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What a Company Needs Most

post # 281 — January 12, 2007 — a Strategy post

If you HAD to put them in order, what do you think are the most important key ingredients for a company (or an organization)?

  • A Mission?
  • A Vision?
  • Values?
  • A Direction?
  • A Culture?
  • A Set of “Rules and Obligations” for membership?
  • A Purpose?

Lots of writers play around with these concepts and each has its fans. Which do YOU think are worth spending time on (in which order) if you were trying to help an organization succeed?)


Tracey Segarra said:

A good spell-check program!

posted on January 12, 2007

David (Maister) said:

Thanks, Tracey. I caught most (not all) of my typing mistakes.

Now, back to our original programming….

posted on January 12, 2007

Stephen Ruben said:

Everything comes from values . Everything emanates from values. Everything flows from values. Am I clear?

Without a clear set of values and an understanding of those values, the other choses represent smoke and mirrors. They are all a result of a poorly conceived plan or apublic relations exercise.

posted on January 12, 2007

Rob Reed said:

Values would be at the top of my list, followed closely by talent. Hire talented people whose values align with organizational values and target customers with similar values.

The alignment of values is one of the key components to building trust — critical to internal and external relationships and organizational success.

posted on January 12, 2007

Jef Cumps said:

I think you should first give us some definitions for these, often wrongly used, words. Because for me, a purpose could mean something different than it means for you, for example…

posted on January 12, 2007

Bruce MacEwen said:

I believe it was none other than Peter Drucker who said the one key ingredient for a firm was customers. At one level it could be taken as facetious, but I think the pearl of wisdom there is it forces you to focus on what? On clients. And at some deep level, everything else follows.

posted on January 12, 2007

James Mason said:

I can’t speak for anyone else, but as an Organizational Culturist, and one who did his graduate work, Thesis, post-grad, and most of my professional work in the field of organizational culture, I feel pretty confident when I say that culture (or if you prefer “culture”) simply IS. It exists, whether or not you “spend time on it,” are a “fan” of it, or even choose to acknowledge it.

As far as a definition, it’s usually defined incorrectly, and it very often means different things to different people anyway. But it always often subsumes all the other things you listed along with it above. Tricky.

Finally, if I were trying to help an organization succeed, I think I’d try to help it understand that words on a page, even very good words, and even very good, well-defined, sometimes even very good, well-defined, nice-sounding, pretty pretty words, are no substitute, not even a little bit, for understanding the very simple fact that people are part and parcel of what and organization IS, and that, if you want to “help an organizational succeed” you need to help the people who make UP the organization succeed. . .however you define success. . .good luck with that, by the way.

Warm Regards,

James E. Mason

posted on January 12, 2007

Eric Brown said:

I would start with the “Values” (i.e., “the principles and standards used for guidance”) of the organization. Once the values have been set, I think the other items fall into place.

posted on January 12, 2007

peter vajda said:

I, too, would vote for values…as values underly motivation…why we do what we do (good, bad and indifferent) and why we are who we are…all our do-ings and be-ings. Often times, however, self-defeating and self-sabotaging values are blind spots…what we deem as important, worthwhile, “good” (whatever that means) can often lead to self-destruction of the organization and the person…e.g., as more and more of the business and sports sections read like the police blotter…it’s important for one to consciously see how one’s ego gets involved in the interpretation of the values. Some see the value of electricity for lighting the building; some see the value of electricity for electrocution and killing.

So, as James Mason said, above, it’s not about words on a piece of paper…for me, it’s about how each individual chooses to interpret these words (values), how one chooses to operationalize one’s values. That, then, determines one’s approach to purpose, mission, clients, culture, direction, etc. It all starts with the individual and how one chooses to interpret a value.

posted on January 12, 2007

Dennis Howlett said:

It’s either a trick question or it’s me being evil on a Friday afternoon.

The answer is: Customers

posted on January 12, 2007

Lance Dunkin said:

Values and a set of rules and obligations for membership.

Then culture.

Then purpose, direction, vision, and mission.

posted on January 12, 2007

Duncan Bucknell said:

A set of ‘rules’ that the firm is uncompromising about (even with the ‘rainmakers’) will be the practical, real-life and implemented evidence to the world of all of the other items on the list.

Start by asking yourselves – what are we going to be uncompromising about. This will tell the world who you are, your vision, mission, purpose, values, culture and direction. Oh – and it will attract the right clients, too. (‘Customers’ per se isn’t enough – you want the right ones, right?)

(David – I don’t mean to be a parrot, I just think you are completely right about this and so I think this is no. 1 on the list you are proposing.)

posted on January 12, 2007

Wally Bock said:

I realize that you meant this as a device to stimulate discussion, David, but, gosh, it’s like picking which ingredient of the soup is more important. They work together and the magic is in the mix.

posted on January 12, 2007

Duncan Bucknell said:

Hi Jef and Wally – come on – make a call.

Hi Stephen, Eric, Peter, Lance and Rob – values come from within each person – how can you ‘align’ them? It seems to me as though if you get them to commit to behaviours, then you’re half way there. (Or do you split the firm up into smaller firms based on sets of values?)

Hi Bruce and Dennis – is a focus on customers a restatement that it is your core vision, mission, value, direction, culture, purpose or central rule? Which one of these comes next, though.

(Please forgive me everybody for shooting questions everwhere, I have just found in the MBA classes I teach that the best and most interesting discussions (for everyone) come when the audience interacts vigorously, but politely, with each other.)

So how about it, everyone?

posted on January 12, 2007

Bilal Succar said:

Values formulate a Culture that may lead to a Vision. The Vision creates a sense of Purpose which needs a Direction to become a Mission. To sustain the above, Rules and Regulations of membership are needed.

posted on January 12, 2007

Scot Herrick said:

I’ll take one that isn’t on the list: execution.

One can have great strategy, vision, values, be customer centric, purpose, rules, and a culture and they all mean nothing if the company and the people in it can’t execute.

If the execution works, it will naturally lead to where the company should be going because there is immediate feedback as to what works and what doesn’t.

So the ability to execute a task, plan, strategy, deliver services to a customer, within a culture trumps everything.

A thoughtful post, David. And some very good comments, of which this is merely one perspective.


posted on January 12, 2007

Bryan I. Schwartz said:

When I first started managing professional service firms, I was convinced it was direction and purpose (collectively strategy). I really do believe that Jim Collins changed my mind on that and I have since implemented in terms of people with values, who play by a set of membership rules and obligations. The outcome of this chemistry is what is known as culture. I think Bilal wordsmithing was quite eloquent.

posted on January 12, 2007

S. Anthony Iannarino said:

Hi David:

Sorry my choice isn’t on the list. My vote for most important is CUSTOMERS! Everything else is there to deliver for and serve them, right?


posted on January 12, 2007

Eric Brown said:


When I used the word “Values” I meant the things that are the principles and standards that an organization uses to guide itself and its people. Perhaps these might fall into the “rules and regulations” selection, but I consider them to be the values of an organization.

Of course, personal values do come from within each person…but an organization can have its own values as well and that organization will, more than likely, recruit, hire and retain those people whose values are more closely aligned to the organizations values.

posted on January 12, 2007

Heidi Ehlers said:

I, like Scot Herrick will also take one that isn’t on the list:A quantifiable goal with a timeline attached. Harvard University did a survey where they found that people with a quantifiable goal with a timeline attached are 10 times more likely to achieve it regardless of age, gender status, location etc.

I believe the same holds true for companies – as they are all a collection of people. Just as an industry is a collection of companies. But still all people.

From the goal springs allignment on all the other variables on your list.

To Bryan Schwartz’ comment on Jim Collins I might add that Jim Collins also said, “Who then What” and I couldn’t disagree more. I refer to the space programme created by Kennedy. I doubt he just hired a group of scientists and then figured out what to do with them. It probably went more like, “Hey we want to beat the Russians to the moon. Are you in?” The goal was the wellsprung for the mission the values, the culture, the talent, the purpose, the rules and responsibilities that followed.

But as Scot mentioned, we wouldn’t know who Neil Armstrong is, if not for flawless execution.

Thank you great question.

posted on January 12, 2007

Duncan Bucknell said:

Eric – Thanks – I get it. I agree with you.

I guess it becomes circular. How do you tell what the true values of the organization are? By seeing what they’re prepared to enforce – the rules they won’t compromise on.

posted on January 12, 2007

Stephi said:

Interesting, I would say for any organisation to grow it is very important for them to have a Vision to understand what they are doing and where it will take them, then you define the purpose. Then to have a Mission, what is the ultimate goal.Accordingly you decide which direction you will be selecting. rest comes after that.

  • Values
  • Culture
  • A Set of “Rules and Obligations” for membership


posted on January 13, 2007

peter vajda said:

Hello Duncan,

So, for me, we have values at the 50,000-foot level, which drive vision and purpose (why does a president choose to focus on a space program; why does one choose to focus on war? why does one company operate from an “open-books” perspectiev while another secretly and paranoically guard financial information?); we have values at the 30,000-foot level which point to mission (why does one company choose to be first-rate with respect to customer service; another just mediocre? ); we have values at the 10,000-foot level which point to goals (why does one energy company point to reduced greenhouse gases while another efforts to create rolling blackouts in CA?); we have values at the 5,000 foot level which point to rules and policies and cutlural behaviors (why does one company culture operate from a “give a person the benefit of the doubt” perspective, while another operates from “the next time, you’re fired” perspective?); we have values at ground level, which point to day-to-day execution, which point to how people are and what people do “at 9:00 Monday morning.”

For me, it begins and ends with values, what’s important to me, to the company, that drive the follow-on elements, vision, purpose, goals, execution, timing, customer relations, etc.

The “what” “when”, “where” and “how” all emanate from the “why”. Responses to the “why” at every level, determine one’s behavors, one’s goals, one’s execution, one’s rules and regulations, one’s timing, etc.

The challenge, as I see it, is how to ensure one is always taking the “high road” when it comes to values. Perhaps few ever step back, looking down from 25 miles out and ask, “why?” Really, really, really why? So, for me, the values I consciously choose that support me to move through the minutes, hours, days, weeks, months years and life are a function of asking and asnwering “why?”

Thanks for the invite to explore the question more deeply.

posted on January 13, 2007

Maureen Sharib said:

My ideas on what the most important key ingredients are for a company (or an organization)?




posted on January 13, 2007

John Dillard said:

David, I have been working as a consultant for about 10 years, mostly in strategy, and I have completely abandoned the terms ”


,” “Vision,” and “Values.” My clients have seen so many outrageously broad, meaningless jargon placed into these concepts that their credibility as useful strategic planning concepts has all but evaporated. Why?

1. They are insufficiently specific

2. The leaders ignore them, making their development seem disingenuous or a marketing drill

3. They aren’t the basis for reallocating corporate resources (people, time, money. (This is a big one—I often tell my clients that if they aren’t willing to make resource decisions based on vision/mission/values/purpose/objectives, etc. . don’t waste the time developing them).

I have NOT given up on what they were designed to do—focus an organization on the best few things to be successful. So how do you get there? I have had luck abandoning the jargon and explaining to clients that they need to have very precise answers to the following questions:

1. What does [company] do?

2. Why does [company] do it?

3. For whom?

4. Why is it valuable to them?

5. How do we do it?

6. What do we believe in?

In the terms you started this thread with, you might say that the above are actually:


2. Purpose

3. Customers

4. Value proposition

5. Core competencies and/or processes

6. Values and principles

The bottom line: these are all important concepts, but the taxonomy is the problem. As for importance, you have to start with #1 (what we do), but be ready to change it on a dime if your customers don’t see that as valuable.

Great question!!

John D.


posted on January 13, 2007

Wally Bock said:

Hi Damon,

I’ll resist making a call, both as an intellectual matter and a practical matter.

Intellectually, the magic is in the mix, it doesn’t start any one place. We talking about systems here.

As a practical matter, when I work as consultant or coach I encouter situations with a mix of all the things David listed and what others have said. Each one is different.

Vision might be there, but execution is non-existent. Or there might be a strong culture that doesn’t match up with the values in a value or mission statement.

The result, for me at least, is that I don’t find it productive to try and figure out which is the chief angel dancing on the head of this pin. I don’t state that as a universal approach that everyone should take, but it is mine.

posted on January 13, 2007

David (Maister) said:

This is a fun and interesting one, isn’t it? I don’t think it’s irrelevant or sophistry. Managers need SOMETHING to bind the organization together (other then a pay scheme.) All these words are different ways of trying to identify what that glue might be.

For me, the issue I wrestle with is the practical one: which is the best way of formulating and communicating the underlying decisions so that they actually do get used as “filters” for action, i.e., become real.

Like John Dillard’s commment above, I think all of these concepts have historically lost their impact – that’s why we keep coming up with new ones that we HOPE will influence the organization. When it falls into neglect or ambiguity (ie we make decisions on some other, contradictory basis) we invent a new concept to try and attack it a diifferent way with a new label.

Again, where I come out is any version that we know we actually are going to stick to. It is often clearer in the negative – we are NOT going to serve those clients, we are NOT going to tolerate this behavior, we are NOT going to offer these services. I don’t know whether to call this approach mission, vision, values, purpose, dirrection or anything else, but where it exists, it gives a clear rallying cry for people either to buy into or to leave, and it makes delegation od decision-making upwards, downwards and sideways aa lot easier. everyone know the REAL rules.

But this approach, like all the others, fails to work if there is too much ambiguity, ie. fine print that allows for numerous (too many) exceptions. It’s the failure to take a stand that causes problems, not what we call it.

posted on January 13, 2007

Daniel Scocco said:

could one say that values=culture, mission=purpose and direction=vision? I know they are not the same, but in my opinion those are very closely related terms.

if you accept that premise I would then say that the hierarchy is:

1. values

2. mission

3. vision

posted on January 13, 2007

Kishore Balakrishnan said:

One leads to another..

1) Values leads to Rules and Obligations leads to Culture

2) Purpose

3) Vision

4) Mission

5) Direction

posted on January 13, 2007

Tom "Bald Dog" Varjan said:

I believe “Rules and Obligations” documents all the other ingredients. I think when something is written down, it becomes the culture of the firm. We just have to include the Purpose,

Vision, Mission and Direction in the document.

It’s like not smoking in my car. Either I tell everyone not to smoke there, and ending up arguing with some and justifying my choice, or I display the written “culture” of “travelling in my car.” This will attract non-smokers, that is, the kind of people who fit into this culture.

posted on January 14, 2007

Danielle Keister said:

What an excellent question to ponder! Hmmm, for me personally, I think the the most important items would first be values and purpose. I simply cannot make money just for the sake of earning it, nor engage in anything that feels “icky” in order to make money. I just can’t separate my values from how I earn my living, so that’s very important. Rules and Obligations would fall naturally in order from there. And being very clear about my purpose, what I am in business to provide, I can then define my mission, vision, direction. The culture falls into place with values and purpose.

posted on January 15, 2007

Nagesh Belludi said:

David: Very interesting, diverse responses here. I believe this is how organizations evolve:

Fundamentally, an organization starts with a ‘need’. There needs to be a specific need or a customer whose expectations are not satisfied on one or more aspects: lower cost, additional productivity, enhanced experience, and so on.

The desire to fulfill this need becomes the purpose. Meeting the purpose becomes the mission. A set of core objectives to meet the purpose/mission becomes the vision. A course of actions to implement the vision translates into the direction the organization will take to meet the need.

The functional principles (ethical, rule abiding, transparent, etc.) of the organization define the values. A set of rules of membership follows to ensure elements of the organization (including people) adhere to the values of the company. The collection of various elements (people, environment, practices, etc) and what they stand for forms the culture of the company.

Example: The evolution of Google as an organization traced this path.

posted on January 15, 2007

Emmanuel Oluwatosin said:

What a company needs most are Vision, Mission Statement and the people.

Your vision needs to be explicit enough to express why you are in business.

Your mission statement should be able to give direction to your vision.

You need the right set of people to work the vision.

posted on January 17, 2007

Richard Becker said:

Great question David!

If I was going to force an answer, I would lean toward values, but then I fell into the trap of which comes first: the chicken or the egg? The values or the culture?

You inspired me to explore it further, and I reintroduced it on our blog. Again, great topic.

posted on January 17, 2007

Judith Erickson said:

Hi David:

I have to agree with James Mason: culture is the most important factor since most other organizational elements emanate from that. A company forms because it has a vison and a purpose. A mission statement, as we all know, can be merely a collection of nice-sounding words. Therefore, it can be essentially meaningless. However, how a company conducts its business depends on its culture. The culture dictates or determines its values (which, by the way, underlie consequent behavior); it defines its direction; it formulates the rules and obligations (and rituals); and – most importantly – influences the way employees and customers are treated. My doctoral dissertation was about corporate culture and its effect on injury occurrence so my literature search on the subject was rather vast. Authors your readership may be interested in referencing include Edgar Schein and Deal & Kennedy and, of course, Peter Drucker.

posted on January 23, 2007

Matthew Klein said:

David, what a great question. My order is as follows:

1) Culture (in my business, without the right people, we are toast)

2) Values (our values guide our culture and our service level)

3) Mission (quality talent wants to know where we are going and can organize their day-to-day if they have a clear direction) – I would argue that a mission that is relevant, attainable, and renewed at the appropriate time constitutes a “direction”, thus in my mind “mission” and “direction” are redundant.

4) Vision – The organization exists for a purpose. Again, I find that the question has redundancy in “vision” and “purpose”. They both express why the organization exists in my mind. I ask the guru (DM), are they one in the same? If not, what is the difference?

5) A set of rules and obligations – When it comes to professional services and the concept of “businesss 2.0″ there are few rules beyond true professionalism; risk=reward, people aspire to do great work and will do so if led in the right direction; and hire the best, give them what they need to do their job, and nurture their abilities.

I’d be interested in two things… what does the guru of PSF (DM), think and how do visitors to this site rank these items (check out http://www.flash-gear.com for a nice little flash-based polling system).

posted on January 26, 2007

Sudhir Hasbe said:

To be successful company needs a culture based on values which supports the mission statements which is derived based on vision. Great question and some great responses.

posted on February 11, 2007

Ashutosh Wakankar said:

Hi David

If we look at it as sequence of events in the life of a company before a virtuous cycle sets in reinforcing each element— I would say a business gets created by identifying a need i.e. customers in the market. It then becomes a company when a set of like minded people come and stay together around that need (although it could happen the other way round also with a group of like minded people figuring out a business to be in a la Sony) so shared values (or culture) keeps these people together… and this can become an enduring company if it looks at its business with a sense of contribution i.e. a purpose beyond making money. And it will become a visionery company if it develops a strong sense of direction early on in its life rather than being subject to environmental forces and opportunistic behavior.

In my consulting I have tried to study most of my clients with the Built to Last framework where Vision is a combination of values, purpose and a long term goal.

What I have found most often is the presence of a value system which is the glue keeping it all together. What is most often lacking is a sense of purpose and direction.

The growing Indian economy keeps this virtuous cycle in place and the core team sticks together trying out every new opportunity that comes up in the environment but there is no real sense of strategy and trade-offs that seems to exist. I am also of your opinion of inculcating strategic behaviors rather than developing any long term road-maps and annaual plans.

One hypothesis I have is that most strategic calls get taken by a sense of identity that the management has of itself (this is our kind of opportunity and that is not) rather than any serious analysis of market opportunity or competencies (they come into play only when they desire excellence which is very often not the case). So, if as a consultant I can help clients become more self-aware by putting them in touch with their core values then an entity may emerge over a period of time that is differentiated in the market by what we call organizational culture.

One may wish to give them a long-term strategy articulating in great detail on a quarterly basis what they should be doing..however it is likely to get thrown out of the window the moment first unpredictable event takes place in the envirnment. And environment is only getting more unpredictable.

So, for an established organization I would focus most on discovering core values and illustrating it with actions/tradeoffs/rules etc.

for a new startup, i would focus on understanding the nature of the market opportunity.

Ultimately, it is all about finding, articulating and sharpening a difference you can preserve and at various lifestages of a company, these would be my priorities.

posted on February 22, 2007

Ponnuchamy said:




4.Set of “Rules and Obligations” for membership




This is my corrected prioriety list


Audio Editor Developer

posted on March 11, 2007

Stuart Cross said:


Let me give a personal (and late) perspective on the discussion. I don’t know about you or the other correspondents but when I set up my own consulting business the thing that got me most excited, focused and motivated was the purpose, the difference I could make in the world.

For me defining the purpose of my business has helped set all the rules that follow. I am sure that the purpose is based on values, but until the purpose was defined these felt somehow abstract.

I would be interested in which of the elements have been instrumental in driving your own (and everyone else’s) business and career.


posted on March 20, 2007

Tony Rice said:

I think there is one crucial item missing from the list and that’s the Value Proposition on offer that customers want and everyone in the company believes in. I’ve been in too many mission statement workshops that manufacture useless words and seen too many companies talking About Us than about their clients. With this in mind I would put Vision at the top, followed by Value Proposition second.

posted on April 2, 2007

Billy Mayers said:

Competent direction to my mind is the most important. Then follow the values.These things provide stable work.

posted on May 7, 2007