Vision

What each kind of organization is trying to do

An organization's vision depends on what it exists to do, and the three kinds of organization in this course exist for different reasons.

A business seeks to earn profits and to increase them. It also works to fulfill its stated mission and goals and to stay competitive and viable in the long term. A record profit this year means little if the business cannot survive the next five.

A business can improve its profit in two ways: by increasing revenue or by decreasing costs. It can also do both at once. Here is a food truck that wants $12,000 more profit.

A social enterprise is a business that seeks a profit while also achieving a social objective. Its impact on a problem in society can come through three parts of the business:

• its products, like a company that sells low-cost water filters to households that lack safe drinking water;
• its operations, like a bakery that hires and trains people who are leaving prison;
• its financial model, like a sock company that gives a pair to a homeless shelter for every pair it sells.

A nonprofit organization serves the public good instead of generating profit for owners. As the food bank showed, a nonprofit can still take in more than it spends. By law it cannot pay that surplus out as profit, so the surplus is reinvested in the organization's work. Nonprofits often rely on grants and donations for part of their revenue, alongside money from sources such as program fees and ticket sales.

Core values and core competencies

Core values are the defining beliefs and principles that guide a person's or a business's actions. Creativity, excellence, transparency, empathy and reliability are examples. A core value answers the question what do we believe in?

Core competencies are the capabilities, skills and expertise that help a person or a business outperform rivals and achieve competitive advantage. Innovation, customer service, communication, ethical behavior and efficiency are examples. A core competency answers a different question: what are we better at than the competition?

Ethical behavior can be either one, so ask which question a statement answers. A belief that customers deserve an honest answer is a core value. A safety or compliance record that no competitor can match is a core competency, because it is something the business does better than its rivals.

Businesses communicate their core values on purpose. Values align employees to a shared purpose, so a warehouse worker and a sales rep pull in the same direction, and they guide decision makers toward choices that fit what the business believes. Harbor Street Roasters lists transparency as a core value and publishes the price it pays every coffee farm. When an importer offers cheaper beans but will not say what the farmers were paid, the buyer does not need to ask the owner what to do. The value has already answered.

Core competencies steer a different set of decisions: which opportunities to pursue, and where to put money and people to meet customer needs. Tri-County Appliance Repair's core competency is fast, expert repair. Its technicians fix most washers and dryers on the first visit. When a manufacturer offers it the chance to open a showroom selling new appliances, the company says no and spends $30,000 on a second service van instead. The van brings more customers to the thing it already does better than its rivals. A showroom would have meant learning retail from scratch.

Your own values and competencies

The same two ideas apply to you. When you choose a college program, a career or a job, you are weighing your core values (what matters to you) and your core competencies (what you are good at), whether you name them or not.

Jaylen values creativity, and his strongest competency is communication: he can explain almost anything to almost anyone. He has two summer offers.

• Stocking shelves overnight at a grocery store, at $15.00 an hour.
• Helping a small design studio run its social media accounts, at $14.25 an hour.

He takes the studio job. It uses what he is good at and lets him do the kind of work he values, and to him that is worth 75 cents an hour.

Vision statements and mission statements

A vision statement gives a concise description of a business's core values and aspirations: what it believes and what it hopes to become. A mission statement describes what the business does and how it will achieve its long-term goals. The vision is the destination, along with what the business stands for on the way there. The mission is the route.

Here is a pair from Riverbend Animal Clinic, which has three offices in one county.

• Vision: Every pet in Riverbend County gets excellent care from people who treat it like their own.
• Mission: We provide checkups, vaccines and surgery at three neighborhood clinics, with evening hours and payment plans so that cost and schedules never keep a pet from care.

The vision is short, and it carries the values (excellence and empathy) along with the aspiration. The mission names the services, where they happen and how the clinic plans to reach every pet.

Both statements speak to two audiences. Inside the business, they communicate long-term goals and core values, which guides decisions and gives everyone a shared sense of purpose. A receptionist deciding whether to squeeze in a sick cat at 6:55 p.m. already knows what the clinic would want. Outside the business, the statements tell potential customers and investors what the business is trying to do and what it values.