What is a company’s mission statement and how do you determine it? Part 2

Posted by

A week ago I described what questions a company’s vision statement should answer, and then what a company’s mission statement is – it should contain statements that condition a company’s credibility, at least in theory to be verified by customers or the environment. Today, I will show you 3 principles to follow if you want to formulate a mission statement that you can understand yourself and that will help you in the months or years to come in business.

First, the mission statement must reflect your growth dreams. You can’t think about what is now, but look to the future and think about what kind of company you would like to run (not have, but run!) in the future. A company’s mission is like a person’s mission. When you know where you are going, what your dreams are, what you want, it is much easier to achieve it. Then all the thoughts, actions, acquaintances made, so-called coincidences converge at one point – at the end of the road you want to travel until your dream comes true.

That’s why a company’s mission is like a person’s life mission – when you set it consciously and correctly, it’s easier to achieve customer satisfaction, plan sales, design new product, hire employees. The company’s mission must include the direction of development that the company will try to pursue in its activities, there is also the overall purpose and the main reason for the company’s existence. I believe that, as in the case of goals, in the case of missions also the proverb applies – if you don’t know where you are going, you will get somewhere else.

Check out this short lecture on how to formulate a vision and mission not only in business, but in your own life:

A mission statement is a precise statement of the far-sighted intentions and aspirations of the company’s founders. It should be formulated in simple terms so that new employees can quickly understand and remember it. When in 1961 J. F. Kennedy formulated the mission of his presidency for the next 10 years with the words: “By the end of the decade, an American will have set his foot on the moon,” everyone was amazed at the magnitude of the president’s intentions. The Japanese company Komatsu, which more than 50 years ago set one timeless goal: “To beat Catepillar,” the company’s competitor in the construction machinery market, similarly looked to the future.

Second, a well-formulated company mission statement should specify exactly who will buy our products and with whom we will compete in the market. It is also worth specifying in it what we stand for and who we are targeting with our product or services.

To summarize the second principle in setting a mission, a well-constructed mission statement answers the questions of what we want to achieve and what needs will be met. Nokia’s mission statement – Connecting people – was recognized around the world during the company’s heyday at the turn of the century, and just 30 years earlier the company was making paper and wellingtons. It was only the courage and dreams of the company’s managers that led it to be at the forefront of electronics concerns today.

Third, a principle that I have described before, but will repeat again, is the principle of credibility. It must be consistent with what the company can give to customers. Complicated phrases about high quality products and great customer service will be of no use if employees cannot live up to such a premise. The credibility of the mission statement of companies like Toyota Motor Company – “That car in front is Toyota” or Microsoft – “We will play a leading role in computer software” both employees and customers can check on a daily basis.

I don’t know if you know that sometimes a company’s mission statement can be in simple, succinct form. An example would be the phrase “Absolutely, certainly, within 24 hours” of the airline company “Federal Express”. However, this is not the rule, as the ABB conglomerate has developed a 32-page mission statement that includes detailed assumptions from many areas of the company’s business.

When defining the company’s mission statement, use frequently used words that mean:

  • values, such as inspiring trust, innovation, hard work, professionalism, ability to take risks, honesty, loyalty,
  • experience, i.e. the owners’ past reputation, overseas operations, traditions in doing business in the industry,
  • goals, i.e. striving for excellence, helping others, competitiveness or rapid growth.