What is a Company Mission Statement?
Organizations with a clear strategic focus have written mission and vision statements. A company mission statement communicates — most often in writing — the firm’s reason for existing; it defines your organization’s values and governing principles. The mission statement explains how the organization aims to serve its stakeholders, such as customers, employees, shareholders, and the community.
Organizations with a communicated mission and value statements that align with their strategy, goals, and objectives outperform companies that do not have them. Not all organizations have a mission statement. Some have simple mission statements; that is, they are not written for all to see. Even with a casual mission statement, these organizations still follow and behave in a manner consistent with their purpose, providing a competitive edge over organizations without mission and value statements.
The Four key points of a mission statement include:
- They describe the organization’s purpose or reason why they exist.
- Focuses on the present.
- Part of and critical to the strategic and marketing plan.
- Corporate decisions must be in harmony with the mission statement.
Why Should A Company Have A Mission Statement?
Companies that have a formal written mission statement achieve at minimum three primary purposes:
- Inform stakeholders of the reason for the company’s existence.
- Dispute resolution for the company’s future direction.
- To serve as inspiration for employees and management within the company.
The written mission statement provides transparency to a firm’s stakeholders, customers, investors, employees, and business partners about their goals and objectives and the reason the company exists and what it is trying to achieve. If all stakeholders understand why a company exists and their specific goals, they can work together to help the organization meet its mission.
Imagine a firm without a mission; all sorts of issues may arise that could lead the company in a direction that it did not want to venture toward. As an example, take a look at Google’s mission statement:
“Our mission is to organize the world’s information and make it universally accessible and useful.”
In 2012, Google purchased the mobile phone handset giant Motorola but later sold it in 2014 to Lenovo. The acquisition did not necessarily fit Google’s mission but served a strategic purpose, with the notion they would sell the company, which they did in 2014.
Let’s assume that a manager within Google wanted to continue pursuing the handset market. Google executives could say that the products do not fit with their core mission and focus on what’s close to their purpose, thus avoiding any potential dispute with internal teams, shareholders, and customers.
Good corporate missions provide employees with a purpose to feel good about what they are doing for their organization and the world. Most employees like to think that they are part of something more significant, something that positively impacts the planet. A good mission statement provides this type of motivation and inspiration for employees and managers of the organization. As an example, Twitter’s mission statement is short, simple, and inspirational:
“To give everyone the power to create and share ideas and information instantly, without barriers.”
Characteristics That Make for a Good Mission Statement
Not all mission statements are reasonable statements. They do not inspire, nor do they focus on the customer or some social value. Four characteristics that make for a good mission statement are:
- Unique and emphasize the creation of a customer or social value.
- Stay focused on solving customer needs or problems.
- Employees know, understand, and practice the mission statement.
- Inspiring, brief, and memorable.
Customer or Social Value and Unique
Effective missions are unique to the business and emphasize the creation of some customer or social value. Examples include improving the lives of people’s health or improving the quality of their lives. Mission statements should stay clear of communicating “being the best” at something or just making money. Focus on the positive impacts the business makes.
Solving Customer Needs or Problems
Weak mission statements often fail to address customer needs or problems. They become myopic and focus on their product or service, resulting in product-focused rather than people-focused missions. A compelling mission focuses on “selling” the problem they solve and not the product they sell. Organizations that fail to address or focus on customer needs and challenges may become obsolete as new technologies and trends emerge.
Effective Missions are Lived and Practiced
A mission is only useful if it is lived and practiced by the company. Regardless of employee size, a good test in determining if the mission statement is meaningful is if regular employees can explain the company mission statement and use it to guide their daily work and decisions. A great way to incorporate the mission statement and get employees to learn it is to have it posted throughout the organization and provide employees with a mission statement card that they can carry around as a reminder of their overall mission and goals.
Inspiring, Brief, and Memorable
Good mission statements should be brief, inspiring, and memorable. Being succinct allows employees and managers to remember and use them all the time quickly. Some examples of inspiring, unforgettable, and brief mission statements include:
“Uber is evolving the way the world moves. By seamlessly connecting riders to drivers through our apps, we make cities more accessible opening up more possibilities for riders and more business for drivers.”
“To build the Web’s most convenient, secure, cost-effective payment solution.”
“Our deepest purpose as an organization is helping support the health, well-being, and healing of both people – customers, Team Members, and business organizations in general – and the planet.”
“To enable economic growth through infrastructure and energy development, and to provide solutions that support communities and protect the planet.”
Without a communicated mission statement, a business does not have a clear goal or objective. Mission statements are like road maps for a journey; without a plan, you may have a tough time reaching your destination, if at all. Planning and preparing ensure that you have a clear path to your final destination. The mission statement is a firm’s roadmap.