A mission statement is standard for a company, but ask any employee what it really means and they probably won’t be able to tell you. Are your staff aware of your company’s mission? Does it drive what they do and how they work? Can your company call itself ‘mission-driven’ in word and deed? We dug deeper and asked some experts.
What is a Mission Statement?
A clear, actionable mission statement describes what a company does, motivates employees, inspires customers, and improves the bottom line. It helps customers understand what the company’s priorities are. Within the organization, a mission statement guides management in defining strategies and making decisions, particularly when they involve making changes.
Kei Tomioka, a co-founder and director of cloud-based contact-management system Sansan, says, “Actual implementation of changes [at Sansan] involves all employees, is discussed for around a year, and is only then finalized by management. It’s the most important element of the company, so we use time, our most valuable resource, to work on it. That’s why we’re called a mission-driven company.”
Often, terms such as mission, vision, and values have separate meanings depending on the school of thought. These can vary across companies. Sansan incorporates them, while some others separate them. They all provide a foundation for being mission-driven.
Mission and Success
Some of the world’s most successful companies swear by being mission-driven. Microsoft’s mission statement is “to empower every person and every organization on the planet to achieve more.” PayPal focuses on the product when it states its mission is “to build the web’s most convenient, secure, cost-effective payment solution.”
The power of mission also comes through in business research. Mission drives clarity of purpose. A global survey found 60% of companies that aligned their purpose with organizational strategies reported 10–30% revenue growth over a three-year period. However, almost a quarter of companies that did not use their purpose to inform their strategies reported declining revenues. Titled Winning with Purpose, this survey of 474 global business executives examined the extent to which their organizations proactively utilize their purpose, and the effects of this purpose on the executives’ ability to grow, innovate, and transform.
Here are some more areas where being mission-driven is useful for a company.
Mission and Talent
Acquiring and engaging talent
One of the key benefits of having a well-defined mission is that it helps to attract employees with similar values and goals. With everyone on the same page, an organization can run more efficiently and smoothly. Employees with shared values are likely to be more engaged too. Their emotional connection to the company’s mission translates to greater passion for their daily work. A Gallup poll found this leads to improved customer engagement, increased productivity, better retention, and 21% higher profitability.
Google is a legendary leader of the employee engagement space. Its highly engaged staff are 40% more productive compared to the industry average and, unsurprisingly, this means higher profit margins for the company. In Google’s case, that yields astronomical figures.
As reported by Deloitte’s latest Millennial Survey, young workers are more likely to leave if their priorities differ from their employer’s motivations. Employee turnover lowers productivity and disrupts customer service while companies look for a replacement. Training new employees and bringing them up to speed also means an additional cost to the company.
Mission and Customers
Mission-driven companies are known to be effective in building customer relationships. As seen in the Winning with Purpose survey, mission leads to a well-defined purpose, and 80% of executives interviewed agreed that purpose boosts customer loyalty. Put simply by leadership expert Simon Sinek, people don’t buy ‘what’ you do, but ‘why’ you do it.
Mission and Branding
By embedding mission into every aspect of the business, mission-driven companies are also able to communicate a stronger brand and differentiate themselves from their competition.
Sansan applies a unique twist in what it calls its katachi, a Japanese word that roughly translates as ‘structure’ or ‘form’. The katachi contains a ‘mission’ section and essentially is the company’s mission, but in a long format that encompasses its reason for existence and overarching aims.
Tomioka explains the connection between mission and branding: “Our company members look to the katachi, which encompasses Sansan’s mission, values, and operating guidelines, as central to how they think and act in their daily work. I believe this comes across to the companies and people we encounter, leading to strong branding and perception of quality.”
Mission and Strategies
A further advantage of being mission-driven is the clear direction it provides for the company’s business strategies. When the two are aligned, the company is more likely to experience success.
Chinese technology giant Tencent’s mission statement is “to improve quality of life through internet value-added services.” Consistent with this, Tencent resisted the use of online advertising on its social network platforms as a major source of revenue. Instead, it focused on developing value-added services that enhanced user experience and which users would want to buy, such as mobile gaming and payment services apps. Tencent’s approach paid off, and it is now one of the most valuable listed companies in the world.
Compare this with the lesson Toyota learned when it prioritized a growth strategy ahead of its customer-focused mission. Although it was the biggest car seller in 2007, the misalignment between its strategy and mission led to overexpansion and concerns around the quality of its cars. Subsequently, between 2009 and 2011, Toyota suffered considerable monetary and reputational damage due to major vehicle recalls.
Mission and Trust
Mission-driven companies with a socially relevant purpose gain the trust of their stakeholders. Trust is important because companies high in trust significantly outperform others in profitability.
With half of South Korea’s population as its customers and the honor of being Asia’s Best Large Workplace, Shinhan Bank is undoubtedly a highly trusted company. It earns trust by committing to its mission of creating “a better world through finance.” For example, Shinhan is currently working to improve access to car loans in Japan by reducing lending risk with IoT technology. Successful outcomes will boost employment and business prospects.
Mission and Your Company
You can consult both internal and external stakeholders to gauge whether your mission is having the desired impact and is well understood. For example, try asking employees why their work is important. You can also check whether customers are aware of your purpose either through regular surveys or as part of your company’s processes of getting to know your customers. Finally, ask colleagues if they are aware of recent examples that demonstrate the company’s mission in action.
If they can’t answer clearly or the responses are all over the place, it’s time to revisit your company’s mission. In fact, it’s always time, because the mission permeates everything a company does. Be truly mission-driven and watch the results pile up.