Last week, we discussed the three types of analysis that form the foundation to a company’s strategic direction: environmental analysis, industry analysis, and analysis of the internal environment. Now that we’re through with the grunt work, we must allow ourselves a moment to wax poetic. It’s time, after all, to discuss the virtues, rhetorics, and conceptual complexities of vision and mission statements.
Vision and mission have floated around as some of the prime suspects of corporate buzzword lingo for a good while. As Richard Rumelt, one of the world’s leading strategic thinkers, argues, these terms are all too often mobilized for a kind of “template-style strategic planning,” where the Vision is reduced to a generic “become the best X in the world” and supplemented by a set of politically correct buzzwords to serve as mission statement. There are companies that seem to be widely successful with no vision and mission statement at all. Some have only one – others use both. So, we’re going to be honest with you: vision and mission statements are not essential to success. They can, however, be useful – and research has shown that good vision and mission statements can motivate employees and enhance performance. (Lipton 1996; Bart 1996, 2001.) So let’s take a look at the sense and nonsense behind the buzz.
A vision statement is something like a company’s constitution: it summarizes in an idealistic language a company’s long-term goals and commitments. A good vision must be concrete enough to focus decision-making, idealistic enough to inspire commitment and attract talent, and relatively future-proof; unlike a company’s strategic goals, which will change based on the market situation, a vision is most meaningful when it endures for a longer period.
Lipton (1996) states in his literature review that a well-formulated vision can be helpful to companies in five ways:
Now we must note that Lipton here speaks generically of “vision”, rather than vision statements specifically. Some leaders may excel at communicating their vision verbally, in which case it may still do the trick without ever being written down. This may be one reason why some hugely successful companies lack vision statements: it’s not that they don’t have any vision, but rather that it is expressed in another form, for example in a series of posts on a company blog or through an internal set of commandments. In other cases, a company’s scope may simply not be suitable for the formulation of high-minded vision statements. A group of five college guys building widgets or designing emoji packs for your smartphone will do just fine without.
So while a vision statement isn’t mandatory, Lipton points out that it does have some benefits above and beyond a more informal vision. Firstly, the vision drafting process allows the company to involve various stakeholders (employees, customers, shareholders, and so on) in the vision formation process, reconciling different ideas and interpretations and thereby building a stronger consensus and buy-in. These visions are more effective than visions created by only the upper management during their yearly weekend retreat. As Lipton puts it: “An autocratically derived statement written in isolation and pushed from the top down is doomed for disaster.” (91)
Secondly, a written vision statement signals commitment: it is set in stone. If any employee feels the company’s strategic execution is inconsistent with its goals, a written vision statement can serve as proof of this claim. A written vision also makes it harder for senior management’s to behave in a way contrary to the company’s vision, because it will immediately make the vision look like a mere sloganeering campaign.
Now then, having established the reasons why formulating a vision statement may (or may not) be a good idea, let’s discuss some of the qualities that make for a good vision statement.
The mission statement is commonly confused with a vision, and the two are sometimes used interchangeably. Still, there is a clear difference between them: whereas visions are explicitly about the future, your mission describes your “purpose” in the present. The mission statement should be the answer to the familiar existential question that all people and organizations grapple with at times: why do I exist?
Answering this question (for your company, anyway) serves two primary ends. The first is to influence behavior: a mission statement can be inspiring and instill in employees a particular ethos or “company spirit.” Christopher Bart (1997) calls the mission statement the “libido” of the organization, which serves to inspire passion and personal pleasure in the firm, described in terms of commitment, involvement, and satisfaction.
The second is to provide strategic focus: the mission will serve as a point of gravity for the allocation of resources and the channeling of efforts into selected areas. Bart here gives the still painfully relevant example of Donald Trump “who, without an appropriate set of organizational boundaries, found himself wandering from real estate development to hotels to airlines and eventually to casinos — all in pursuit of something called a ‘deal.’” Fifteen years later, we may add a real estate ‘university,’ a steak brand, a vodka enterprise, a board game, a magazine, and a stranger-than-fiction presidential campaign to that list. We leave it to the reader to distill the lessons that might be drawn from this curious resumé.
Bart asks senior managers about their experiences with mission statements, and the results are quite striking. Without getting bogged down in the details, significant percentages of managers reported they found their company’s mission statements unclear, unsatisfactory, or unfocused. Only 27% were really content with the development process, and most found a lack of commitment to the mission on the workfloor. To cut to the chase: “The overall conclusion is that, in any sample of mission statements, the vast majority are not worth the paper they are written on and should not be taken with any degree of seriousness.”
The question that arises here is, of course, what can you do to avoid falling in with the bad crowd? Bart’s diagnosis covers two aspects:
Thus, to summarize, three rules of thumb for writing mission statements:
In this week’s article we’ve discussed some important guidelines for vision and mission statements. If you’ve followed the roadmap so far, you should have a firm basis of analysis, a vision of the future linked to high-level goals, and a clear purpose for your company. Next time, we’ll delve into goal-setting and KPI’s: these are the essential tools to focus your company’s performance, monitor your progress, and to start developing your strategic initiatives. Please come back to learn more, and as always, leave questions and comments below!