The Value of a Mission Statement

by Tyler Raymie

Do mission statements have value for small businesses? While some may not like the idea of a “mission statement,” per se, being able to communicate your business’s purpose, range, value, and distinctiveness in a short paragraph, even a few sentences, can be extremely beneficial. Think of it as your high, high, HIGH level business strategy, and off of which everything else in your business can be built. With that in mind, let’s look at the audience and various purposes of a mission statement.

Who is your mission statement for? Most customers are unaware that it even exists. Think about the last time you went into Wal-Mart and thought “my, they are really fulfilling their mission statement today.” It probably never happened. There are three main audiences for your mission statement. The first is yourself. Not only do you create it, but you are most affected by it, as it defines the primary goal of your business. The second audience are your lenders and investors. Most mission statements are too vague to have a strong impact on these groups. However, a good mission statement can provide a strong opening to a business plan, which may be useful in obtaining capital. The third and most important audience is your employees. These are the people who will have direct contact with your customers (in most cases), and so need to feel as strongly about your business as you.

So, with audience in mind, let’s look at the purpose of a mission statement. In a 2013 article for Forbes, Patrick Hull writes that a mission statement “provide[s] you and your employees with the framework and purpose [of your business].” Consider Ferrari’s mission statement: “To make unique sports cars that represent the finest in Italian design and craftsmanship, both on the track and on the road.” Everything Ferrari makes and sells falls within this framework, down to the details. They build fast, sleek vehicles for affluent customers. Your mission statement should sum up your business’s goal without putting it in too narrow of a box.

It can also help differentiate you from competitors. In a 2014 article for Entrepreneur, Tim Berry asks; “Look at your company’s mission statement, if you have one: Would your customers know that’s yours and not your competitors?” He is making the point that your mission statement should communicate what makes your business unique. If your competitor could use the same statement as you, it is too vague.

One more important purpose of a mission is to motivate your employees. Teresa Amabile and Steve Kramer wrote about the importance of giving your employees meaning in 2012 for the Harvard Business Review. They talk about the importance of amplifying meaning to employees, in order to engage employees more consistently and intensely. “To accomplish this…[employers] must communicate to employees how their work contributes to these sources of meaning,” they write. “Often, a well-articulated mission statement is the place to start.” A well-thought out mission statement can inspire your employees to achieve. But words alone don’t do the trick. As Amabile and Kramer write, “far too often, mission statements turn out to be empty lip service to values that aren’t lived every day by managers inside the organization. So this is the leader’s second task: walking the talk of the mission statement.” Unless you as the owner act like the mission statement means something, it will be utterly lost on your employees.

Maybe you don’t like the idea of a written mission statement. While there are more important things for small businesses to worry about, one cannot deny the value of a basic, central goal that defines the company and communicates your value. Being able to communicate every facet of your business in a short statement will keep you focused in day to day operations, and encourage your employees to do the same.

 

 

Special thanks to: Susan Pitts, Bryan Ziegler, Todd Rausch, Amy Dutton, Joel Youngs, Tricia Janes