Company Waste: The Mission Statement
By: David Van Rossum
Walk in to any company today and you will be sure to see a mission statement posted prominently for all to see. These statements are used as a tool to help bind employees toward specific ideals and to show customers and the market place that the company has a guiding theme. These statements are revisited from year to year by in-house focus groups sometimes aided by consultants. Many times they are joined by sister statements of various names that focus more toward the execution of the mission statement. These sessions are often valuable as forums to exchange ideas and provoke lively discussion, a worthy use of time. Their intended products, however, are not as useful as those discussions. The mission statement often talks about being innovative, or providing the best product or service. They may extol the company’s aim to be community oriented and to provide a healthy workplace. Some may speak to the environment. They are all short and to the point. Few employees think of these statements as they go about their daily business.
These statement are a little like going to church once a week, though as stated previously they are visited less frequently. Organizations are seeming to fulfill a responsibility to tell themselves and the world what they are striving to be. Different thoughts emerge in different sessions separated by time and changes in the company or marketplace. They change the same way quality programs do. They have different names. Quality programs are meant to ensure and improve quality. Some programs teach you how to measure quality consistently and uniformly. They teach you how to measure processes even if it means merely depicting what you did wrong again and again. They do not remediate, they report. Consultants and specialized companies make their money by designing and showing how to implement their programs so the company can proudly proclaim that they have become certified on how to measure the quality of their operation. The real challenge, I have found, is not figuring out how well you do something, but concentrating on how to improve on what it is you do. Mission statements do none of the above.
Too often management gets embroiled in discussing mission and purpose without injecting the reality of why they exist at all. A business is incorporated to make money. The money they make is to either be distributed to shareholders or put back into the business to generate further return. For a nonprofit this return may be in the form of providing more services or reaching a larger population. For profit companies may reinvest in order to increase future income, adding to the worth of the company for its owners. It’s that simple. Those ideas should be the focus of a mission statement.
The words in contemporary mission statements, if adhered to absolutely, can enhance or impinge on the concepts of growth or increasing profits. Many companies have statements that talk about being environmentally sensitive. They may change packaging or choose “green” energy to power their operations. These practices invariably increase costs. This rise in cost will result in lower margins if the company is in a price sensitive environment. If not, they may be able to increase their prices to their customers and not take a hit for their social awareness. Mission statements that call for “the best” product or service do not take into account that providing such may require significant additional resources that would cost them right out of the market. Companies that tout community service and are true to their pledge, lose productivity when employees are not available due to “service days” that are paid for by the community and do not add to the productivity of the company.
Don’t get me wrong. I’m all for community involvement, striving to be the best, and being sensitive to the environment. They are qualities that I admire greatly in companies that actually implement programs that make them “good corporate citizens.” Those elements of a company’s makeup are, to me, part of a definition of what the company is as it moves toward its real mission of increasing shareholder value. Community involvement and green energy can be an effective part of an advertising program. Firms that donate money or employee time are, more often than not, rewarded with signage and local media coverage that makes the commitment a cost effective tool in reaching customers. Altruism is not, it would seem, free in these circumstances as ink space and banners are dedicated to trumpet the donor and not the cause. That’s okay. Again, I see this as a tool toward the real mission of a company. I don’t think that organizations in decline will make the same commitment to being green and participating philanthropically that they would when profits were growing. That doesn’t make sense if it’s in their mission statement, does it? Shareholder value trumps charity, and it should. It is why the company exists in the first place.
So I ask, why spend money and time over and over again in order to define the company’s mission when it can be summed up in ten seconds? Some of that money can drop to the bottom line and maybe some can go to a solar panel. Replace those framed words with framed results and defined business goals. Safety programs do this well. They advocate a goal such as number of lost days in a period and then report on the progress. The idea is to promote and provide safety. Simple. We should stop spending money and energy on poetic statements and instead channel that energy and time into increasing the value of our products, services and corporate value. If management needs to gather and figure out what the mission of their company is, then something is probably broken. Why do they do it? They have been told by experts that they should. It is wonderful to want to provide “an employee friendly” workplace. Why do it? They want to attract and retain the best talent. Why? To increase shareholder value. Would those talented employees work for free? No. Let’s not kid ourselves that the comfort of our employees beyond what is legally required is our mission. It is our means to be successful. (Did I mention that employees rarely pay attention to the mission statements posted prominently in their workplace?)
Working in higher education, it's my experience that mission statements are typically constructed "post-hoc" and sometimes altered over time (not necessarily because the mission has changed, but perhaps because we aren't adhering to the original one), and this seems to further support your contention. But I wonder if, like sporadic church attendance, there is some ounce of value in constructing or revisiting the mission, even if its just the reminder that we are part of a larger organization working toward a shared goal and not in isolation. Could a mission statement, though perhaps an exercise in self-deception, inspire employees toward better output more than the actual underlying mission (of profits)?
ReplyDeleteDavid,
ReplyDeleteWhile you might argue that a corporation's main mission is to make money, I would argue that this is a matter of opinion. A corporation is simply a legal distinction among different types of organizations. Any organization, corporate or non, for-profit or non-profit, is established by its leaders and or members to accomplish a shared goal or goals. Certainly, most would say that making money should be a goal of any corporate organization. But that does not have to be the only goal.
The responsibility of determining those goals lies with ownership and senior management. If my goal is to make money *while* helping the environment, then one would expect to see this in my company's mission statement, its strategic initiatives, the way members were rewarded & promoted, and any number of other ways throughout the company.
There has been much written over the past few years about the idea of "social entrepreneurship", that is the idea that a company can have multiple goals. You may want to take a look at "Higher Ambition", a recent book on the topic written by several professors at Harvard Business School. It lists multiple examples of executives who have chosen very specific "missions" for their organizations that included *both* making money *and* making a difference.
Gina- I agree it is important to bind employees toward better output or the feeling their individual accomplishments are an important part of the organization’s stated mission. A football analogy would be to acknowledge the blocker as well as the running back that scores the touchdown. A football team’s mission is to score more points than their adversary. The goals of a game may include such elements as controlling the clock, winning the turnover battle or keeping the opposing quarterback in the pocket. The main goal is to win. Many would argue that goes without saying. My point is that it is important to include that main objective in the mission statement, especially when communicating to a large group that does not have input to those who craft the statement. Thanks!
ReplyDeleteTuck- Point taken on different types of incorporations including those whose purpose is not solely profit driven. I agree with your contentions and appreciate your book recommendation. My post was designed to highlight the fact that too many mission statement conferences and their product result in talking about how the organization would like to be viewed or crafting proclamations of worthy objectives that they aim to accomplish as they go forward while ignoring the main objective of ownership. These efforts are time consuming and miss the mark. I have no issue with including goals of social responsibility in an objective corporate publication to employees and the marketplace. I applaud companies that aim to be socially responsible and reference that in my writing. I am arguing that the goal of ownership should be the main theme of a mission statement. Owners want a return for their investment. If that return, for example, is an improvement in the community or protecting the environment then that should be the main theme of their mission statement. Organizations that incorporate for philanthropic goals do a great job of including those goals in their mission statements. If owners invest for a financial return then that goal should be the main theme of the mission statement- often it is not included. I do not argue that socially conscious objectives be excluded from a company’s mission statement. I am arguing that the owners main goal be included as the central theme. Thanks!