The values statement of an organization is what I call “The House Rules.”  It outlines how we’re going to behave as we fulfill our mission and move towards our vision.  It’s called “The House Rules” because it serves the same purpose as the house rules when we visit someone’s home. Certain behaviors are acceptable while there and others are not.  Values statements may outline what performance standards an organization will exhibit (i.e., exceptional product and service quality, complete customer satisfaction, and fair pricing and profits). It may also outline what behaviors are expected of the organization’s employees:

- Demonstrate Integrity

- Communicate Honestly and Plainly

- Think Strategically

- Share Your Knowledge

- Support Innovation and Improvement

Values statements outline whatever standards and behaviors are “non-negotiable” to maintain the integrity of the organization’s culture.  At a minimum, values statements serve three main purposes:

1. First, they serve as a unifying force in establishing a corporate or organizational culture.  What beliefs, attitudes, and values do we as an organization believe in and want to live by?

2. Second, they outline what type of behavior is expected of EVERYONE who draws a paycheck from the organization or represents the organization.  This means front-line staff to the company owners, and the board of directors as well. Anyone who works for the organization or represents it, must abide by the organization’s values.

3.  Third, values statements serve as a powerful management tool to help re-align poor performance.  Now if an employee behaves in a manner that is not in alignment with the house rules, the values statement can be used to redirect behavior.  For instance, if an employee is rude to a customer, the manager can use the values statement to re-align the employee’s behavior. All the manager needs to do is point to the values statement on the wall and ask the employee,

“Does your behavior fall in line with our Values Statement?  As long as you draw a paycheck from this organization, those are the house rules. You were given a copy during your interview before we hired you. They’re included in our employee handbook which you’ve acknowledged you’ve read and understood, and they’re posted on our website and throughout our facility. Now, if you don’t want to abide by our house rules, you’re free to draw a paycheck elsewhere.  But our rules are our rules.  As long as you work here, you have a choice: either you follow them or you leave.”

As the manager, there’s no need to get angry or emotional, and it drives the point home to the employee: Change your behavior and follow our rules or leave. The choice is theirs.

A critical point to remember with values statements is that they serve as a guide for the owner and management team’s behavior as well.  If the executive team can’t abide by the house rules themselves, take the values statement off the wall until it’s revised to state behaviors that can be exhibited by all staff. Don’t enforce them on others.  At a bare minimum, management must acknowledge its own violations of the house rules. If it doesn’t, employees see there’s a double standard in accepted behavior.  When that happens, the employees view the values statement hanging on the wall as nothing more than artwork.  Morale will deteriorate because there’s a double standard: Management doesn’t have to follow the rules but everyone else does.

The true value of a sound values statements is hard to determine.  But well thought-out, organization-specific values statements can set expectations for behavior, performance, communication, personal and corporate responsibility, personal and professional development, as well as, fair pricing and profits.  With those expectations clearly defined, what it takes to succeed in the organization is easy for everyone to understand.

Take a look at the values statement hanging in your organization. Review it to see if your organization lives by and enforces your own “house rules.”  If not, it’s time to redecorate.

I become frustrated when someone says, “I don’t care what you call it:  mission or vision; they mean the same thing.”  No, they don’t.  They have two different meanings; they serve two different purposes. When you don’t delineate between the two, you end up with confusing and ineffective vision or mission statements, and an incomplete plan.

To develop a mission statement well, I tell my clients, “Aunt Clara needs to be able to understand this. Keep it simple.”  Aunt Clara is that one relative we each have in our family. We may see her only once every few years at a family gathering.  Yet, each time she sees us, she asks us the same question: “So, what does that company you work for do?”  Even though you’ve told her several times, she doesn’t remember what you do, because she’s never really understood what you do.

A well-developed mission statement is clear, simple and understood by anyone who hears it.  It simply states why your organization exists; what purpose it serves, and what services or products it provides.  It should be so clear but basic, Aunt Clara will finally understand.

Many organizations have mission statements that say things such as:

We are committed to delivering the highest-quality, state-of-the-art services and products that support our customers while servicing them with honesty, integrity, and professionalism.

That’s all well and good, but what do you do?  Upon hearing this, Aunt Clara’s

probably going to say, “Oh that’s nice dear” and then ask you in another year what you do for work.  (However, if you actually shared a mission statement such as this one, poor Aunt Clara may just avoid you in the future.)

Now, here’s an example of a good mission statement:

The Board of Supervisors of Elections for Washington County’s overall mission is to assure that all eligible citizens are provided the opportunity to vote in local, state, and federal elections, and to monitor and verify the voting procedures in Washington County.

(Washington County, Maryland)

Isn’t that clear and easy to understand?  It’s well-written and it very simply states why your organization exists and what purpose it serves.  When she hears this, Aunt Clara will probably say, “Well you’ve got a very important job then don’t you?”

A mission statement this clear helps everyone understand his or her core job responsibilities – regardless of individual position title.  This is where the mission statement turns into a management tool.  Now, not only is the mission statement a way to clarify why the organization exists, but it also allows you to utilize that great catch-all phrase in your position descriptions: “…and any other duties as assigned.”  What this means is: As long as an employee is accepting a paycheck from your organization, he or she is by default bound to support your organization’s mission.  That’s each employee’s job. That’s the reason employees receive paycheck.  So, if there’s a task that needs to be completed that supports your organization’s mission, but your employees say, “That’s not our job,” it’s time to remind them that as long as they accept paychecks from you, they are agreeing to fulfill their position description (which includes the catch-all phrase).  This could mean an employee may need to help clean workstations before a big client meeting, or another employee may have to help a colleague complete a project. As long as the task you’ve asked them to undertake is supporting your mission, they are bound to help. If they choose not to help, that’s OK, they have just expressed their interest in working elsewhere as they are no longer interested in supporting your organization’s mission.  The choice is theirs.

That’s the power of a well-developed and well-written mission statement.  It clarifies; it outlines your organization’s purpose and responsibilities; and it provides you with a great management tool.

Simple, short mission statements also serve as advertising bites. When placed on your website and company brochures, they become mini-advertising blurbs for prospective customers to determine what your organization does and if you can help them.  Also, simple, clear mission statements help your employees spread the word about your organization. This is particularly important if your employees wear uniforms or company shirts imprinted with your company name and logo.  When that happens, your employees are walking billboards for your company so you want to ensure that each “billboard” is sending the same message out into the marketplace when they tell others what your organization does. Why?  If you asked 20 different employees what your organization does, how many different answers would you get?  Ten, fifteen, twenty?  Now, given the total number of employees you have, how many different messages do you anticipate are currently being sent out into the marketplace? A concise mission statement that all of your employees know and understand solves this problem.

One of my clients called me early one morning, the day after we had finalized his company’s mission statement. Right after that work session, my client had attended a dinner fundraiser at his church. During a break in the program, he turned to introduce himself to a lady sitting next to him. She immediately looked at his company shirt and asked what his company did.  My client said to me, “Liz, as soon as she asked me that, your face flashed in my mind and I knew I’d better try out our new mission statement. So I did!” I congratulated him, but he said, “No wait. Here’s the real reason I called. I just received a $68,000 order from that lady. I’m now putting in an order for company shirts for all of my employees and I wanted to know if you wanted one too!”  Not bad for just being able to clearly and concisely say what your organization does.

Key Points on Missions:

1). A mission that clarifies is clear, simple, and understood by anyone who hears it.  It should simply state your purpose for existing – what products or services you provide.

It should be so clear but basic, Aunt Clara will finally “get it.”

2). A mission that clarifies helps every employee understand the potential breadth of his or her core job responsibilities – regardless of position titles. The catch-all phrase “and any other duties as assigned” covers a lot of territory.

3). A mission helps send a clear, consistent message to your market and prospective customers on what your organization does and how it could help them.

Copyright Liz Weber, CMC

To create plans that are effective management tools, I encourage my clients to:

1. Create a Vision that is tangible and measurable. Vision statements that make you want to hug one another are nice, but they’re hard to accomplish because they are open to interpretation. A vision such as: We will be the premier provider of widgets is a nice thought. But what does that really mean?  How will we know when we’ve achieved that? Or more importantly, how will we even know if we’re making headway towards it?  To avoid this confusion, I suggest a company’s vision is a specific target and one that is kept in everyone’s mind every day. All company projects, expenditures, etc. need to be evaluated to ensure they support progress towards the vision. If they don’t, why are you considering it?

To support this clarity and allow staff to easily evaluate their actions, a solid, classic example of this is Jack Welch’s vision for General Electric when he was CEO there:

Number 1 or 2 in every one of our industries –

Or fix it, sell it, or close it down.

There’s no need to ask for clarification here. Every employee knew what the target was and what the next steps were if the targets weren’t met.

2. Create clear, SMART goals that all move you towards your vision and that leave no room for interpretation when you create any type of plan. SMART stands for Specific, Measurable, Action-Oriented, Realistic, and Timely. Most managers have heard of SMART goals, but few develop goals in a manner that is truly SMART. To make planning clearer for my clients, I suggest they use this basic format:

By __(insert a specific date here)__, (what will occur).

Ex:

By December 31, 2011, all staff will be working out of the new Graham Street office.

What makes this technique so effective is simply this: Without having any additional detail about this project, you can visualize what you would need to see for yourself  before you could mark this goal (i.e., project) off as ”Completed”:  i.e., you would want to see all staff consolidated into a new office and everything they need to do their jobs (i.e., equipment, furniture, systems, software, etc) would need to be in place and operational.  The goal can’t be interpreted multiple ways; it says what the outcome or deliverable needs to be. As a manager, you immediately can start to identify various steps and sub-projects/goals that will need to occur in order for this organizational goal to be marked “Completed. “ It’s specific; it isn’t open to interpretation. It’s measurable; there are a number of ways to track progress towards the goal’s completion: You could track the installation of equipment, furniture, software, as well as the consolidation of staff into the new office.  It’s action-oriented in that there are clear actions that need to be taken. It’s realistic (without knowing more, this one is an “NA”), but it is timely; there’s a due date.

When all goals are created in this same fashion, you immediately create a basic Company Business Plan Checklist of Goals & Projects that you and your team track each month or quarter:

1. By September 30, 2010, complete the June-September quarter operations of the DurEX system.

2. By November 12, 2010, go live company-wide with the DataNow backup system.

3. By June 30, 2011, implement the Level 1 Technician program.

4. By December 31, 2011, introduce the Region 4 Marketing Campaign in the Harrisburg and Lancaster markets.

(Note: Sub-goals would be created for each company goal to help create the individual Goal/Project plans.

3. Review the goals outlined in your plan at least once a quarter, if not every month, as a management/planning team.  Why?

If your plans aren’t important enough to track at least quarterly, why develop them?

• If you’re not monitoring the plan regularly, who is?
• Regular reviews provide opportunities to keep all planning members up to date on the plans’ progress.
• Regular reviews allow for real-time plan changes given changes in budgets, regulations, the economy, competitors, the industry, etc.
• Regular reviews fuel motivation (yours and your staff’s) as you track your company’s progress towards or away from the various goals’ completion.
• Regular reviews with your planning team and staff (as appropriate), ensure your employees are aware of and can better appreciate the work other departments and staff members are doing.
  

4. Update your plans annually. If you have regularly reviewed and adjusted your plan, annual updates to the plan become much less stressful and less time-consuming.  During annual updates:

• Conduct a SWOT (Strengths, Weaknesses, Opportunities, & Threats) analysis to determine if changes to your vision and mission are necessary. If so, update them.
• Review current goals to ensure they still align with the vision or revised vision. Revise them as necessary.
• Develop new SMART goals to keep you, your team and your company moving towards its vision.
• Share the goals with your team. They need to know how they fit in.

When you review and update your business plans regularly, it soon becomes an anticipated, brief agenda item at monthly or quarterly meetings. Also regular, brief but focused reviews help you and your team to develop strategic thinking skills so you can more quickly anticipate and respond to the potential ramifications of proposed projects, regulatory changes, competitor actions, etc. You are more knowledgeable of the plan and the business. And that’s a great position to be in.

Whatever your reason for realizing an update is in order: Great! However, you need to be clear and honest with yourself and your team going into the planning process. Whatever the reason: financing, strategic, or business operations, if you want your business plan to actually be of use to you, it needs to become one of your primary management tools that you consider every day – and I do mean every day. It’s not doing you or your company any good if it’s sitting on the bookshelf. An effective plan takes time, dedicated thought, and coordinated planning to develop. Updating your plan doesn’t have to be painful. However, it needs to be purposeful and then it becomes incredibly useful. I’ll share why and when to update your business plans in this article, and in a future blog we’ll talk about how to update it and manage it.

So why do you create or update a business plan? As suggested above, first determine what purpose the plan will serve. If it is a financing request, its intended purpose is to clarify financial need and payback terms. You then need to include relevant, clearly outlined financial projections of capital need, revenues, cash flow, expenditures, etc., over the period in play. A good Certified Public Accountant can help identify and prepare the appropriate financial statements, schedules, payback projections, and charts to bolster your case. However, remember, the reviewers are going to need to be “sold” on you and your team’s management capabilities, business/market strategies, and overall projected “Business Plan” to ensure the success and payback you’re projecting. You’re asking a bank or investor to “be sold” on your capabilities to do what you say you can within a specified time period. You need to consider and address all of the possible “But what if,” scenarios they may ask. Remember, they’re trying to protect their investment. If they believe your plan, you may get the money. If they don’t, you won’t.
A strategic plan and a business operations plan are more internally targeted as the audience is more often the board, management team, and employees. Stakeholders and others also review the plan, but a strategic or business operations plan outlines organizational direction and major projects to move the organization forward. With these types of plan, you’re not focused on “selling” your qualifications to anyone. The purpose of a strategic plan is to clarify where your organization needs to be 5-15 years into the future to ensure its viability and success – i.e., your company’s big goal; its vision, and then broadly, how you will get there. A business operations plan then details the goals that need to be accomplished to move your organization toward its vision.
Given the rapid changes in technology, the economy, regulations, etc., my clients are now limiting their strategic plans to roughly 3-15 years out; business operational plans typically focus on the next 1-3 years so they can adjust to environmental conditions as needed. Business Operations plans serve as a roadmap for management on what needs to happen and when to ensure there is a well-orchestrated coordination among all departments and projects to move the organization forward. When created effectively, strategic and business operations plans become critical management project planning and tracking tools that are referenced regularly.

Now you know when and why you would update your business plans. In a future blog, we’ll talk about how to update and manage your plans.

(As printed in the PA Business Woman Magazine March 2010)

Make your Vision Statement clear.

Now, I do believe I know why these board presidents are really asking the question: They don’t understand what their job as board members – and specifically – a board presidents is. Boards of directors are supposed to give direction to the CEO or administrator. The boards are supposed to determine strategy based upon their expertise and ability to see the big picture because — now pay attention to this part — they’re not wrapped up in the day-to-day management issues of the organization. This is where many boards run into problems. The board president and members are often too involved in the day-to-day management of the organization. Because many organizations have limited or weak management, many boards “get really involved” in the business, and often end up being “doers” and “wannabe managers.” They then stumble over themselves and the “real managers” on who’s doing what, and they lose sight of what they’re supposed to be doing as a board: determining strategy, monitoring and providing direction to the CEO, tracking the financial statements, and planning for leadership succession. Who has time for that when you’re involved with determining vacation schedules with staff?

So what can a board do?

1. Let management do its job. Get out of the way. Stay out of the day-to-day management issues.
2. Find stronger managers/leaders if necessary who are capable of handling the details so you can focus on board issues.
3. Remember, the management team works for you: you don’t work for them. If you’re doing things the managers should be doing, become aware of it, make them aware of it, and start doing your respective jobs.

Boards should do board stuff. Managers should do management stuff. It tends to work better that way.

What do you think?

Everyone knows the economy is uncertain and most employees are rightfully concerned about job stability. When people become nervous, the rumor mill kicks into high gear. We all know the rumor mill can destroy individuals quicker than many things. So if you haven’t yet, start communicating now. Lay out clearly how your company is and will address future business slow-downs.

Step 1 – Hold a “State of the Business” meeting with all employees and let them know the current state of your
business. Let your employees know what your plan is for lay-offs and how you’ll handle lay offs if your company needs to resort to them. Share with your employees the following – or your own plan – for dealing with a slow down. The important thing is to communicate clearly the state of your business now and what will cause you to move to the next step.

Step 2 – Reduce management salaries. Should business start to slow down and you need to more proactively preserve cash and control costs, don’t immediately lay-off the lowest paid, front-line workers. They’re the people who do what your business is known for. Do what you can to retain them. Instead, consider doing what a few of my clients are doing: Cut management salaries. Tell your employees this during your State of the Business Meeting. Let them know, you’re working to protect the front-line workers’ jobs, so the first wave
of cost reductions will be borne by the management team. (One client cut all executive salaries by 15%; all mid-level managers by 10%.)

If you, like one of my clients, has a manager who “jokingly” asks, “But I’ll still get my bonus won’t I?” consider my response. “Absolutely. But first I want to sit in the meeting you’re going to have with the employee(s) who will need to be laid off in order to pay you your bonus. I want to hear how you explain to them that you will still get your bonus while they lose their jobs. Once they give you the O.K., you’ll get your bonus.” (Yeah I know it’s mean, but – duh. No bonuses.)

Step 3 – Reduce or completely eliminate any overtime (within the law.) Again, this needs to be clarified during your initial meeting, but let all employees know the ability for your company to pay – and their ability to continue to earn and live on -overtime rates is gone. Give your employees time to mentally shift and realize they may need to dramatically cut their living expenses and not count on overtime pay or consider it their “normal” income any more.

Step 4 – Reduce worker hours and cross-train. Again, where possible, instead of completely eliminating positions, reduce worker hours to preserve cash while allowing employees to maintain an income stream. If you haven’t yet, this is also a critical time to cross-train and to provide additional training for staff. When things turn around, they’ll have solid skills. During slow times, they’ll continue to provide value for your business by working — maybe on things they’ve never done before — but they’ll be working and continuing to broaden their skills.

Step 5 – When you can’t hold off a lay-off any further. Lay off staff. Hold conversations with them to further clarify what they’re next steps may be. Provide them with information on continuing benefits, unemployment, etc. Don’t treat them as if they’ve committed a crime by standing guard next to them as they pack up their personal items and then escorting them out of the building. Allow them to say good-bye to colleagues and leave with dignity.

The above steps may not work for your business. But at least have a strategy in place for how your company will face business downturns and then clearly and regularly communicate that plan to your staff. Most importantly, keep your employees informed of your business’ progression to the next Step. Let them plan with you how to deal with the change in business and their employment situation. It’ll help you and them face a difficult time together with mutual respect and dignity.

Originally issued under Mangers’ Corner – Managing Lay Offs with Dignity (Feb 2009)

Copyright 2009 – Liz Weber, CMC – Weber Business Services, LLC.