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Think Company Vision Statements Are a Waste of Time? How the 35-Year CEO of Dunkin’ Donuts Created a Plan to Recover from Disastrous Losses

Think Company Vision Statements Are a Waste of Time? How the 35-Year CEO of Dunkin’ Donuts Created a Plan to Recover from Disastrous Losses

Every working day for nearly 17 years I walked by the same mission statement poster. The fact I can't remember what it said tells you all yo

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Every working day for nearly 17 years I walked by the same mission statement poster. The fact I can’t remember what it said tells you all you need to know.

Most vision and mission statements are like that.

Well intentioned, sure. But often a waste of time, especially since the goal often seems to be to cram in as many positive virtues as possible. Innovation. Disruption. Commitment. Solutions. Value.  

The average mission statement — much less vision statement — is white noise.

Yet the underlying premise makes sense. As a leader, one of your most important responsibilities is creating and stewarding strategy: Deciding where you want to go, and how you will get there. 

Create vision and mission statements that establish a clear starting point for your objectives, goals, strategies, and tactics… and then they provide real value.

The best approach I’ve seen comes from Around the Corner to Around the World, the new book by ex-Dunkin’ Donuts CEO (and son of the company founder) Robert Rosenberg. Early in his tenure, considerable losses resulted in the company’s board telling Rosenberg to search for his own replacement. (Getting fired is one thing, but having to find the person to take your place? Eek.)

Rosenberg asked for one more quarter to evaluate whether solutions already put in place would pay off.

Here’s how Rosenberg defines terms like vision, mission, objectives, goals, strategy, and tactics — and how each linked together to form a clear plan that turned the company around. 

Vision Statement

“A vision is a statement about what the leadership agrees a company could reasonably stretch to be in a generation — a thirty-year aspiration.”

According to Rosenberg, if the statement doesn’t contain “to be,” it’s not a vision statement.

For example: “We wish to be the largest bicycle manufacturer in the United States as measured by sales within thirty years.” 

Your vision is where you want to be… a long, long way down the road.

Mission Statement

“A mission is what you wish the company to be over the next three to five years.” Again: “To be.”  Your mission sets a shorter-term agenda for steps that will allow you to someday achieve your vision.

According to Rosenberg, this might be the most critical step in the planning process. Not only do you determine what you want the company to be, but also will it will not be. 

As Rosenberg writes, “… the most important job of a CEO is to define reality… to be absolutely realistic about (the company’s) capabilities and the competition it faces.”

And to focus on things you can reasonably achieve that fit your vision. If your mission is to build your bicycle company through online sales a la Canyon, a mission that includes running the dominant bicycle in every market in which you operate doesn’t fit. You’re an online retailer, not brick-and-mortar.

Objectives

“Objectives (interchangeable with “goals”) are what you want to have.”

Not “be, “have.”

The key is to sift through all the possible metrics and KPIs to determine the goals that most define success. Early objectives for Dunkin’, whose mission was to be “the dominant donut and coffee provider in each and every market” in which they competed?

  • To have earnings per share grow at 15 to 20 percent per year
  • To have store-level economics achieve at least a 15 percent return on investment on average
  • To have debt never amount to more than three times EBITDA

The company measured plenty of other things, obviously. But those objectives mattered most — which meant other goals had to support those objectives.

Otherwise they weren’t important.

Strategic Initiatives

“The four to six most important tasks and organization must execute in order to bridge ever-scarce resources to achieve stated objectives.”

Dunkin’ decided the best way to achieve 15 percent earnings per share growth was to add new stores by 3 percent each year. At one time, that meant the company had to open 100 new stores the following year.

Which meant the real estate division needed to list four to six initiatives that would achieve the 100 new stores objective. 

Objectives are what you want to have. Strategic initiatives are how, in broad terms, you will get there.

Tactics

“The four to six action steps needed to support the achievement of each department’s strategic initiatives.”

Tactics are granular. Tactics lay out the steps defined by initiatives.

Say I worked in the Dunkin’ real estate department and was tasked with opening 10 of those 100 stores. Executing the strategy might might have meant working with the three top franchisees in my territory to add one store each to their holdings. Engaging two new brokers to help identify potential locations. Arranging the purchase and renovation of four empty properties in suitable locations.

Tactics are the nitty gritty. Think of tactics as key headings on a to-do list.

The key is to make sure your tactics, initiatives, and objectives roll up to support your mission and, ultimately, your vision. 

If they don’t, they don’t fit.

Or you haven’t established a clear vision and mission for your company.

Because your goals must always inform your process.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

This article is from Inc.com

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