COMPONENTS OF AN EFFECTIVE MISSION STATEMENT

Mission statement is a description of what an organization actually does – what its business is – and why
it does it. Often called the “credo”, “philosophy”, “core values” or “our aspirations”, organization’s
mission is the statement that defines its core purpose or reason for being. It tells who a company is and
what it does. According to P. Drucker, often called the father of modern management, a mission is the
primary guidance in creating plans, strategies or making daily decisions. It is an important
communication tool that conveys information about organization’s products, services, targeted
customers, geographic markets, philosophies, values and plans for future growth to all of its
stakeholders. In other words, every major reason why company exists must be reflected in its mission,
so any employee, supplier, customer or community would understand the driving force behind
organization’s operations.

Mission statements can and do vary in length, content, format and specificity. Most practitioners and
academicians of strategic management consider an effectively written mission statement to exhibit nine
characteristics or mission statement components. Since a mission statement is often the most visible
and public part of the strategic management process, it is important that it include most, if not all, of
these essential components. Components and corresponding questions that a mission statement should
answer are given here.

1. Customers: Who are the enterprise's customers?

2. Products or services: What are the firm's major products or services?

3. Markets: Where does the firm compete?

4. Technology: What is the firm's basic technology?

5. Concern for survival, growth, and profitability: What is the firm's commitment towards economic
objectives?

6. Philosophy: What are the basic beliefs, core values, aspirations and philosophical priorities of the
firm?

7. Self-concept: What are the firm's major strengths and competitive advantages?

8. Concern for public image: What is the firm's public image?

9. Concern for employees: What is the firm's attitude/orientation towards employees?

While writing the mission statement it is preferable write it from the customer’s perspective. For
example look at the 9 components written from customer’s perspective for an operator of for hire
hobby fishing vessels.

1. Customers—Who are the firm’s customers? Example: Our customers are outdoor enthusiasts seeking
fishing excitement and adventure.

2. Products or services—What are the firm’s major products or services? Example: We provide fast,
clean boats, all the bait and tackle needed, and friendly first mates to create memories for a lifetime.
3. Markets—Geographically, where does the firm compete? Example: Our fleet of fast, clean vessels
operate all along the Florida Gulf Coast.

4. Technology—Is the firm technologically current? Example: Our vessels are equipped with the very
latest safety and fish finding equipment to insure that customers comfortably are “catching rather than
just fishing.”

5. Concern for survival, growth, and profitability—Is the firm committed to growth and financial
soundness? Excellent: Our prices are as low as possible to provide customers great value in conjunction
with high employee morale and a reasonable return for our owners.

6. Philosophy—What are the basic beliefs, values, aspirations, and ethical priorities of the firm?
Example: We assure customers the upmost courtesy and care as our motto on every vessel is to follow
the Golden Rule.

7. Self-concept—What is the firm’s distinctive competence or major competitive advantage? Example:

For customer enjoyment and safety, we provide the most experienced staff in the industry.

8. Concern for public image—Is the firm responsive to social, community, and environmental concerns?
Excellent: Our vessels use emission-friendly engines; we strive to bring repeat tourists to all
communities where we operate.

9. Concern for employees—Are employees a valuable asset of the firm? Example: Our on the-water and
off-the-water employees are “on a mission” to help customers have a great time

Types: There are two basic types of mission statements commonly seen and yet others may be a
combination of the two

 Customer-oriented missions. Customer-oriented missions define organization’s purpose in terms

of meeting customer needs or providing solutions for them. They provide more flexibility than
product-oriented missions and can be easily adapted to changing environment. For example,
Nokia’s statement “connecting people” is customer-oriented. It does not focus on mobile
phones or smartphones only. It provides a solution to customer needs and could easily have
worked 50 years ago, and will continue to work in the future. It also gives more strategic
flexibility for the company. In Nokia’s case, it may start providing VoIP software to allow calls to
be made over the internet and its mission would still be valid.
 Product-oriented missions. Product-oriented missions focus on what products or services to
serve rather than what solutions to provide for customers. These statements provide less
flexibility for the company because most products have short life cycle and offer limited market
expansion. The company that defines its business as “providing best health insurance products”
may struggle to grow to other insurance product categories.

9 Characteristics of an Effective Mission Statement

Mission statements are not one-size-fits-all, although there are some guidelines that can help you craft
one that effectively captures the purpose and goal of your business. The general rule for these
statements is that you can’t confuse your audience, because that defeats the purpose of trying to
communicate the reasons your business exists. However, there are nine characteristics common in
effective mission statements that provide the parameters under which you can craft a statement that
not only sells the “what” of your company but also the “why.”

They Are Short

The U.S. Navy adopted an adage in the early 1960s that said, “Keep it simple, stupid,” also known by the
acronym KISS. The idea behind that adage is that systems work better when designers keep things
simple, and the same applies to your mission statement. Shorter is better because you want to convey
the purpose and goal of your business in a way that is simple, clear, and easy to understand. The more
words you use, the more likely it is that you’ll send out a garbled message to your audience.

They Are Unique to Your Business

Mission statements should never be generalized in such a way that any other company could steal what
you wrote and use it as their own. When crafting these statements it’s vital to remember what makes
your company different, unique, and special.

They Create Expectations

A good mission statement embraces the expectations of a target audience for something they truly
crave. For example, Zappos’ mission statement is “To provide the best customer service possible.” That
creates the expectation in Zappos’ customers that they will deliver superior customer service each and
every time.

They Are Realistic

Some companies fall into the trap of crafting mission statements that are so grandiose and philosophical
that they lose all touch with reality. Mission statements must be grounded in what your company
provides customers in the present. Save the inspirational and future-based language for your vision
statement.

They Are Memorable

What are the key phrases and terminology you can use in your mission statement to make it
memorable? That doesn’t mean that readers must be able to recite your mission statement in whole as
if it’s a catchphrase, but it does mean that people should be able to associate key aspects of that
statement with your company.

They Are Active

The word “active” in this context refers to active verbs that make readers feel as if something is
happening now rather than in the past. For example, instead of writing, “These products are made by
our company to improve your life,” you should write, “Our company makes these products to enhance
your quality of life.” Notice how the transition from passive to active verbs, and substituting “enhance
your quality of life” for “improve your life” conveys a stronger message?

They Are Positive

It’s important that you avoid negative messages because mission statements are all about how your
business solves a problem, fulfills a want or need, or makes life easier for your target audience.

They Are Adaptable

A strong mission statement is something that your marketing and product development teams can also
use for motivation and direction. For example, eyeglass brand Warby Parker’s mission statement is,
"Warby Parker was founded with a rebellious spirit and a lofty objective: to offer designer eyewear at a
revolutionary price, while leading the way for socially conscious businesses." The concepts of “rebellious
spirit,” “revolutionary price,” and “socially conscious businesses” are all a marketing department’s
dream because they are sellable concepts.

They Are Targeted

It’s important to remember that mission statements are expressed to your target audience, so the
message must match the wants and needs of that audience. Going back to the Zappos example, the
company knew that customer service was a huge deal among women who shopped for shoes, so it
tailored its statement to match the desires of that audience.

Why creating a mission is important?

Many studies have been conducted to find out if having and communicating mission statement helps an
organization to achieve higher performance. The results were mixed. Some studies found positive
relationship between written statements and higher organizational performance, while other studies
found none or even negative relationship. One of the reasons might be that most of the companies
create mission statement only because it’s fashionable to do so and little effort is made to actually
communicate that mission to its stakeholders. David argues that if an organization constantly revises its
mission and treats it as a living document, it achieves higher performance than its competitors.
Nonetheless, all of the authors agree that mission brings the following benefits

 Informs organization’s stakeholders about its plans and goals;

 Unifies employees’ efforts in pursuing company goals;
 Serves as an effective public relations tool;
 Provides basis for allocating resources;
 Guides strategic or daily decision making;
 Shows that a company is proactive.

Writing a mission

Creating a mission statement is an important first step in clearly identifying your business’ reason for
being. It’s hard to do it right. Therefore, we identified these steps and guidelines to help you write an
effective statement.

Step 1. Gather a team of managers, employees and shareholders. Mission is the statement that must be
understood by employees of all levels. Involving more people will let you find out how each of them
sees an organization and its core purpose. In addition, employees will support organization’s mission
more if they will be involved in the process of creating it.
Step 2. Answer all 9 questions for effective mission. Many practitioners and academics agree that a
comprehensive statement must include all 9 components. Only then creating a mission can benefit a
company. At this stage, try to honestly answer all the questions and identify your customers, markets,
values etc. It may take a lot of time but it’s worth it.

Step 3. Find the best combination. Collect the answers from everyone and try to combine one mission
statement out of them. During this step, you can make sure that everyone understands company’s
reason for being and there are no conflicting views left.

Following guidelines (all taken from various studies) should also be helpful in writing an effective mission
statement:

 ‘Public image’, ‘concern for employees’, ‘philosophy’ and ‘customers’ are the most important
components of a mission;
 ‘Citizenship’, ‘teamwork’, ‘excellence’ and ‘integrity’ are the values used most often by the
companies with effective missions;
 Influential statements include words such as: ‘communities’, ‘customers’, ‘employees’, ‘ethics’,
‘global’ and ‘quality/value’;[4]
 Statement should be customer-oriented;
 Use less than 250 words;
 Be inspiring and enduring.

Mission statement examples

FedEx mission

"FedEx Corporation will produce superior financial returns for its shareowners (5) by providing high
value-added (7) logistics, transportation and related information services (2) through focused operating
companies. Customer (1) requirements will be met in the highest quality manner appropriate to each
market segment served (3). FedEx Corporation will strive to develop mutually rewarding relationships
with its employees (9), partners and suppliers. Safety will be the first consideration in all operations (9).
Corporate activities will be conducted to the highest ethical and professional standards (6)"

FedEx mission lacks the answers about technologies (4) and social responsibilities (8), which is one of the
key characteristics that have to be in successful statement. It also lacks all the values pointed out in the
guidelines that are used by successful companies in their statements. It is also product-oriented.

Intel mission

"Delight our customers (1), employees (9), and shareholders (5) by relentlessly delivering the platform
and technology (2,4) advancements that become essential to the way we work and live."

Intel’s mission is poor because it lacks 4 components: markets (3), philosophy (6), self-concept (7) and
public image (8). It is customer-oriented but does not use any of the top 4 values and is too short.

Toyota mission

Toyota will lead the way to the future of mobility, enriching lives around the world (3) with the safest
and most responsible (6) ways of moving people (1). Through our commitment to quality, constant
innovation (4,7) and respect for the planet (8), we aim to exceed expectations and be rewarded with a
smile. We will meet challenging goals (5) by engaging the talent and passion of people (9), who believe
there is always a better way (6)

Toyota has only missed to mention its products. Their mission is customer-oriented, inspiring and
enduring but it doesn’t clearly mention its customers or social responsibilities.

Fleetwood Enterprises

Fleetwood Enterprises will lead the recreational vehicle and manufactured housing industries (2) in
providing quality products, with a passion for customer driven innovation (7). We will emphasize
training, embrace diversity and provide growth opportunities for our associates and our dealers (9). We
will lead our industries in the application of appropriate technologies (4). We will operate at the highest
levels of ethics and compliance with a focus on exemplary corporate governance (6). We will deliver
value to our shareholders, positive operating results and industry-leading earnings (5). (Author
comment: Statement lacks three components: Customers (1), Markets (3) and Concern for Public Image
(8); 80 words)

PepsiCo

We aspire to make PepsiCo the world’s (3) premier consumer products Company, focused on
convenient foods and beverages (2). We seek to produce healthy financial rewards for investors (5) as
we provide opportunities for growth and enrichment to our employees, (9) our business partners and
the communities (8) in which we operate. And in everything we do, we strive to act with honesty,
openness, fairness and integrity (6). (Author comment: Statement lacks three components: Customers
(1), Technology (4), and Self-Concept (7); 62 words)

Royal Caribbean

We are loyal to Royal Caribbean and Celebrity and strive for continuous improvement in everything we
do. We always provide service with a friendly greeting and a smile (7). We anticipate the needs of our
customers and make all efforts to exceed our customers’ expectations. We take ownership of any
problem that is brought to our attention. We engage in conduct that enhances our corporate reputation
and employee morale (9). We are committed to act in the highest ethical manner and respect the rights
and dignity of others. (6). (Author comment: Statement lacks six components: Customers (1)
Products/Services (2), Markets (3), Technology (4), Concern for Survival/Growth/Profits (5), Concern for
Public Image (8); 86 words)

Dell, Inc.

Dell’s mission is to be the most successful computer company (2) in the world (3) at delivering the best
customer experience in markets we serve. In doing so, Dell will meet customer expectations of highest
quality; leading technology (4); competitive pricing; individual and company accountability (6); best-in-
class service and support (7); flexible customization capability (7); superior corporate citizenship (8);
financial stability (5). (Author comment: Statement lacks two components: Customers (1), Concern for
Employees (9); 56 words)

(Compiled from various sources)