Strategic Statements

Episode 12 Vision, Mission, Values

Hello and welcome to get Flushed, the sanitation podcast. My name’s Pete and I’ll be your host. This podcast is proudly sponsored by Sanitrax International, the world’s leading provider of modular vacuum flushing restroom systems.

The past few episodes of Get Flushed have mainly focused on and explored the operational side of the portable restroom industry. I’ve looked at how and when to clean toilets, the process used to inspect toilet on site and how operators can collect and share feedback on cleanliness and presentation. That all makes sense because the industry is, after all, very hands on. Providers deliver toilets to site, they go back to clean them and remove the waste and they pick them up at the end of the hire.

This week, I want to change tack completely by looking at the industry through a high-level strategic lens. What do I mean by that? Well, I want to think about WHY restroom operators go into business, how they set the direction and purpose of their company and some of the pitfalls that I see when I look more closely at restroom providers around the world.

I’ll start by saying that the word STRATEGY is possibly one of the most widely misused and poorly understood words I hear used in business. I worked in one organization where managers talked about strategy all the time. Every decision and their entire performance reporting process was geared around their strategy. Now that should make a lot of sense, but this organization didn’t just have one strategy. That had dozens of them. They literally had a strategy for everything. A recruitment strategy. A procurement strategy. An estates strategy. An IT strategy. A welfare strategy. They even had a strategies strategy. And each strategy was accompanied by a lengthy written document that described and detailed every last component of….well….that particular strategy.

Now I’m happy to accept that people use technical terms like strategy in different ways. The managers who led the strategic approach in that organization could probably justify their rather liberal use of the term. But for me at ground level, none of it made sense. And a lot of other frontline staff felt the same way too. I know that because we used to play buzz word bingo whenever the managers spoke in staff meetings.

LAUGHING EFFECT

When I studied management at college, I learnt about competitive advantage, which economist Michael Porter described as the ability gained through attributes and resources to perform at a higher level than others in the same industry or market. In other words, what can you do to make your firm stand out?

Porter and other writers identified three main strategies that companies can use to gain a competitive advantage over their rivals:

• Cost Leadership

• Differentation

• Focus

Let’s look at each of those in turn.

1. Cost Leadership

In cost leadership, companies gain an advantage by keeping the costs of production or delivery as low as they possibly can. They may be able to use economies of scale, proprietary technology, preferential access to raw materials and other factors to keep their costs down.

If they can achieve and sustain overall cost leadership, but at the same time charge the same or similar price as everyone else, their margins will be better making them more competitive.

A variation of Cost leadership is Price Leadership, where you commit to selling your products or services at a lower price than everyone else. But to achieve a competitive advantage as a price leader, you have to achieve scale. One sale at $50 won’t make you rich. A thousand sales at $50 might do. But of course, if each sale costs you more than that costs, you’re likely to lose your shirt.

And I think that’s where many restroom operators get confused by these two strategies. Reducing your costs will only give you a competitive advantage if you maintain a good price. Reducing your price only works if you sell more than anyone else. You can’t do both and you certainly shouldn’t pass your cost savings on to your customers in the form of lower prices.

2. Differentiation

Companies that differentiate seeks to be unique in their industry. They look for a particular need or an angle that customers value and they position the company to meet those needs. More often than not, that uniqueness comes at a premium price. One commonly quoted example is Rolls Royce who differentiate by producing very high quality motorcars that everyone associates with luxury and high value. Differentiation is hard in an industry where everyone uses pretty much the same toilets to provide the same service. But it is possible if you provide high spec luxury toilets, vacuum flushing toilets or an attendant.

3. Focus

The generic strategy of focus rests on the choice of a narrow competitive scope within an industry. In other words, they target a particular market segment or type of customer and tailor everything they do to serving them. In the restroom world, we see this in companies that only service residential construction or only supply events.

Analysis

Porter argues that successful organisations choose one strategy and they stick with it. And that makes sense because you can only go in one direction at once. That said, Porter’s book was published over 40 years ago and we’ve seen some pretty significant changes since then. Really big companies like Toyota has evolved different brands, with each one adopting a different approach. Lexus as a luxury brand, Toyota as the mainstream and Daihatsu aimed at the lower end. And of course, they achieve cost leadership through economies of scale, automated production, shared platforms across their vehicles range and using their own channels for parts and distribution.

Some observers might not associate the portable restroom industry with high end management theory, strategic language and very precise terminology. After all, it’s essentially a simple service that meets basic human needs. And regardless of which make of portable restrooms you use, they are essentially the same plastic cabin with a holding tank. They all look very similar and they all perform the same function.

I’d counter that by saying that establishing and running any business requires time, effort and money. And when there is any investment at stake, it pays to get all your ducks lined up in a row. If you get it wrong, your business will fail. And depending on the legal structure, you as a business owner could find yourself personally liable for any losses incurred.

I’d like to look at why I think it’s essential for PROs to have very clear and concise strategic statements that actually help the staff to do the things they need to do in the way they need to do them so that business achieves what the owners want it to achieve.

This is important because it’s about making sure your customers receive the level of service and quality of service they are paying for – no more, no less. Deliver more than that and you’ll chew into your profits. Anything less and you leave the customer feeling short-changed.

This is a good point to take a closer look at some strategic terminology. I’m going to be very careful because these words are very often mis-used, which turns them into jargon. And as I’ve already said, different people use these terms in different ways. So it’s important to be precise.

I’m going to use FOUR terms

Purpose Mission Vision and Impact

Again, let’s look at each in turn.

When mapping any business, it’s important to start with the organisation’s Purpose. This proceeds everything else and it should capture the very essence of why the company exists. And the reason why you are in business should be guided by deeply held values and beliefs that drive action and behaviour throughout the entire organization. A clear Purpose statement explains why the organization exists and why it does what it does.

The next element is the Mission. This is the path that the company intends to follow or How it intends to bring its Purpose to life. A good mission statement will drive the every decision made by the company, its managers and employees. It will help them unlock the competitive strategy and deliver results. If an action doesn’t fit the mission, everyone should ask why they’re are doing it.

The third element is Vision . Now vision and mission are often inter-changed, but there is a difference. The Mission is how we get there. The Vision is where we are going. A good vision statement will be driven by the organizational purpose. It will unite managers and staff, define results and help turn the mission into action.

The last element is IMPACT. This should include the strategic goals that will show that the organizational purpose has been achieved. Above all, impact is tangible and measurable over time.

ANALYSIS

While it’s important to understand these terms and acknowledge why they are required, developing strategic statements is an entirely different challenge. Complex organisations spend millions of dollars on this. They employ specialist advisors to consult managers, staff, investors and other stakeholders. The perform risk assessments and cost-benefit analysis and they wring themselves dry trying to perfect their strategic language. And does anyof that help? Does all that expense make those organisations any more effective? Do managers and staff really live by the vision and mission in everything they do? Or is it all just smoke and mirrors?

One of the problems I see is where restroom divisions form part of a larger umbrella organization. This typically occurs in plant hire companies where toilets are offered as an adjunct or ancillary service. That’s a very common model in many parts of the world. Larger conglomerations like that are often owned by investment groups and managed by a corporate body or head office. Local managers are appointed to run their depot or branch under the direction and control of the head office. Compared to specialist restroom operators, the blended approach can sometimes be less effective because the corporate language doesn’t reflect or acknowledge the specific needs and requirements of the portable toilet division. Even worse than that, corporate strategies designed for long-term plant hire and support don’t always make clear how – or where - the restroom managers should compete.

I’d like to drill down into some of the strategic statements published by restroom operators that I found online as I researched this episode. In the interests of fairness, I’m not going to name the companies that published these. I haven’t spoken with these companies, I haven’t asked if I could use their statements. While it wouldn’t really be fair to critique them without giving them a right to reply, these statements are online and in the public domain. That in itself must be commended. Whether they are right or wrong, good or bad, the fact that these statements exist and have been published shows that these companies at least had the right idea and intent.

EXAMPLES

The first strategic statement I found read “Our mission is to be the premier restroom provider in our local market.”

While there’s nothing wrong with aiming to be number one, it’s important to quantify and qualify that statement to show exactly what you mean. Is it number one in size and scale? Do they aim to have more toilets, more trucks, more drivers and more customers than anyone else? Do they just want to be first company listed in the phone book? Or do they want to be the first company that people think of and call when they want a portable toilet in that city or state. Of course, the challenge with each of those interpretations is that they can’t really prove any of it.

The next section of this strategic statement read “We continuously deliver superior service to our customers, retain high quality employees and increase stakeholder value”

I actually like that. It’s clear, its concise. Each element can be measured and the whole thing tells everyone in the business exactly what is expected and required.

The next one (onsite.co) I found read:

We will be the most reliable company within our industries, employ talented people who quickly respond to and solve problems for our customer and our company. We will continue to reinvest in our company to maintain a prosperous, healthy and rewarding work environment.

While I like the ambition to be the most reliable, I’m wondering how on earth they measure that without access to other provider’s performance metrics. And what happens when they have an unexpected breakdown? It might be better if they rephrased that to read “We put reliability first”.

While I’m not sure what they mean by talented people, I do like the way this statement defines the attitude and behaviour this company and its customers can expects from its staff.

The third statement I found is one of the best. It read “Our purpose is to supply our customers with the best possible portable portable toilets and handwash stations and service”. I really like that. It’s precise and it really sets the tone and direction for everything else in the business.

Here’s one more:

We aim to deploy the best people, equipment and solutions to help our customers to safely build a better and stronger future

I really like the first part of this one. It makes a clear link between people, equipment and solutions, which I take to mean the options, decisions and advice offered by staff. I’m less convinced by the last bit “Help customers safely build a better, stronger future.” Maybe it’s me, but that’s waffle. And while it’s important to support your clients, building their future is up to them.

A similar theme came through in the next one:

“We strive to always be there in tough situations for our customers. Becoming the best portable toilet rental company means we provide the same level of reliability and professionalism with every customer situation”

That’s great of it’s actually true.

And the last one I’m going to share today read:

“Our vision is to be a professional, skilfully managed organization that exceeds our customer’s expectations.”

Again, I don’t have any issue with being professional and skilfully managed. But I’m not sure it really makes sense to exceed your customer’s expectations unless you’re charging a fair price. If you buy a car, they don’t fit alloy rims or air conditioning unless you pay for it.

The last one I want to share today reads:

we take pride in the work and services we provide to our clients. Our goal is to achieve industry best practice by:

• Continuously improving waste technology

• Reducing the impact of waste on the community and the environment

• Providing quality service, while minimizing customer costs

• Maintaining a high standard of operational safety to protect our employees, customers and the community.

I really like this one. Although it doesn’t separate the Purpose, Vision, Mission and Impact, it actually combines them and covers them all.

I’ve done nothing today to consider if any of these statements are true. I can’t prove whether any of these strategic statements are driving behaviour in the companies behind them. Today’s episode wasn’t about that. I would congratulate all of them for actually having a go and making their strategic statements public . As I said, writing strategy is tough work. Putting it into practice is even harder still. If any of it was easy, every business would be successful and every entrepreneur would be a gazillionaire.

LINK MUSIC

The one thing I noticed among all the different companies I looked at was that none of them explained why they were in business. They pretty much all said WHAT type of service they were there to provide – portable restrooms or sanitation services – but none of them identified WHY they were in business.

In my book, one of the primary factors driving any restroom operation is money. Why else would you invest your heart and soul in a commercial enterprise if not to make a profit? And yet not one of the company websites I reviewed mentioned revenue, earnings, shareholder dividends or profit as a reason why they were in business. Perhaps I’m being naïve. After all, it’s not polite to talk about money in public. And I understand that such information is commercially sensitive and so not shared in the public domain. But making money through a commercial venture is a legitimate and measurable reason for that business to exist.

That has been a very superficial analysis of strategic direction and I’m sure we’ll come back to this in more detail in due course. Precise definitions and management models allow us to simplify complex realities so that we might understand them more fully. By that definition, they are simplistic and naïve. And of course, there’s always an alternative view.

If you want to discuss this more, why not join the Sanitation Conversation on Clubhouse. Get in touch if you need an invite to use the app or log on and search for Pete Get Flushed or the Sanitation Conversation to join in the debate.

I’d also like to let everyone know that on Sunday May 30th, at 6pm Easter Standard Time, I’ll be broadcasting live as part of The Podcaster’s Collective on Facebook. The collective is a public group for podcasters and listeners. And they started A Sunday Showcase to help podcasters like me share their work and build the audience for their shows.

The Sunday Showcase will be the first time that I’ve produced my own live episode and I’m really looking forward to it. With the right technology, I’m hoping to have phone-in guests and take live questions. If there’s anything you’d like me to cover, get in touch through social media or email [email protected] and I’ll try to include it in the show.

Ok, that’s it for today. Please remember to tell everyone about the show and visit our patreon page – p a t r e o n.com/getflushed to secure early access to every episode and bonus material not available elsewhere.

Once again, Thank you for your time. I’ve been Pete and you’ve been listening to get Flushed, the sanitation podcast, which was brought to you by our strategic partner, Sanitrax International.