On a number of occasions during my career, I have been part of teams tasked with writing an organisational mission statement. When managers have approached the team the task the response has been one of despondency. “it isn’t my job to define the corporate mission”, colleagues have complained. “This is not part of my job”, they gripe. “Surely our mission is obvious”, they grumble.
Often the document produced is bland, generic and tells stakeholders nothing about the individuality of the organisation.
But a clear mission statement which defines the unique purpose and which distinguishes your business from that of competitors is critical to the business planning process. The mission statement should also define the boundaries within which you want your organisation to operate.
A properly drafted mission statement combines your primary objective and your core organisational values.
There are four major influences on the content of a mission statement.
- Corporate Governance: To whom is your organisation responsible? What is the regulatory framework in which you operate? Who oversees your organisational executive? Who does your organisation serve? What constraints are placed on senior management to ensure the rights of stakeholders are upheld?
- Stakeholders: Who are you customers? Your suppliers? Shareholders; Distributors: Retailers; and the wider public. Are your organisational policies equitable to all groups or do you favour particular stakeholders? What power and influence does each group wield?
- Business Ethics: What are your organisation’s views on social and corporate responsibility? What are the cultural attitudes and beliefs of the society(ies) where you operate?
- Cultural Context: Your mission will be affected by the cultural environment. there will be the internal culture of your organisation and the external culture of society. Both must be reflected in a mission statement.
Often mission statements are either too narrowly or too broadly defined. An American shipbuilding firm’s mission statement simply says, “We make good ships”. this statement has only a product focus and tells you nothing about the organisations wider values and the environment within which it operates.
The mission statement of Scottish Power appears to be too broadly defined:
“To be recognised as a highly-rated utility-based company trading in electricity, other utility and related markets, providing excellent quality and service to customers and above average returns to investors”
What does the Scottish Power say about the organisation. The mission statement appears to be saying the obvious, it appears generic and trying to be all things to all stakeholder groups. If anything, it reflects the public sector, bureaucratic history of the organisation.
Richer Sounds, the specialist Hi-Fi and home electronics retailer has a mission statement which doesn’t mention electronic audio; although it does say work should be fun.
Is your mission statement too broadly or too narrowly defined?
Successful mission statements are:
- Credible: It should reflect realistic ambitions from the view of your stakeholders?
- Specific Capabilities: Embrace your core expertise. Relate that expertise to your organisational future.
- Aspiration: The mission statement should act as a source of motivation to the people in your organisation. This should matter more than financial returns. The mission statement must make individuals want to commit to your organisation and encourage internal stakeholders to make valuable contributions.
However, you need to define the boundaries of your ambition within a mission statement.
- Product Scope: How do you categorise your products? Do you do so in technological terms? Do you offer different products in different target markets or segments? Do you categorise products individually or collectively?
- Market Scope: Who utilises your products? Are you focused on a B2C or a B2B market? What demographic groups do you target? Do you target particular industry segments? What distribution channels do you use? What features of the consumer do you target?
- Geographic Scope: Are you a ‘local shop for local people’? Are you regional? Are you national? Are you international?
- Stakeholders: You need to consider both internal and external stakeholders. Internal are stakeholders with a particular interest in your organisation. Michael Porter talks of five internal stakeholder groups – ‘The Five Forces’ affecting an organisation. This includes staff and unions, shareholders, management and business owners. There are primary and secondary external stakeholders. Primary external stakeholders include suppliers, distributors, financiers and your competitors. Secondary external stakeholders have a looser relationship with your organisation and include government agencies, local government, political pressure groups and society in general.
As the aim of a mission statement is to give clarity to your business purpose, it cannot be bland or poorly defined. Some firms use the mission statement to declare strategic intent. Others prefer to declare such intent in a separate vision statement.
You may receive the following attitudinal responses to the idea of a mission statement:
- Faint Support: Stakeholders will pay lip service to the mission statement especially if it is dominated by the views of management whose attitude is that stakeholders and corporate governance are constraints on the organisation.
- Passionate Support: This is where the mission statement is central to the values and philosophy of managers. The mission statement becomes the driver of corporate aims and aspirations.
- Dissipated Mission: Strategic decisions are the responsibility of external stakeholders concerned with corporate governance and regulation. This is common in public sector bureaucracies. Sometimes the mission becomes lost; dominated by day to day management and tasks. This was a criticism of BS5750 companies before the standard morphed into ISO9000 series. Firms using the standard were criticised for having incredibly well documented systems despite the product of those systems being poor. The mission focus appeared to be concentrated on process and not the results of that process.
- Non-consensual Mission: Passionate external stakeholders dominate your mission, particularly those stakeholders with strong ideological views. It becomes impossible to create an organisational mission which satisfies all stakeholder groups’ demands. Your mission may become highly political. An example is the nationalised industries of Britain in the early 1970s. The country entered a period of industrial strife as unions argued that the organisational mission was to satisfy the demands of their members, not the customer, not management and certainly not the demands of government. If your mission is non-consensual, your organisation will suffer.
A mission statement is a reference point for your strategic decision-making. It is therefore critical that you take time, thought, and care over its development.