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Developing a Mission Statement

A company mission statement can be a powerful force to clearly define your company's purpose for existence. In the beginning, your company was formed to accomplish something that did not exist in the marketplace, or to do a better job than existing companies. What was that special purpose? Small companies seldom take the time to discuss or write out their company mission, but they should. It will pay measurable financial dividends over time.

The commitment to formulating a company mission can be critical to your company's success. It helps keep management focused on preserving or strengthening the company's unique competitive niche. It can also prevent panic and unwise marketing or spending responses to meet an indirect thrust by competitors into your market.

The most successful company missions are measurable, definable, and actionable project statements with emotional appeal that everyone knows and can act upon. For example, a mission to "be the best health-care provider in the world" for a multi-national HMO organization sounds good. But a simple mission statement from Honda — "beat GM!" — is better because it's a project statement that can be measured every day by every employee. Mission statements can also affect company strategies and tactics. If Honda Motors were to change its mission to "Beat Toyota," different strategies would be called for, along with different geographic tactics in sales, advertising, and distribution of cars.

How important is it to define your company's mission? Consider a famous U.S. refrigerator manufacturer whose sales were growing only at the rate of new home-building during the 1950s. They undertook a years-long project to define whether they were in the business of building refrigerators to preserve food or in the business of food preservation. They decided they were in the business of food preservation, which got them eventually into new product and business areas such as artificial atmospheres (e.g., nitrogen for fresh fruit preservation, freeze-drying technologies) and increased their sales from hundreds of millions of dollars to several billion dollars by the 1980s.

Creating a workable company mission. A "call to action" mission statement provides key attributes that are often missing in other company mission statements:

  • it elicits an emotional, motivational response in company employees
  • it is easily understood and can be transferred into individual action every day
  • it is a measurable, tangible goal
  • it is firmly rooted in the competitive environment in which the company operates

A company's mission statement is also influenced by:

  • company history and traditions
  • management preferences
  • distinctive competencies of the company
  • company resources
  • competitive strengths and weaknesses

Mission statements can be difficult to write. Companies spend months and years attempting to clearly define the best mission statement for current circumstances. Companies that have a clear "vision," and management that can articulate it and communicate it to all employees, have the basis for a call-to-action mission statement.

A good mission statement provides vision and direction for the company for at least 10 to 20 years and should not have to be revised every few years with changes in the company's environment. But the company mission statement must be revised if it is no longer appropriate or has lost significance or relevance.

For an example of the value a mission statement can provide, see our case study on mission statements.