Business Vision and Company Mission Statement
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QuickMBA / Strategy / Vision & Mission Statement
The Business Vision and
Company Mission Statement
While a business must continually adapt to its competitive environment, there are
certain core ideals that remain relatively steady and provide guidance in the process
of strategic decision-making. These unchanging ideals form the business vision
and are expressed in the company mission statement.
In their 1996 article entitled Building Your Company's Vision, James Collins and
Jerry Porras provided a framework for understanding business vision and
articulating it in a mission statement.
The mission statement communicates the firm's core ideology and visionary goals,
generally consisting of the following three components:
1. Core values to which the firm is committed
2. Core purpose of the firm
3. Visionary goals the firm will pursue to fulfill its mission
The firm's core values and purpose constitute its core ideology and remain relatively
constant. They are independent of industry structure and the product life cycle.
The core ideology is not created in a mission statement; rather, the mission
statement is simply an expression of what already exists. The specific phrasing of
the ideology may change with the times, but the underlying ideology remains
constant.
The three components of the business vision can be portrayed as follows:
Core
Values
Core
Purpose
Business
Vision
Visionary
Goals
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Core Values
The core values are a few values (no more than five or so) that are central to the
firm. Core values reflect the deeply held values of the organization and are
independent of the current industry environment and management fads.
One way to determine whether a value is a core value to ask whether it would
continue to be supported if circumstances changed and caused it to be seen as a
liability. If the answer is that it would be kept, then it is core value. Another way to
determine which values are core is to imagine the firm moving into a totally different
industry. The values that would be carried with it into the new industry are the core
values of the firm.
Core values will not change even if the industry in which the company operates
changes. If the industry changes such that the core values are not appreciated, then
the firm should seek new markets where its core values are viewed as an asset.
For example, if innovation is a core value but then 10 years down the road
innovation is no longer valued by the current customers, rather than change its
values the firm should seek new markets where innovation is advantageous.
The following are a few examples of values that some firms has chosen to be in
their core:
excellent customer service
pioneering technology
creativity
integrity
social responsibility
Core Purpose
The core purpose is the reason that the firm exists. This core purpose is expressed
in a carefully formulated mission statement. Like the core values, the core purpose
is relatively unchanging and for many firms endures for decades or even centuries.
This purpose sets the firm apart from other firms in its industry and sets the direction
in which the firm will proceed.
The core purpose is an idealistic reason for being. While firms exist to earn a profit,
the profit motive should not be highlighted in the mission statement since it provides
little direction to the firm's employees. What is more important is how the firm will
earn its profit since the "how" is what defines the firm.
Initial attempts at stating a core purpose often result in too specific of a statement
that focuses on a product or service. To isolate the core purpose, it is useful to ask
"why" in response to first-pass, product-oriented mission statements. For example, if
a market research firm initially states that its purpose is to provide market research
data to its customers, asking "why" leads to the fact that the data is to help
customers better understand their markets. Continuing to ask "why" may lead to the
revelation that the firm's core purpose is to assist its clients in reaching their
objectives by helping them to better understand their markets.
The core purpose and values of the firm are not selected - they are discovered. The
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stated ideology should not be a goal or aspiration but rather, it should portray the
firm as it really is. Any attempt to state a value that is not already held by the firm's
employees is likely to not be taken seriously.
Visionary Goals
The visionary goals are the lofty objectives that the firm's management decides to
pursue. This vision describes some milestone that the firm will reach in the future
and may require a decade or more to achieve. In contrast to the core ideology that
the firm discovers, visionary goals are selected.
These visionary goals are longer term and more challenging than strategic or
tactical goals. There may be only a 50% chance of realizing the vision, but the firm
must believe that it can do so. Collins and Porras describe these lofty objectives as
"Big, Hairy, Audacious Goals." These goals should be challenging enough so that
people nearly gasp when they learn of them and realize the effort that will be
required to reach them.
Most visionary goals fall into one of the following categories:
Target - quantitative or qualitative goals such as a sales target or Ford's goal
to "democratize the automobile."
Common enemy - centered on overtaking a specific firm such as the 1950's
goal of Philip-Morris to displace RJR.
Role model - to become like another firm in a different industry or market. For
example, a cycling accessories firm might strive to become "the Nike of the
cycling industry."
Internal transformation - especially appropriate for very large corporations.
For example, GE set the goal of becoming number one or number two in
every market it serves.
While visionary goals may require significant stretching to achieve, many visionary
companies have succeeded in reaching them. Once such a goal is reached, it
needs to be replaced; otherwise, it is unlikely that the organization will continue to
be successful. For example, Ford succeeded in placing the automobile within the
reach of everyday people, but did not replace this goal with a better one and
General Motors overtook Ford in the 1930's.
Recommended Reading
Jeffrey Abrahams, The Mission Statement Book: 301 Corporate Mission Statements from America's
Top Companies
Features 300 mission statements from companies such as:
American Express
AT&T Corp.
Ben & Jerry's Homemade, Inc.
Blockbuster Inc.
Coca-Cola
Exxon
FedEx Corporation
Ford Motor Company
General Electric Company
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IBM
Johnson & Johnson
Kellogg Company
Levi Strauss & Co.
Microsoft Corporation
Nike
Southwest Airlines Co.
Tootsie Roll Industries, Inc.
United Parcel Service
Washington Mutual Inc.
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