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Why Company Mission Statements Suck

Back when I was a kid in the 1980s, I attended one of my father’s business classes that he taught at a University.  As an awkward 12 year old, in a class of what seemed like adults, I learnt about vision and mission statements.  It made total sense and I fervently believed all companies needed to have them.

Years later, when I started work, I’d always read the company’s vision and mission statement, almost reverentially.  Mistakenly believing that just because they had one, they were a great company.

Despite my naivety, there was some truth to my misplaced love of vision and mission statements.  A study by Bain and Company found that companies with clearly defined vision and mission statements that are aligned with a strategic plan, outperform those who do not.  While a study in the Journal of Applied Management and Entrepreneurship by Smith et al (2003) found that after the creation and introduction of mission statements, company performance increases by about 50%.

But here’s the thing.  Just because a company has a vision and mission statement, doesn’t mean they are any good.  In fact, sometimes they’re not even worth the piece of paper they are printed on.  Often, they’re uninspiring, superlative-spewing jargon with no meaning whatsoever nor any semblance of actual reality.  Little wonder they inadvertently cause damaging cynicism amongst employees when leaders pay lip service to them and when they don’t embody the ideals.

Clarity of Purpose

For a mission statement to be of any value it needs to be clear and well-specified, in order to eliminate uncertainty, ambiguity and confusion.  A clear and meaningful purpose enables employees to know what to do and how to operate according to the company’s expectations.  It provides people with a greater sense of purpose, energy and direction in their day to day activities.  It also provide employees with one or two key goals that define what success means to the organisation.

Without clarity of purpose, organisations waste enormous amounts of time and resources doing ‘busy work’ that leads to the wrong outcomes.  Properly articulated, a clear purpose makes it much easier to create new strategies and improve the allocation of resources, budgets and time.  As management guru Peter Drucker once said “The key is not how to do things right, but to do the right things.”  Many companies have failed not because they were lazy and not working hard, but because they were foggy on what they were doing and did work with no positive impact on their future.

What We Do

What makes most mission statements so bland and forgettable is that tend to solely focused on the what (the outcome).  Ironically, while organisations believe they are providing their workforce with an engaging mission, they’re actually tuning people out. Focusing on the what or the outcome leaves too much undefined as there is no clear definition of what’s required.

For example, take the general corporate outcome of continuous improvement.  Including this in a mission statement is actually frustrating and meaningless for employees as there are many different ways the word can be interpreted and achieved.  To some people it could mean improving service, to others it would mean quality, while another department might believe it means new product development.  Not knowing what is required can be confusing to middle managers and employees alike, who tend to just ignore it because they have no specific guidelines on what to do.

Take Enron.  Their vision was: To become the worlds leading energy company—creating innovative and efficient energy solutions for growing economies and a better environment worldwide.  

Their emphasis on innovative and efficient energy solutions was quite generic and broad giving their employees far too much leeway on how that was to be achieved (and we all know that they took that far too literally, creating innovative solutions to artificially prop up their sales figures).

Incidentally their core values of respect, integrity, communication, excellence, are completely laughable now, as they literally acted in the extreme opposite.

Yet, this is actually quite normal.  We live in a world of duality: good v. bad and happy v. sad.  To improve the clarity of communication, you need to consider the opposite behaviour that you don’t want and ensure that it’s not being accidentally communicated.

For example: Organisations will promote the need for teamwork, but will still reward sales people who sell the most, despite sales people working on their own, sabotaging other team member’s work and refusing to attend or share information at sales group meetings.  Being clear on what behaviours you want and don’t want, ensures that you monitor against negative behaviours subconsciously appearing.

But it’s not just mission statements from 15 years ago that were ambiguous and failed to specify how to achieve the right results in the right way for an organisation.

Today, GM’s purpose is “G.M. is a multinational corporation engaged in socially responsible operations, worldwide. It is dedicated to provide products and services of such quality that our customers will receive superior value while our employees and business partners will share in our success and our stockholders will receive a sustained superior return on their investment.”

Considering that GM was recently fined $US900 million for killing 124 people due to a faulty ignition switch that their employees took a long 10 years to unravel (and another six months to tell the public) – socially responsible operations, is obviously a term employees were confused about, as were quality and superior value.

Like many mission statements, both these examples lack tangible information on how employees need to actually achieve the mission, which often means they achieve the exact opposite or they go about it in devious ways.

Getting to your Heart

Another reason most mission statements don’t work is that they miss the heart of the business.  The emotional connection the business has to the world, which is why the organisation makes the world a better place.  If you put this boundary in place, it makes it clear how you expect employees to ethically achieve your goal.

It’s not easy.  It takes work and deep thinking.  It’s not about crafting feel good statements that your future looks bright, in a clinical, highly absorbed way such as Hershey with the egotistical Undisputed Marketplace Leadership” mission statement.  Or Dell with the equally confusing: “To be the most successful computer company in the world at delivering the best customer experience in markets we serve.”  Both these statements are so unclear, that employees could easily believe they could lie and cheat their way to achieve the purpose and they would have done the right thing.

Instead, it’s really about getting down to why your company matters and the work you do. An outside-in perspective, rather than inside-out.

When done well, they enable your employees to truly understand how their work makes a difference to the world.  How their work matters.  It should also help you attract the right people to your organisation, while at the same time improve how the organisation rallies support behind the vision.

Let’s take a look at Patagonia’s mission statement: “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”  It combines both their values that has generated their market success (creating high quality and environmentally friendly products) and how they make the world a better place.  And they also back this up in a tangible way by donating services and time, as well as 1% of their sales to hundreds of grassroots environmental groups around the world.

Patagonia’s mission statement provides a crystal clear purpose that enables any new employees to understand what they need to do – create the best products and make sure they don’t hurt the environment in the process (something that VW employees might need to take note of, given the recent cheating of pollution emissions).  And no employee would be cynical or confused about the intent, as Patagonia backs this up by tangibly supporting environmental groups.

Another great example is Warby Parker.  “Warby Parker was founded with a rebellious spirit and a lofty objective: to offer designer eyewear at a revolutionary price, while leading the way for socially-conscious businesses.”

Again, if you work here you know you need to come up with new ways to keep prices down, but at the same time be socially aware of the community.

By giving more emphasis as to how the company’s mission is to be achieved combined with why the company matters, empowers employees to use their ingenuity and creativity, which also increases ownership.  Warby Parker validates they mean what they say by donating a pair of glasses to Vision Spring, for every eyewear purchase.

Putting it all Together

Employees really do care about their organisation’s purpose and the greater the degree of specification in a mission statement, the more employees will be satisfied with the firm’s mission.  This in turn generates increased commitment towards achieving the mission, as well as improving employee satisfaction.  

According to research by Bart, Bontis and Taggart (2001), when staff are unclear of what the organisation expects from them, employees have low satisfaction with the mission and even the company’s financial performance. It is the specification of the mission’s means (methods to achieve outcomes) which appears to contribute most to financial performance.

Through clearer specification of how the organisation is achieving its goal and how the goal is connected to a world-improving ideal, employees can both feel and understand the rational and emotional benefits.  All together it creates a unity of purpose, that highly desired, yet often elusive, organisational state.

As a further benefit, crafting a clear purpose that contains both the how and why enable executives and senior managers to collectively focus their employees through a shared understanding and acceptance of the mission. It’s much easier to communicate and direct behaviour, as well as guide strategic decision making when everyone is clear on the purpose.

Furthermore, it also works towards creating the right organisational culture through clarifying priorities and reducing conflicting issues within a company, thereby strengthening the sense of unity and being part of an ethical team that’s making a difference to the world.  However, this only occurs when the mission and values are lived and breathed by the organisation.  Without constant repetition and communication, even a great mission statement can corrode trust within an organisation, if it is not fully embodied by the board and leaders.

The world has moved on from egocentric, domineering mission statements that ruled in the 1980’s.  It’s now time for organisations to get really clear on how they make a difference to the world, rather than boast about their greatness and superiority.

Of course, your mission statement has to also line up with your vision statement and core values, for it to really focus the organisation on the future vision.  Then, you have to execute by putting the right measurements in place.  In the next article, we’ll explore how to create meaningful vision statements.


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