Strategic Planning: Organization Mandates and Mission

In this article you will be looking at an organization's mandates and its mission or mission statement – one typically is overlooked in strategic planning and without the other you do not have a strategic plan.

Mission statements are critical for an organization because it tells everyone in the organization why you are here, what you are doing, and where you are going. It's vital because it clarifies – a mission statement tells you exactly why the organization exists. So if you do not have a mission statement it's almost impossible to have a cohesive strategic plan.

The often overlooked item in strategic planning is organization mandates. People tend to lump all the mandates into "legal matters," which many people tend to not understand or even have a general knowledge of, so they skip this area with the wrong understanding that a lawyer or the legal department handles all these matters. Yes, some of the formal mandates such as incorporation papers, articles of incorporation, and other legal documents, a lawyer or legal department would handle for an organization. But a lawyer may not handle some of the laws the organization must follow on a daily basis, such as the disposal of chemical waste or the proper shredding of paperwork with personal identification information. These types of actions a lawyer would not handle, but supervisors in the organization would be responsible for and these mandates should be identified in a strategic plan since they are critical and do require funding.

The other types of mandates generally are called informal because they are culturally specific to the organization. But being informal or being organizationally specific customs, traditions, or business norms, does not mean they are less important than the formal requirements. For some organizations, it appears the informal outweighs the formal – and to some officials the informal might be more important to them. For example, a senior stock holder of a major company feels slighted because their family was not asked to chair the annual bazaar, which has been a tradition since the bazaar's inception fifty years ago. That could be a major disaster if the family were to dump its stocks or raise a stink at the next stock holders meeting. Many officials could lose their jobs. Either way, it's a critical oversight to this organization and that is why it appears the informal mandates in some organizations outweigh the formal. But in reality, if the organization were to sidestep the formal they no longer would be in business.

A final thought before digging deeper into mandates and mission. For an organization to be successful, it is imperative the organization has a definitive mission statement and mandates, and for these to be accessible, understood, and followed by all organizational members.

Mandates Uncovered

Before an organization can become a legal entity there are critical decisions that must be made and some legal mandates that must be accomplished. Both for-profit and non-profit organizations must file for a corporate business license. Yes, non-profits are businesses and must have a license.

The next mandate is to register the name of your business. This includes the name the organization will be "doing business as." The reason for this explanation is some organizations have more than one name. For example, a nonprofit's name might be "Foundational Schools," but the public knows the organization by the school's name of "Governess Academy."

And then there are the other business mandates of: obtaining a tax identification number, registering for state and local taxes, and obtaining state and local licenses and permits.

Formal mandates appear daunting, hence why most people starting a business seek professional help from companies that specialize in incorporation paperwork or from a lawyer.

Once an organization is licensed, if employees are needed this creates another round of mandates that can appear overwhelming. These mandates include: filing and paying Social Security, having Worker's Compensation insurance better known as Worker's Comp, Family and Medical Leave policies, among other mandates depending on the size of the organization.

All these mandates are important and must be made known to all the strategists tapped to create a strategic plan because many of these expenses are recurring and must be included in the plan. Also, the type of license an organization has may prevent it from certain expansion plans. For example, if the organization accepted a government grant for job training in a section of a county that is labeled as an at risk area for students to complete high school creating high unemployment in the community, then the organization cannot move its facilities for a set number of years.

Interested in learning more? Why not take an online Strategic Planning course?

Or an organization was looking at employee retention and decided to add a cafeteria with one free meal a day for everyone. There are some employee health insurance policies where the rates would increase if such a facility was on the premises because the insurer has an understanding that cafeteria-type food is fattening and employee's health will deteriorate having a free fatty meal every day. On the other hand, there are insurers who would lower the company's rates if they were to hire a dietitian and offer healthy low-fat meals to all employees. So it pays to look over all the mandates and understand all the rules, regulations, stipulations, and fees that are involved with each.

Mandates are critical and can change the whole strategic plan of an organization. Look at one mandate created by the government that seemed like a great idea, and there have been examples cited of it helping people so the mandate has its followers and those who follow it because its law – mandatory health care and government subsidized insurance. This one mandate has changed the whole scope of the nation's workforce. Many major companies have strictly reduced its full time employees and gone to a majority part-time workforce to avoid hefty required medical insurance premiums. Some small organizations have gone from a part-time workforce to a contract workforce or they pay placement agencies for a "rental" workforce to avoid the expense and hefty fines for noncompliance. Mandates create expense, time, manpower, and limitations on what an organization can and cannot do, so their requirements must be known when forming a strategic plan.

Informal mandates tread in dangerous territory. They are known by many different names – freebies, perks, bonuses, traditions, benefits, and gifts – to name a few. Some of the informal mandates created by organizations were viable and critical assets in the early stages of an organization. They seemed simple in nature, but they attracted customers and created positive memories that brought the next generation of customers into the business or organization. Other informal mandates kept employees loyal to their organization even when a larger salary was offered from a rival. Many times, informal mandates offer a perceived value that outweighed their monetary value. One simple example that many businesses practiced was free balloons to children. This practice was wide-spread a few years back, but between the rise of gas prices, a world shortage of helium, and environmentalists citing the ill-effects of the rubber and vinyl on nature, companies slowly stopped the practice.

But some of the traditions did not quietly go away. Look at the free peanuts on commercial flights. After the September 11 terrorist attacks, airline tickets rose sharply while the services and amenities have declined. The free bag of peanuts, while only costing the airlines about 7 cents a bag because of its bulk purchases, actually saves the airlines more than $2 million a year. And consumers had much to say about the peanuts' demise, along with the other services. But the airline industry was adamant and still stocks food for its passengers, but at a premium price. While it seems unfair to the customers and a trivial expense, in today's tight economy organizations are taking serious looks at their informal mandate practices.

For years many organizations gave Christmas bonus checks or growth percentage bonuses. Many organizations have done away with the practices while others now offer Christmas savings plans in partnerships with various credit unions.

The types of tools are great incentives for employees, but can be costly for the organization with taxes and misperceptions among employees. For example, say you announced that because of the great job the promotions department did for a new ad campaign, the organization is giving each employee a $50 bonus in their next check. Of course, any time money is given there are taxes, but employees heard $50 and that's what they expect. When they see only about $32 in their check, they are not happy – they wanted $50. They think the organization did not keep their word and ripped them off. So there are times when some of the informal mandates are not as beneficial as an organization hopes.

And some of the mandates are taking serious hits while others seem to grow, benefitting top tier employees at the expense of everyone else – even the organization. News stories abound of CEOs leaving organizations with fat separation bonuses even though their stocks are in freefall and layoffs are inevitable.

Other traditions involve the stockholders and what they perceive as their traditions or perks. If the annual stockholders picnic doesn't have fried chicken one year but opts for hotdogs, then things could get really dicey during the meeting.

Traditions mean well in the beginning and are great ideas, but for many organizations there comes a time when the benefits of informal mandates are not worth the efforts or expense for an organization.

While organizing a strategic plan, all of the organization's mandates – both formal and informal – must be looked at, expenses and any requirements documented, and if not required then its benefits weighed against the strategic plan. For a strategic plan to be successful, the organization must be willing to cut traditions, perks, and other informal mandates that do not help the organization reach its ultimate goals.

The Mission

The mission of an organization is defined by its mission statement. This statement spells out the organization's purpose and justifies its existence. It's a simple declaration of who the organization is and its purpose for being there. It's short, simple, and to the point. If the statement is too long then the meaning gets convoluted and employees and customers will be confused about who the organization really is and the services provided. More importantly, employees will not know how they fit into the big picture and why they perform their duties each day. This leads to a disillusioned workforce that does not accomplish anything.

Without a strong mission statement it is impossible for an organization to compile a strategic plan. A strategic plan maps out the organization's future for the next 20 to 30 years, and if the organization does not have a clear view of its mission it cannot have a 20-20 vision for the future.

At the least, the mission statement should once again answer the basic "W" and "H" questions – who, what, when, where, why, and how.

Who is the organization? Don't write only the name and say that is who we are because that only is a name on a piece of paper. Look to the heart and find the pulse – sure the organization has a name but what does it represent? Take the Salvation Army for an example. Salvation Army is their name for who they are as a nonprofit that brings salvation and hope to the people who find themselves down and out. That's digging to the heart and finding the pulse of the organization.

What is your reason for existence? Are you a building on the corner taking up real estate space or are you an organization that makes a valuable product that improves the lives of society? Or is the reason you open your doors is so you can counsel people and help them through a difficult time? Write a sentence that justifies your existence and why you come to work every day.

The when is not as cut and dry as the first two W's. When for a mission statement is rather simple since it predominantly points to an organization's history and typically finds its way into a mission statement as a year the organization came into existence. This gives credibility to an organization – especially if it has been in business for more than 25 years.

Where is another simple question to answer, but one that is important to explaining who, what, and the how of an organization. Where explains if the organization is local, state-wide, national, or international in its reach. Where gives a hint at the magnitude of an organization's outreach and impact on society.

The why is where an organization's values come to the forefront. This needs to be answered honestly and should not be used as a propaganda feel-good message in the mission statement. This should reflect the heart of the organization so that when looked at the strategic plan is accurate in its future goals.

If the mission statement does not explain how the organization accomplishes what it does then employees will not have a clue how anything is accomplished and most will not know how to do their jobs. It's that simple and that complex.

Without the mission statement the strategic plan has no beginning and no direction for the future. The mission of an organization should be common knowledge to everyone in the organization and to its customers. This should give customers confidence they are getting the best service. Mission statements let the employees know their organization knows where it is going and why it exists and this gives meaning to their lives. For this reason it is important that an organization's mission is clear, concise, and memorable.