Committed to growth.

“We have a leadership position in UVs, while two-wheelers and trucks are adjacent to our core business. When I joined the company in 1991, I was advised to get out of the automotive business, as ‘we had no hope of getting scale in automotive’. Fortunately, we proved them wrong. We invested in the Scorpio, we invested in technology.
But where I think scaling up is required, is in the back end. We have to mimic the scale of the major players. And, if we are in other areas of mobility as well (two-wheelers and trucks), then the combined scale grows larger.
The important thing is that the front end of these mobility businesses stays independent and is agile and quick. But, in the back end, when it comes to R&D, purchasing, logistics, as well as human resources across these groups with similar competencies, we are beginning to mimic a far larger mobility organisation.

We are committed to growing our presence in commercial vehicles business through our truck and engine manufacturing companies. We would focus on further leveraging synergies between these two businesses and the Mahindra group to make the commercial vehicles business a success.”

…. Anand Mahindra, Mahindra & Mahindra, Business India March 17, 2013.
While a vision statement answers questions like…
Where we are going?
What do we aspire to achieve? And speaks of
Hope & Ambition
A mission of the organization should answer questions like…
What do we do?
Who do we do it for? And speaks of

The Motivation & Purpose

A mission is a general expression of the overall purpose of the organisation, which, ideally, is in line with the values and expectations of major stakeholders and concerned with the scope and boundaries of the organization. It is sometimes referred to in terms of the apparently simple, but actually challenging question: “What business are we in?”

Mahindra & Mahindra’s farm equipment division, though non-glamorous, is backbone of the company. From being one amongst the four or five tractors companies, M&M became world’s largest tractor selling company (by volume) in 2009. Company expanded its capacity by building up scale in small, medium and large horsepower (HP) segments. More than expanding the product range by entering the lower and the higher end HP segments, company’s initiatives aimed at changing the very DNA of the division are particularly noteworthy. Mr. Anand Mahindra’s vision was to “Bringing prosperity to the farmers” and the “objective was to enlarge the value space of brand Mahindra and move the brand from the tractors the agriculture value space by delivering farm tech prosperity .”
M&M created a separate vertical, AppliTrac, a centre of excellence with design, development and manufacturing facilities. Launched a host of farm equipment, like the Harvester combine wheel track. To mitigate the growing labour shortage in the country, a rice-transplanter was introduced in

Punjab and southern markets. Considering that most of the farmers having insufficiently large tracts of land to justify investment for costly equipment, M&M launched tractor mounted harvest, which besides solving the on-going labour shortage, resulted in uniform spacing and rationalising the seeding process, all of which resulted in improving productivity and quality.
Apart from expanding the farm equipment range, with the objective of providing total solutions to farmers, opened Mahindra Samriddhi centres or knowledge centres, which also have laboratories for soil testing and offers advice to farmers in getting the best crop for the soil. With a view to allow farmers to get a fair price for their products, in a limited way company started buying their produce. Company started exporting grapes and emerged as one of the largest grape exporters from India.
Pawan Kumar Goenka, Managing Director of Mahindra and Mahindra Limited, foresees the “FES division by 2020 will be more of an agri-company rather than a tractor company” .
Chief Executive, Tractor and Farm Mechanisation Business (Farm Equipment Sector), Bishwambhar Mishra, Pawan Kumar Goenka and Mr. Anand Mahindra all set out with the mission.

Thompson states mission as the “essential purpose of the organization, concerning particularly why it is in existence, the nature of the business it is in, and the customers it seeks to serve and satisfy.
The above definitions highlight following points:
i) Mission is the essential purpose of organization.
ii) Mission answers “why the organization is in existence”.
iii) Mission is the basis of awareness of a sense of purpose.
iv) Mission fits its capabilities and the opportunities which government offers.

M&M’s FES division’s essential purpose was to ensure farmers get a fair price for their products. It initiated Samriddhi centres, extended product lines with a sense of purpose. The mission did fit with its capabilities and the opportunities which government offered.

In the last chapter we have seen the difference between vision statement and the mission statement. We have also seen why and how the vision and mission statements are effective. As we have discussed Vision is for someday whereas Mission is for everyday. To be effective, a mission statement must possess the following essential characteristic:
i) A Vision statement is where the organization would like to be someday the mission statement is about today, every day. Thus the mission statement should be realistic and achievable on day to day basis. Unrealistic statements do not motivate people. Aims should be developed in such a way so that may become feasible.

Anand Mahindra started restructuring the company since 1990s. The aim was to transform M&M from an underperforming, overstaffed, low profit automaker to an industry leader. Labelled an old economy company which could not survive in the rapidly shifting, liberalised environment from competitors in India and overseas. A plethora of businesses build during the license Raj saw the company venture into unrelated businesses, like oil rigs, instrumentation, elevators and sintered products. Notwithstanding the ongoing restructuring started in late 1990s and early 2000, M&M was still looked on as a proxy for rural play with its fortunes largely linked to the weather Gods benevolence.
Some of the key measures undertaken can be broadly classified as creating value for shareholders through its focus on R&D, innovation, quality and customer-centricity .

ii) As the mission statement should be realistic and achievable it should be precise as well.

Neither too broad nor too narrow. A broad mission statement may become meaningless, whereas a narrow mission statement limits an organizations activity. M&M FES division had a clear objective as put by Mr. Anand Mahindra, “The objective is to enlarge the value space of brand Mahindra and move the brand from the tractors the agri value space by delivering farm tech prosperity.” This led to creation of AppliTrac and host of farm equipment.

iii) Since the mission statement is action oriented, mission statement should not be ambiguous. At the same time articulation of the mission statement should not be philosophical as it does not give clarity.

iv) To be impactful the mission statement should be distinct.

v) Organizations operate in an external environment which impacts long term sustainability. Vision and mission statement thus should have societal linkage. Linking the organization to society builds long term perspective in a better way. E.g. creating job opportunities, reinvesting profits etc.

vi) As has been pointed out earlier the business environment is dynamic. The mission statement thus should not be static.

vii) Motivation can be defined as a need that is sufficiently pressing people to act. Mission statement being action oriented, it should be motivating for members of the organization and society. The employees of the organization may enthuse themselves with mission statement.

viii) The mission statement should indicate the process of accomplishing objectives. The clues to achieve the mission will be guiding force.

Objectives and Goals
Having determined its mission, the organization’s objective, preferred future positions that it wishes to accomplish, should be ascertained. Organizational objectives are defined as ends which the organization seeks to achieve by its existence and operation. Objectives denote sought after results which the organization aspires to accomplish. They indicate the specific domain of aims, activities and accomplishments. An organization can have objectives in terms of profitability and productivity. Objectives offer a path to the organization and all the divisions work towards the accomplishment of the set objectives. Objectives and goals are the terms which are used interchangeably.
Organization must assess the process identifying the objectives of each functional area. Once these objectives are accomplished, the overall objectives of the organization are achieved. Organization’s mission is the foundation for strategy. Objectives are other factors which determine the strategy. By choosing its objectives, an organization commits itself for these.

Once the company values are determined and vision statement drafted, company has to accomplish its mission. A mission is for every day.
M&M transformed itself in the changing business environment with clear values, vision and mission.
On quality front, company’s focus on R&D, innovation, quality and customer-centricity led to delivering value to customers. For the quantity company leveraged its group companies. Quickness in responding to customer needs was through timely launching products to customer needs. Strategy was to offer affordable product to farmers, building its relationship with all stakeholders, and responding quickly to customer’s need, transformed the company.
Company re-structured itself and integrated well with acquisitions. M&M’s joint ventures, the ones with Ford and Renault did not last long. For growth in the commercial vehicles business company leveraged synergies between truck and engine manufacturing. Launched new models. A system of having a unified back-end in R&D or pooling of sourcing requirements was a big plus for the group despite having a different front end.

References:

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Johnson, Gerry; Scholes Kevan (2001) Exploring Corporate Strategy, Text and Cases Sixth Edition
Turbo Charged, Business India, March 17, 2013 Dakesh Parikh
ibid
Tompson, J.L. (1997). “Strategic Management: Awareness and Change”, International Thompson Business Press, London.
Re-making of M&M, Business India March 17, 2013