Page 218 - Performance Leadership

Chapter 11 The Return of the Mission Statement • 207

back on the recognition of brand identity and brand loyalty, as one of
the instruments that can be used to strengthen the brand if it’s not in
the mission statement.
Economic value added (EVA) can be of help in creating the right
focus. EVA is a financial formula: the net earnings minus an appropri-
ate charge for the opportunity cost of all capital invested in an enter-
prise (capital charge). It requires management to focus on margin and
invested capital. One can focus on margin by rigorous cost control in
combination with minimizing price erosion. For strategic initiatives,
there should be a concentrated discussion about whether they are to
be funded by capital expenditure or out-of-pocket expenses, to maxi-
mize the return. It is also important to perform a compliance bench-
mark once in a while, to determine if the company indeed is complying
with the highest standards.
Although the mission statement can be translated effectively into the
right performance indicators, we do not gain any insight on the
specifics of the industry or the business model of the company from
the mission statement.
Key performance indicators of shareholder value include:

• Margin
• Profitability
• Return on capital employed (ROCE)
• Compliance benchmark

Customer Value
There is a gray area between brand value and customer value. The
subtle difference would be in how the customer value proposition is
translated. Brand value propositions describe the customer advan-
tages in terms of what the products will do for them. Nike will bring
innovation and inspiration. Anheuser-Busch brands will bring enjoy-
ment. Customer value is just slightly different—it describes the result,
such as a pleasant customer experience, or more tangible results,
such as having to spend less effort, cost, or time on a certain service.
Let’s look at the mission statement of British Telecom: “Primarily, we
are passionate about customers. Every time we have contact with a
customer, our aim is to deliver an excellent experience.” It is the