performance management system may result in more harm than good. Consider the role that good communication played in the launching of a revamped performance management system at Bankers Life and Casualty (http://www.bankerslife.com), an insurance company specializing in insurance for seniors and headquartered in Chicago. In November 2000, Edward M. Berubewas appointed as its new president and CEO. Berube understood that Bankers Life and Casualty was facing important challenges, including new customer demands, the impact of the Internet, outsourcing, and increased competition. So, Bankers Life and Casualty engaged in a very aggressive marketing campaign, which included retaining actor Dick Van Dyke as its company spokesperson. In spite of these efforts, however, internal focus groups revealed that while employees understood the organization’s strategic plan, they did not understand what role each person was supposed to play in helping the organization execute its strategy. In other words, employees did not have a clear understanding of how each person could help achieve the organization’s strategic goals, including focusing on the following three key areas: (1) distribution scope, scale, and productivity; (2) home office productivity and unit costs; and (3) product revenue and profitability. Bankers Life and Casualty realized that a better link between strategy and individual and team performance could be established by improving its performance management process. The HR department, therefore, proceeded to overhaul the performance management system so that the three areas of strategic importance just outlined would be part of everyone’s performance evaluation and improvement efforts. The design and implementation of the new system was a joint venture between the HR and the communications departments. First, the HR and communications team spoke candidly with the CEO about his expectations. The CEO responded with overwhelming support, stating that the performance management system would be implemented for every employee on preestablished dates, and that he would hold his team accountable for making this happen. Then, to implement the performance management system, each unit met with its VP. During these meetings, each VP discussed how his or her unit’s goals were linked to the corporate goals. Next, HR and communications led discussions surrounding goal setting, giving feedback, and writing developmental plans. Managers were then given the opportunity to share any feedback, concerns, or questions that they had about the program. During this forum, managers exchanged success stories and offered advice to one another. These success stories were then shared with the CEO. The CEO then shared these stories with those who reported directly to him to strengthen the visibility of his support for the program. In short, the performance management system at Bankers Life and Casualty helped all employees understand their contributions to the organization’s strategic plan. This was a key issue that motivated the CEO to give unqualified support to the system. This support gave a clear message to the rest of the organization that the performance management system was an important initiative. The support of the CEO and other top executives, combined with a high degree of participation from all employees and their ability to voice concerns and provide feedback regarding the system, was a critical factor in the success of the performance management system at Bankers Life and Casualty. Summary Points • Strategic planning involves defining the organization’s present and future identity. The overall purpose of a strategic plan is to serve as a blueprint that allows organizations to allocate resources in a way that provides the organization with a competitive advantage. • Strategic planning serves several purposes, including defining an organization’s identity, preparing for the future, analyzing the environment, providing focus, creating a culture of cooperation, generating new options, and serving as a guide for the daily activities of all organizational members. • Performance management systems must rely on the strategic plan to be useful. The behaviors, results, and developmental plans of all employees must be aligned with the vision, mission, goals, and strategies of the organization and unit. • The process of creating a strategic plan begins with an environmental analysis, which considers internal (e.g., organizational structure, processes) as well as external (e.g., economic, technological) trends. Internal trends can be classified as either strengths or weaknesses, and external trends can be classified as either opportunities or threats. A gap analysis consists of pairing strengths and weaknesses with opportunities and threats and determining whether the situation is advantageous (i.e., leverage), disadvantageous (i.e., problem), or somewhere in between (i.e., constraint and vulnerability). • The second step in creating a strategic plan is to write a mission statement based on the results of the gap analysis. A mission statement defines why the organization exists, the scope of its activities, the customers served, and the products and services offered. Mission statements also include information about what technology is used in production or delivery, and the unique benefits or advantages of the organization’s products and services. Finally, a mission statement can include a statement of values and beliefs, such as the organization’s managerial philosophy. • The third component of a strategic plan is the vision statement, which includes a description of future aspirations. Whereas the mission statement emphasizes the present, the vision statement emphasizes the future. In many cases, however, the mission and vision statements are combined into one statement. For vision statements to be most useful they must be brief, verifiable, bound by a timeline, current, focused, understandable, inspiring, and a stretch. • After the mission and vision statements are created, the next step in the strategic planning process is to generate specific goals that will help fulfill the mission and vision. Goals provide more specific information regarding how the mission and vision will be implemented. Typically, goals span a five-year period. • The final step in the strategic planning process is to identify strategies that will help achieve the stated goals. These strategies are game plans and usually address issues surrounding growth, survival, turnaround, stability, innovation, and leadership. The HR department plays an important role in identifying strategies because its members have knowledge of the organization’s mission and vision as well as the organization’s internal capabilities, or what is called an organization’s human capital. • The organization’s strategic plan, including the mission, vision, goals, and strategies, cascades down to all organizational levels. Thus, each division or unit also creates its own strategic plan, which should be consistent with the organization’s overall plan. The most effective sequence for doing so is for the units to first agree on common strategies and then specify unit-level goals. • The tasks and KSAs included in individual job descriptions must be congruent with the organization’s and unit’s strategic plans. In other words, job descriptions should include activities that, if executed well, will in turn help execute the mission and vision. Job descriptions that are detached from strategic priorities will lead to performance evaluations focused on behaviors and results that are not central to an organization’s success. • The various choices in designing the performance management system are directly affected by an organization’s strategic plan. Different missions and visions lead to different types of systems, for example, emphasizing behaviors (e.g., processes) as opposed to results (e.g., outcomes). • Top management must be aware that the performance management system is a primary tool to execute an organization’s strategic plan. This awareness will lead to top management’s support for the system. In addition, all organizational members need to be able to answer the “What’s in it for me?” question regarding the system. Implementing the performance management system will require considerable effort on the part of all those involved. Those doing the evaluation and those being evaluated should know how the system will benefit them directly. Case Study 3-1 Evaluating Vision and Mission Statements at PepsiCo Consider the mission and vision statements for PepsiCo (http:// www.pepsico.com/Company.html) and then answer the questions included below: PepsiCo’s Mission Statement* * PepsiCo. (2011) Our Mission and Vision. Retrieved March 3, 2011 from: http://www.pepsico.com/Company/ Our-Mission-and-Vision.html 2011, PepsiCo, Inc. Used with permission. Our mission is to be the world’s premier consumer products company focused on convenient foods and beverages. We seek to produce financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity. PepsiCo’s Vision Statement “PepsiCo’s responsibility is to continually improve all aspects of the world in which we operate—environment, social, economic—creating a better tomorrow than today.” Our vision is put into action through programs and a focus on environmental stewardship, activities to benefit society, and a commitment to build shareholder value by making PepsiCo a truly sustainable company. 1. The table below summarizes the key characteristics of ideal mission and vision statements as discussed in Chapter 3. Use the Y/N columns in the table to indicate whether each of the features is present, or not, in the mission and vision statements of PepsiCo. 2. How do the mission and vision statements relate to the eight characteristics of an ideal mission statement and the eight characteristics of an ideal vision statement? What are the gaps? 3. How useful are the mission and vision statements of PepsiCo in terms of linking organizational priorities with individual and team performance? In creating such a linkage, which ideal mission/vision statement characteristics (shown in the table above) seem to be more important than others? What other places might the HR department at PepsiCo look for information regarding how to more effectively cascade firm-level strategy to each individual’s goals? 4. Characteristics Y/N Basic product/service to be offered (does what) Primary markets or customer groups to be served (to whom) Mission statement—Summarizes the organization’s most important reason for its existence Unique benefits, features, and advantages of products/services (with what benefits) Technology to be used in production or delivery Fundamental concern for survival through growth and profitability Managerial philosophy of the firm Public image sought by organization Self-concept of business adopted by employees and stockholders Brief—so that employees can remember it Verifiable—able to stand the reality test Bound by a timeline—specifies a timeline for fulfillment of the various aspirations Current—updated on an ongoing basis Vision—Statement of future aspirations Focused—lists a few (3–4) aspects of organization’s performance that are important to future success Understandable—written in a clear and straightforward manner so that they are understood by all employees Inspiring—makes employees feel good about their organization’s direction and motivates them to help achieve the vision Stretch—goal not easily attained Case Study 3-2 Dilbert’s Mission Statement Generator Please visit Dilbert’s Web page and play the “mission statement generator” game (http://www.dilbert.com/comics/dilbert/games/career/bin/ms.cgi). Generate two different mission statements and provide a critique of the resulting statements based on whether they comply with the characteristics of an ideal statement. Because generated statements will vary, please also provide a critique of the following statement: “We strive to continually administrate timely opportunities and enthusiastically utilize enterprise-wide technology while promoting personal employee growth.” In addition, answer the following questions: 1. What are the dangers of having a flawed mission statement? 2. How does a flawed statement affect the development of a unit’s mission statement and subsequent individual job descriptions and goals? Case Study 3-3 Linking Individual with Unit and Organizational Priorities Obtain a copy of the job description for your current or most recent job. If this is not feasible, obtain a copy of a job description of someone you know. Then, obtain a copy of the mission statements for the organization and unit in question. Revise the job description so that it is aligned with the unit and organizational strategic priorities. Revisions may include adding tasks and KSAs important in the mission statement that are not already included in the job description. Case Study 3-4 Linking Performance Management to Strategy at Procter & Gamble Consider the following description of a firm-wide strategy pursued by Procter &Gamble:* * The description is adapted from the following source: Kanter, R. M. (2009, September 15) Inside Procter & Gamble’s New Values-Based Strategy. Bloomberg Businessweek. Retrieved March 3, 2011 from: http://www.businessweek.com/managing/content/sep2009/ca20090915_398234.htm Procter & Gamble (P&G), the world’s largest consumer products company, follows a fairly unique strategy: P&G appeals to the heart and cares about human needs. In other words, P&G attempts to touch and improve the lives of its consumers all over the world. As an example, take the razor-and-blade innovation pioneered by Gillette’s Himalaya team, which focuses on India but is a global group based partly in Boston, USA. The team received information about how men in India shave: about half of them use barbershops and barbers usually break double-sided blades in two and used them repeatedly, which crates unsanitary conditions. With the strategic goal of improving the lives of its customers, the team created a razor-and-blade innovation that simplified the essential features of the shaving done in barbershops. The products were a success in terms of improving both the human condition and profitability. As a second example, consider a situation in P&G Brazil, where P&G feared a shutdown due to decreased business volume. Low-income consumers were the fastest growing segment of the population, but P&G’s global premium products were too expensive for this market segment. Local P&G teams decided to live with families, scrutinized every P&G process in an attempt to reduce costs, and ended up creating an innovative products line they dubbed “basico” (for “essential” in Portuguese). The team members felt that they were doing good for the world, not just making money for the corporation. Demand immediately outpaced supply when the first “basico” products were launched, which included women’s hygiene, diapers, and greener laundry detergent. The company quickly captured market share through small neighborhood shops and premium products were lifted. The business in Brazil became a profitable global growth model, and not just for emerging countries. As a consequence, “Tide Basic” was recently introduced in the United States. In sum, P&G’s strategy inspires employees to add their hearts to their heads and aims at finding creative solutions when purpose-inspired opportunities and commercial considerations seem to collide. Imagine you are an HR executive at P&G. Given the company’s strategic orientation toward purpose and values, what would you do to help align a new performance management system with the strategic plan? How would you explain this relationship? What would you say and do to garner company-wide support for your performance management system?