Early in my career, the notion of a business mission seemed silly, farcical, even pointless. I believed that vague notions of ‘changing the world’ were only parroted by recruiters to corral wide-eyed graduates exiting the education mill.
In my defense, I didn’t work at any companies with a good mission statement. Having now run a business, I can unequivocally say that more attention should be paid to defining the right mission.
Missions are the most concise argument for why a company exists. The best missions include:
- What a firm does
- How they do it
- May contain their history and an evaluation of the microeconomic market they find themselves in at the time
- Their overarching goal that will be achieved if the mission is successful which is often aspirational
Provided below are mission statements that can be compared and contrasted. The list includes newcomers and old economic titans. In recent years, the newcomers have become household names. Economic titans, while still looming large, have lost much of their economic heft.
When reading the missions of the new household names, try to break them into two parts. A mission is an essential joining of two components:
- Economic mission
- What a firm does, how they do it, and the statement about their present microeconomic environment.
- Spiritual mission
- The overarching goal achieved if the mission is successful.
Missions of companies that have recently become house hold names:
SpaceX designs, manufactures, and launches the world’s most advanced rockets and spacecraft. The company was founded in 2002 by Elon Musk to revolutionize space transportation, with the ultimate goal of making life multiplanetary.
Tesla’s mission is to accelerate the world’s transition to sustainable energy. Tesla was founded in 2003 by a group of engineers who wanted to prove that people didn’t need to compromise to drive electric – that electric vehicles can be better, quicker and more fun to drive than gasoline cars.
Amazon: Our mission is to continually raise the bar of the customer experience by using the internet and technology to help consumers find, discover and buy anything, and empower businesses and content creators to maximize their success. We aim to be Earth’s most customer centric company.
Missions of well-known titans:
- General Electric (as of 2020): We rise to the challenge of building a world that works.
- Ford
- Henry Ford’s original mission: To democratize the automobile and make it economically affordable for a worker and lighten their burden.
- Ford (current as of 2020): Our mission is to strengthen communities and help make people’s lives better. Our purpose is to drive human progress through freedom of movement.
Did you note any important differences between the new kids on the block and the companies of yesteryear?
Before we discuss the differences let’s first observe some heuristics about missions.
Heuristic 1: Missions can play a motivational role in employees lives
Millennials and younger generations are widely regarded as a group that wants to work at companies changing the world, where they can ‘belong’. In many regards, this generation is more educated than previous generations. Is virtue driving these sentiments?
“Happiness depends upon ourselves.”
Aristotle
This quote is a true observation of human nature. Considered against the mission of a firm, what a person chooses to do with their time, missions are indeed important motivators. But clearly external activity is not the full picture for what motivates man, just part of it.
Heuristic 2: For companies to survive, they need a mission that also provides for the material needs of its employees
Work history trends suggest a sense of belonging in and of itself does not explain higher degrees of job satisfaction. Younger generations want economic mobility just like every generation before them. Money speaks as much as mission values.
The data to support this is found in two points. Most graduates stay on their first job for under a year. Second, the rate at which a college educated graduate increases his or her income is highly correlated to the size of company they work for and the size of the metroplex they move to.
To summarize these heuristics. The social objectives of a company are important to employees but so is getting paid well. Companies need to fulfill both social and economic functions.
The essence of a good mission statement
Do a phone survey of executives working at well-respected fortune 500 firms and ask them to repeat their company’s mission. We have. Crickets will sing on the other end of the phone. Most employees don’t know their mission. Why? Most mission statements aren’t meaningfully defined, they are generalizations without meaning.
The missions of GE and Ford are so dissociated from what they do they fail to have meaning.
It is a natural human desire to have clearly defined work responsibilities paired with life’s purpose. Everyone asks a cosmic ‘why’ at some point. We’ve established that company missions won’t solve every desire of the human heart but is none the less an important component of an optimal work environment. A clear mission can provide some of this ‘why’ and clarity of responsibility tied to goals for employees.
Step 1 of defining a good mission is defining what the company does accurately by summarizing the produced good or service.
When most firms write a mission statement they fail to define clear economic and social objectives. And, as a result, they struggle to deliver on what employees and customers need and want.
The examples given previously stress simplicity. Simple adjectives and a direct object. Disney makes ‘unparalleled stories’.
Employees, customers and suppliers who fail to develop a positive innate sense of the direction of a company may act in a way that is a self-fulfilling prophecy. Not understanding what a company does can easily lead to a sense of cognitive dissonance.
Every manager knows that the direction of the firm can be felt or intuited by most employees. A common observation in a declining firm is employees bickering over direction of the firm rather than silly or jovial topics. A company without a clear sense of ‘who’ it is, ‘what’ it does, naturally leads to questions about ‘why’ the employee is there in the first place. If the answers are not substantial enough they may lead to an exit.
Step 2 is defining how a company will execute producing the good or service.
Economic mission is what you are doing for the customer. It should specifically fulfill a customer’s want. Economic missions can and should change regularly to fit a competitive market. They are the physical mechanism, what a company does and as a result why it continues to exist. It does so by creating something of value where there was nothing before. It is the most concise statement of a businesses’ economic function.
Defining how the business produces that product or service may accentuate or illustrate the good’s value.
Step 3 Define the achievable market position of the firm within the mission.
Economic mission is a the microeconomics of the business summed to its core.
In a competitive marketplace, the mission of the best businesses should place the firm among or ideally in front of peers, supported by mechanics of how they provide value. Thinking in economic terms is often helpful. Lowering costs, creating something new, or solving an unmet need. A product or service is the expression of the business’s mission.
Step 4 suggest the goal to be achieved and tie it to spiritual mission.
Consider the term mission in a military setting. Troops are sent on a mission to accomplish a specific objective in a time and place with an outcome that is specific and felt in the real world. The outcome is concrete and a new mission can be created once objectives are achieved. If the new companies mentioned above achieve their mission, they will need to send their troops on a new mission. Dealing with the market as it exists today is every company’s mission.
The economic and spiritual mission should fulfill a specific need or customer want to be relevant. If a business cannot clearly define how it is positioned in the market in an economic sense, it will be doomed to fail its spiritual mission.
Spiritual missions, by contrast, should not change regularly. The spiritual mission is the summation of the enduring aspirational characteristics of the firm that must generally be preserved long after any single employee is gone. For work to be fulfilling, companies must serve missions over and above just producing earnings or widgets.
People need goals first, then they need a sufficiently challenging ”why” to make an endeavor worthwhile.
The best spiritual missions clearly aim at something noble. They also directly tie to the economic mission without being as ambiguous as a fortune cookie. The best spiritual missions describe or imply how the company will achieve or play a central part in the company’s broader goal.
Summing it up
Over the long term, businesses that lose sight of one or the other component of their mission fail to survive.
If the two components of the mission are defined adequately, let nothing distract from the mission and the business will succeed. Management’s message to staff is clear and can delivered repeatedly.
If the goals of the company and mechanisms of how the goal is accomplished aren’t clear then no one really knows what they are doing or how to do it. The best missions illustrate how goals are achieved in an economic and spiritual way only fulfilled by the company.
The best companies in the world continue to demonstrate how much getting the mission right matters.
