WHY COMMUNICATION OF MISSION AND CORE VALUES TO STAKEHOLDERS IS IMPORTANT
· Investors need to know how the organisation intends to make profits or fulfil some other ambition.
· Directors and other employees need to know the organisation’s purpose, and how it intends to add value and to compete.
· Customers may wish to know what the organisation promises.
· All stakeholders should want to know how the organisation intends to conduct its operations; the principles that guide its actions; its moral and ethical ‘compass’.
For example, it is clear from Tesco’s mission statement that it places the highest emphasis on its long-term relationship with customers. This should guide management and staff as they make day-to-day strategic, tactical and operational decisions. To a large extent the other three parts of their vision statement flow from the first: customers, their families and friends will be part of the community, so it is important to deal fairly with that; staff are the company’s interface with its customers; if customers are well looked after and are loyal, good financial results should follow.
If Tesco had not placed such emphasis on its customer relationships it is likely that the goods it stocks, sales promotions, customer facilities, prices and quality would all subtly change. Tesco is saying to all that it lives or dies by the strength of its customer relations.
Of course, a strong and focussed mission does not guarantee success and in January 2012 Tesco suffered a 16% fall in share price after it announced its results. In response to this, the chief executive said that the company needed to reconnect with its customers and that Tesco needed to sharpen up its act in the quality and availability of its goods and the service it offered customers. The company planned to invest cash to put more people into the right stores, in the right areas, and to train them to be even better so they can look after the product and customers.
Intel places its sphere of business in the technology sector and has an international outlook. Nothing surprising there, but interesting detail is added in its core values. Perhaps the juxtaposition of discipline’ and ‘risk’ is most noteworthy. Stakeholders are made aware that a high tech company will only survive by taking risks (not all research and development will pay off), but this must be counter-balanced by a disciplined approach to market research, forecasting, expenditure and deadlines.
ACCA states very plainly that at its heart is the provision of opportunities to all nationalities and a diverse population. This will influence management, employees, students and members. Without the strong international reference, presumably ACCA would be much more likely to concentrate on a narrow, local market. Additionally, there is great emphasis on ethics and accountability.
Communicating objectives to stakeholders is likely to require different messages to each stakeholder group (for example, customers do not need to know about detailed cost objectives given to employees). However, mission and core values are long-term public commitments and promises, and it is vital that they are consistent otherwise they are quickly undermined. There is no point preaching to customers that the company aims to have a low carbon footprint while at the same time telling employees not to bother with recycling. Inconsistencies and half-heartedness will quickly be exposed and are likely to cause the organisation reputational damage – at the very least.
A COMMUNICATION MODEL
A commonly-used model of communication is the Shannon-Weaver model. This depicts the communication process as:
For communication to be successful the message has to get from the sender to the recipient and be understood and acted upon. When communicating core values and mission, the five elements would typically be:
· information source: the board
· transmitter: encoding the message – deciding what needs to be said or what needs to be shown and designing the message
· the communication channel – eg internet, letters, meetings. These are listed more fully in the next section
· the receiver: decodes the message – eg a web-browser displaying a page
· destination – employees, customers, shareholders.
Noise can interfere with the message at any stage and this can be termed a barrier to communication. Noise can prevent or distort communication. Typical sources of noise are:
· language difficulties – ensuring that the message is properly translated into foreign languages and that any terminology used can be understood
· information overload – too much information so that recipients are overwhelmed and fail to see the most important information
· failure to receive – wrong email addresses, trying to display Flash animations on iPhones
· reluctance to receive the message – eg employees might be reluctant to change their behaviour and might ignore the communication
· status differences – eg management stays remote from employees and is reluctant to hear bad news about the organisation’s performance
· inappropriate communications channels – eg expecting employees to read and digest a long text on the organisation’s core values when a training course, video presentation or discussion might be much more effective.
Communications can break down very easily and the organisation’s management might not even be aware of this. A survey carried out by the Boston Consulting Group (1) found that although around 27% of bosses believe their employees are guided by a ‘set of core principles and values that inspire everyone to align around a company’s mission’ only 4% of employees agree. Similarly, 41% of bosses say their firm rewards performance based on values rather than merely on financial results. Only 14% of
employees believe this. So, quite obviously there are serious communications failures relating to the core values of the organisations in the survey.
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