By Ken Gavranovic and Lee Atchison excerpted from their book BUSINESS BREAKTHROUGH 3.0
Sam Goldwyn reportedly said that a verbal contract isn’t worth the paper it’s written on. But what about your company’s mission statement? How can you be sure that it has real worth for the organisation? Here is the clarity you need.
Critical to your company achieving success is your mission statement. Some companies don’t have mission statements. Other companies have taken the time to craft one, but it’s in a drawer somewhere, filed away after having been drafted during a management off-site three years ago. Some plaster it all over the walls of their office, where it’s usually ignored by the longer-term employees, who know it’s not how the company actually operates. Some companies have many mission statements. If one is good, then three is better, right? But a mission statement should not be just words on a piece of paper posted on the bulletin board. Done correctly, a mission statement should be a succinct, eloquent description of the soul and purpose of your company as a whole – not just what it does, but why it exists in the first place.
Mission statements give clarity
A good mission statement gives you clarity – clarity of purpose and clarity of goals. It answers two questions:
- What is the purpose of the company?
- Why does the company exist?
The mission statement does not describe how the company accomplishes its goals.
The mission statement is aspirational and designed never to be fully realised. In this way, it gives everyone in the organisation a shared goal to strive for, and codifies why the organisation does the work it does, its reason for existence. It serves to communicate purpose and direction not just to business leaders, but also to employees, customers, vendors, and all other stakeholders.
Mission statements align expectations between upper management and the people who make up the heart and soul of your company. They set the direction for the company and offer overarching guidance – especially over time as a company grows or its leaders change. A mission statement doesn’t dictate decisions, but it helps inform what decisions should be made and how to make them.
Great mission statements should rally your team, focus your company, and be frequently repeated in meetings and employee communications.
Here are some examples of mission statements from real companies that we think are powerful and effective.
- PayPal: “To build the web’s most convenient, secure, cost-effective payment solution”.
- Google: “To organise the world’s information and make it universally accessible and useful”.
- Apple: “To bring the best user experience to customers through innovative hardware, software, and services”.
- Southwest Airlines: “Dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit”.
Vision statements articulate the future
Once you’ve crafted your mission statement, your work isn’t done. Now it’s time to come up with your vision statement.
The vision statement is a supplement to the mission statement. It articulates a vision of where you want your company to be in the future. The vision statement gives a clear, specific, and compelling picture of what the organisation will look like one, two, or even five years down the road. It often includes a few key metrics that define future success for the company.
The vision statement defines key results that the company has not yet accomplished but must achieve in order to be considered successful. This includes the expected impact on clients and specific behaviours that the organisation must display to be successful.
The vision statement answers these types of questions:
- What problem are we trying to solve?
- Where are we headed?
- If we achieved all our goals, what would we look like 10 years from now?
A vision statement looks forward into the future to create – again, for everyone in the organisation – a mental image of the ideal state that the organisation wishes to achieve. It is both inspirational and aspirational, and should be designed to challenge employees.
The vision statement defines the problems the organisation needs or wants to solve and the direction the company should be headed. When the company eventually achieves all of its strategic goals, the vision statement should define what the company will look like at that point in the future.
Just like the mission statement, the vision statement should be short, precise, and clear. It should be recited often, especially in team meetings to help drive any new business initiatives toward the vision rather than away from it.
If the mission statement of Southwest Airlines, as seen in our example above, is “Dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit”, then look at how the company’s official vision statement focuses instead on its ideal future vision of itself: “To be the world’s most loved, most efficient, and most profitable airline”.
Values statements describe what’s permissible
Once you’ve determined your company mission and company vision, and codified them in official mission and vision statements, there’s one final piece of the puzzle that you must set down on paper: your company values statement.
For any company to accomplish its mission today and achieve its vision tomorrow, it will have to do business, which means it will have to make decisions, take actions, and conduct ongoing business operations. But what decisions, actions, and operations should be permissible? More importantly, which should not be permissible? The boundaries within which an organisation will allow itself to operate in pursuit of its goals define that organisation’s values, the core principles that guide and direct the organisation as it does business. Setting down your company values in print helps to create a kind of “moral compass” for the organisation, its leaders, and its employees.
There are two types of values that are important to an organisation:
Core values
Core values are those values upon which the organisation will never, ever compromise. When put into a situation that might compromise a core value, the organisation instead will pay a price to avoid compromising that core value. The organisation would allow itself to fail completely rather than compromise on a core value. “The organisation will never manufacture the product overseas” is an example of a core value.
Aspirational values
Aspirational values are those values which the organisation believes are important and even critical, but may not always be possible to meet in the course of doing business. The company aspires to hold true to these values, but occasionally may fall short. “The organisation wants to be eco-friendly when building its products” is an example of an aspirational value.
To be meaningful, all values – core or aspirational – must be described using clearly defined behavioural terms. The values must be written unambiguously and clearly communicated to the entire organisation.
In a values-led organisation, the values statement creates a set of guidelines that specifies the direction the organisation will follow, and the direction in which it expects all employees to take the organisation. A values statement guides the organisation and governs its culture. It guides all decision-making and establishes a standard against which actions that the organisation takes can be assessed.
The core values are an internalised framework that is shared and acted on by leadership. The aspirational values work with the company vision to describe what the organisation desires and guide the decisions needed to get there.
A values statement should address the values that are unique to your organisation. They should guide the operations of the company, and they should provide a framework for conduct that you also expect from employees, partners, and vendors.
In our years of working with different companies, we have often seen scenarios in which the values statement of a company was well defined, and yet the company was seen rewarding those who achieved business goals that seemed to go against its stated values. Your company decides your values, but it is critical that you promote and celebrate people who live your values. If you celebrate people who violate your values, you impact belief in your mission, your vision, and your values – and the soul of your company suffers.
Putting mission, vision, and values to work
Your company mission, vision, and values work together to define how your company interacts with the world at large. They describe the process and system you need to live by as you work in the company, and they drive the decisions and the decision-making processes the company uses.
Mission, vision, and values work together to assist in company decision-making. These three directives work together to assist your company in making scalable decisions throughout the organisation.
- The mission statement supports the vision and serves to communicate purpose and direction to employees, customers, vendors.
- The vision statement tells us what our organisation will look like if we accomplish all our goals and hold true to our values.
- The values statement creates a moral compass that guides the decision-making in support of the mission and the vision.
Taken together, they are statements from upper management that provide a template for lower management and individual contributors to follow during their everyday work in order to make sure that the company moves in a direction consistent with leadership. They are tools to align the corporation behind a specific strategic viewpoint.
But there is one thing worse than not having a mission, vision, and value statement, and that is having a mission, vision, and value statement that is completely ignored. In our consulting work, we have run into many companies that have a mission, vision, and value statement that is rarely mentioned – or that causes snickers when it is – because it is so different from what the company truly is. When we help companies create mission, vision, and value statements, we develop them to represent the true soul of the company. In some cases, the results are far from where a company wants to be, yet represent what the company actually values.
The danger of the unaligned employee
The biggest challenge facing the company without a mission, vision, or value statements is a loss of employee engagement. Why do employees become unengaged? Because they don’t feel aligned with the direction of the company. An unaligned employee is an unengaged employee. Without the structure and guidance provided by these statements, the individual employee often does not know if the decisions they are facing align with the direction of the company.
When an employee faces an important strategic decision, and they aren’t prepared with organisational clarity, they can’t make an effective decision consistent with the desires of the company. The tendency to not make a decision at all, and even cover up the fact that the decision wasn’t made, are natural and strong tendencies. The employee feels like they are a cog in the wheel, so that while it’s important for them to follow their current script, they are unempowered to improve things or make difficult decisions.
We cannot emphasise enough that, in order to succeed, your company needs to develop mission, vision, and value statements. Those statements must be the right ones for your company and they must be taken seriously, not thrown in a drawer and long forgotten – or you will pay the consequences.
About the Authors
Ken Gavranovic, co-author of BUSINESS BREAKTHROUGH 3.0, is COO of Blameless and a board member and private equity advisor to several companies. While still in his twenties, Ken started Interland, now web.com, growing the company to $200m and leading its IPO. Since then, he has been responsible for hyper-growth at unicorn businesses, gaining experience across multiple industry verticals and leadership positions. At New Relic, he helped grow revenues to $500m. At Cox Automotive, he oversaw a $5bn+ portfolio of brands, including AutoTrader and Kelly Blue Book. Recently he has been responsible for several IPOs and private equity exits that generated up to 90 times ROI. These experiences have equipped him to guide businesses to scale in growth, transformation, and results. Learn more at www.kengavranovic.com.
Lee Atchison, co-author of BUSINESS BREAKTHROUGH 3.0, is a software architect, author, speaker, and recognised thought leader on cloud computing and application modernisation. At Amazon, he built the company’s AWS Elastic Beanstalk as well as its first software download store and led its retail website’s early migration to a service-based architecture. At New Relic, he helped grow the company’s product architecture from early start-up stage to large enterprise SaaS. Often quoted in technology publications, Lee hosts the Modern Digital Business podcast, and is the founder of Atchison Academy, a series of online courses that helps leaders manage modern digital businesses and their applications. Learn more at www.leeatchison.com.
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