Defining Future Directions of the Organization

1. Defining Future Directions of the Organization HCAD 5390

2. Strategies

3. Defining Future Direction • At what levels is future direction defined? • Who is responsible for defining future direction? • How is future direction expressed? Where can it be seen?

4. Strategy-Making Levels in an Organization Corporate Center ↓↑ Individual SBUs ↓↑ Functional Areas ↓↑ Departments ↓↑ Teams and Task Forces ↓↑ Individual Employees

5. Responsibility for Defining Future Direction • Board of Directors • CEO • Top Executive Team • Strategic Planning Unit • Middle Level Managers • All Employees • Suppliers and Customers

6. Future Direction Documents • Mission • Vision • Values • Objectives

7. Mission Statement • Current purpose of the organization • What it is, what it does, and what it does not do • The “business” of the firm, its domain • The areas in which it operates and the means by which it competes in those areas • The current activities and operations of the firm

8. Mission Statement - Spheres of Operation and Competition • Industry • Industry value chain • Products or services • Technologies and competencies • Customers and market segments • Distribution channels • Geographic areas

9. Reasons for a Mission Statement • Fosters organization-wide unanimity of purpose • Point of identification for employees and stakeholders • Steers operations and activities in certain directions and away from others • Basis for allocating resources • Projects coherent, positive image to external stakeholders

10. Characteristics of a Good Mission Statement • Succinct: one page, 200-300 words • Memorable and recitable • Broad enough to allow management creativity • Narrow enough to limit management recklessness • Distinguishes firm from its competitors • Reconciles differences among stakeholders • Arouses positive feelings about the organization

11. Characteristics of a Good Mission Statement • Tells managers where to look and where to avoid in seeking strategic opportunities • Conveys image of a successful, well managed, self-aware organization worthy of investment and support • Understood and embraced by all organization members • More immediate and pragmatic than a vision statement

12. Vision Statement • Describes an ideal, desirable future state for the organization • A future that the organization will work actively to create for itself • Antithesis of allowing the future to shape the organization, or adapting the organization to the future

13. Vision Statement • Empowers and motivates employees to higher levels of achievement • Value of creating “shared vision” • Can be prepared at all organizational levels • Join all stakeholders in a “future search” for a vision

14. Characteristics of a Good Vision Statement • A kind of “dream” that inspires and drives • Different from what is being done now • Improvement over what is being done now • A “stretch” for the organization with uncertainty about the chances of achievement • Grounded in reality and possible of achievement

15. Characteristics of a Good Vision Statement • Reflects understanding of resources and competencies, as well as external opportunities and threats • A challenge for employees to accomplish, requiring new abilities and performance at the highest levels • All stakeholders see an aspect of the vision that serves their interests

16. Values Statement • Guidelines for employee behavior on the job • Address beliefs and attitudes of all organization members • Implicit (organizational culture) vs. … • Explicit (code of ethics)

17. Values • Johnson & Johnson’s credosets its responsibilities to: • J&J product users. • J&J employees. • Communities in which J&Jemployees live and work. • J&J stockholders. Source: Courtesy of Johnson & Johnson.

18. Texas Health Resources • Mission, Vision and Values • MissionTo improve the health of the people in the communities we serve. • VisionTexas Health Resources, a faith-based organization joining with physicians, will be the health care system of choice. • Values • RespectRespecting the dignity of all persons, fostering a corporate culture characterized by teamwork, diversity and empowerment. • IntegrityConduct our corporate and personal lives with integrity; Relationships based on loyalty, fairness, truthfulness and trustworthiness. • CompassionSensitivity to the whole person, reflective of God's compassion and love, with particular concern for the poor. • ExcellenceContinuously improving the quality of our service through education, research, competent and innovative personnel, effective leadership and responsible stewardship of resources

19. Arlington Memorial Hospital • Arlington Memorial Hospital (AMH) is a full-service acute-care medical center with 417 beds, serving Arlington and its surrounding communities. Since opening its doors in 1958, AMH has contributed to the medical and health education needs of area residents, who pooled their resources to help build the original 75-bed hospital. • Today, with more than 550 physicians on the medical staff, 1,900 employees and 300 volunteers, AMH is larger and more advanced than the founders could have imagined. • But its community-oriented focus, established more than five decades ago, has not changed. AMH remains a not-for-profit, community hospital dedicated to providing quality, compassionate health care.

20. Parkland • Mandate • To furnish medical aid and hospital care to indigent and needy persons residing in the hospital district. • Vision • By our actions, we will define the standards of excellence for public academic health systems. • Mission • Dedicated to the health and well-being of individuals and communities entrusted to our care.

21. Values Issues • Violations of the law • Integrity, honesty, and ethics • Attitude toward and treatment of coworkers, customers, and suppliers • Acceptance of risk taking and failure • Attitude toward innovation and the future • Tolerance for change within the organization • Balance of profit-making and patient welfare

22. Complications in Values • How to communicate • How to enforce • Differences among organizational units • Differences among professions and specialties • Effect on implementation of strategies

23. Strategic Objectives • Long-term strategic thrusts • Designed to realize the organizational vision • Explicit and workable • Provide guidelines for specific strategies • Set at both the corporate and SBU levels

24. Criteria for Strategic Objectives • Based on measurable attributes • Specific unit of measurement for each attribute • Specific attribute level to be achieved • Time deadline for reaching the level • Delegate responsibility to a named person for reaching the level by the deadline

25. Typical Corporate Strategic Objectives • Improve market price of common stock • Increase economic profit of SBU portfolio • Increase total annual revenues of SBU portfolio • Increase portfolio cash flow to support rapid-growth SBUs • Diversify portfolio into new industries • Divest no longer related SBUs • Increasing resource sharing among SBUs

26. Typical SBU Strategic Objectives • Conduct a “turnaround” of the business • Improve the business’s market share • Increase the business’s revenues or profits • Improve the quality of products and services • Acquire or develop specific new technologies • Acquire or develop new employee competencies

27. Tips on Setting Strategic Objectives • “Stretch” the abilities of employees assigned to achieve them • Support them with appropriate resources • Tolerate risk-taking and innovation • Watch for objectives and incentives that motivate undesirable behavior • Employees assigned to achieve objectives participate in setting them

28. Challenges in Documents Defining Future Direction • Confusing mission and vision statements with each other • Defining visions distinguished from the competition • Overly long vision statements and too many strategic objectives • Vision and values that inspire employees • Creating documents useful in strategic management process