The single biggest cause for low employee engagement is lack of ownership over a company’s goals. This results in a lack of understanding of the company’s goals which in turn results in a lack of alignment of employee actions to the goals of the company.
If employee actions are not aligned to company goals then your employees’ actions will not always be in the best interest of the company. This is why you see employees in retail stores who do not pay attention when you walk in. Or, worse, employees that actively berate customers.
The solution to this is to:
- Go through a rigorous process to develop your company’s mission, strategy and vision (MSV).
- Communicate it clearly and simply to all employees so that their actions are tied to your MSV.
The correct order is Mission, Strategy and Vision.
- Your mission defines your company's purpose: why you care.
- Your strategy defines what you can do about it.
- Your vision is a tangible goal based on your strategy. A north star to strive towards.
Once you’ve done this, you must communicate to your entire team. Cheatsheets are the best way to present complicated information in one place. We’ve provided one for you to use and distribute to your team.
To help you get started, we’ve distilled our proprietary MSV creation workshop into a broad do-it-yourself guide to determining your mission, strategy and vision.
Determining Your Mission
"A mission statement defines the core purpose of the organization -- why it exists. ... Unlike strategies and goals, which may be achieved over time, you never really fulfill your mission. It acts as a beacon for your work, constantly pursued but never quite reached. Consider your mission to be the compass by which you guide your organization."
Effective Mission Statements:
- Inspire Change
- Are Long Term in Nature, 100+ years
- Are Easily Understood and Communicated
Sample Mission Statements:
Crafting your Mission:
Your mission should be crafted with the input of your entire team. If it is created by the top and then handed down, your employees will not feel ownership over the mission and their engagement will be lower.
Here are a few sample questions to use as input for creating a mission statement:
- What do you think the purpose of a company's mission is?
- What do you think the purpose of a company's vision is?
- What are the 3 most important goals to you for your company in the next 12 months?
- What are the 3 most important goals to you for your company in the next 5 years?
- What are the 3 most important goals to you for your company in the next 50 years?
This doesn’t mean that you need to let your employees completely set the mission. It does mean that you should value their input and show them how their input affects the final product. Only this will lead them to be actually engaged.
There are dozens of ways to determine the best strategy for your company. We’ve developed an abbreviated process based on the most successful tools.
The IL Strategy Process
Discover Your Hedgehog Concept
In the book Good to Great, Jim Collins talks about the common takeaways from 11 companies in the Fortune 1000 that in a 40 year period went from being merely good performers to outperforming the market by 3x for at least 15 years. He found that each of these companies developed a “Hedgehog” concept. So named after the parable of the fox and the hedgehog. A concept that they stuck to over and over that helped them to focus and beat the competition.
This concept was always at the intersection of the company’s employees passion, the work that they could be the best in the world at and their economic engine:
You already know how to define what your company is passionate about, it’s the mission statement.
What can you be best in the world at?:
This requires conducting a Strengths, Weaknesses, Opportunities & Threats (SWOT) analysis. You can do this either in a team brainstorming session, or the more thorough method, through employee surveys with a follow-up work session.
We recommend doing a survey because you will get more thorough and honest results. Sample questions to ask include:
- What are 3 examples of where and why have we been successful in the past?
- What are 3 examples of where and why we failed in the past?
- What are 3 examples of characteristics that make us unique as an organization?
- What are 3 examples of characteristics that make us not unique as an organization?
- What are 3 external threats that we as an organization face?
- What are 3 external opportunities for our organization?
Then take the results of the survey and do an affinity analysis to agree upon a set of strengths, weaknesses, opportunities and threats.
This will give you an idea of what you can be best in the world at.
Generate Ideas that Match Your Hedgehog Concept
The last part of your hedgehog concept, “What can you make money doing?” is best done as part of generating ideas that match your hedgehog concept. If you tried to come up with all the ideas that you could make money doing without filtering by the other parts of the hedgehog concept you would create an infinite list.
What can you make money doing?
There are two steps to doing this:
- Conduct an 80/20 analysis on your existing products.
- Identify any new products you would like to develop.
Conduct an 80/20 analysis on your existing products:
If you already have revenue and cost data for each of your products (including allocated fixed costs) the best way to do this is to fill out the following table:
Calculating revenue and cost at a product level is a relatively complicated as you want to be sure to include fixed costs allocated in a meaningful way, not just cost of goods sold.
If your company does not have any products yet, do this on ways that your team has made money in the past. This will give you a baseline to generate ideas from for new products.
Identify new products you would like to develop:
If you have a development pipeline, start with that, if not brainstorm a list of products keeping your mission and strengths as a company in mind. Then send it out to your team to rate all the concepts in the following fashion. We’ve broken this out into two tables for space purposes but it would be one table.
These ratings by your employees will be just as good as your employees are and will require additional research to justify numbers but they will get you started.
Prioritize by $, Mission, Strengths and Opportunities:
Now that you have the data, the next step is easy.
Assign weights to each of the responses above, aggregate the results from your surveys and prioritize your products.
Create a Compound Score:
Your Compound Score = Benefit / Cost to the 100th place next to the sum of SWOT attributes addressed next to the sum of the Passion score.
This will give you a list of product ideas sorted by revenue potential first, SWOT importance second, and alignment to passion third. You can change the order to get an idea of how ideas fit on each scale.
Generate Go-To-Market Hypothesis
Now that you’ve identified your top priority products and markets its time to define how you do (or will) connect your unique capabilities as an organization to the needs that you are serving.
To do this, for the top 3 products that you determined above, fill out the following table. This is the business model for each product. Having it on paper and in one place will make it crystal clear to your entire team what your company does and how their actions connect to the company's goals.
The layout of the table is left to right with the left side being influenced by your company’s SWOT to the opportunities and customers you are trying to serve on the right.
In a sentence: Your solution is communicated through channels using a unique value proposition to solve a problem for a set of users.
This table will go in the center of your 1-page MSV cheat sheet. It will convey to your entire team exactly how you plan to achieve your mission.
Now that you have a strategy, it is time to set a specific and concrete mantra: Your vision.
"A powerful vision provides everyone in the organization with a shared mental framework that helps give form to the often abstract future that lie before us. Vision always follows mission (purpose) and values. A vision without a mission is simply wishful thinking, not linked to anything enduring. Typical elements in a vision statement include the desired scope of business activities, how the corporation will be viewed by its stakeholders (customers, employees, suppliers, regulators, etc.), areas of leadership or distinctive competence, and strongly held values." - Paul Niven
An Effective Vision Statement is:
- Appeals to all stakeholders
- Consistent with mission
Sample Vision Statements:
Crafting a Vision
Go back to the survey that you did to create your mission statement. Combine it with the work that you’ve done to start building a strategy.
Identify a goal that you can set for your company. Make it specific, inspirational, and simple to repeat.
The vision is what you will measure every action that you take against.
Put your MSV to work
- Fill out the 1 page cheat sheet.
- Give it to all employees
- Integrate it into your daily process.
- Make decisions based on its awesomeness.
With continued iteration this will engage your employees and allow you to take your company to the next level.