Importance of Business Mission and Vision for a Effective Business Strategy

Mission Statement, Vision Statement, Business Goals, Business Plan

It’s a question I hear again and again: “how do I keep it straight between my mission statement and my vision statement and my strategy?”  Leaders often are asking as they approach a planning period or just prior to the ‘management retreat’. 

The request is really valid: executives want to create clarity for their teams and want to start at the top with a review of the organization’s purpose. According to James Kouzes and Barry Posner of Harvard, research tells us that only 3% of the typical business leader’s time is spent envisioning and enlisting.

Since the company’s vision isn’t visited frequently, it’s tough to remember how terms differ and how they’re applied.  A good boss wants to be sure she is crafting the right tool for the right purpose. Further, some want to know how critical having a Vision or Mission statement really is.  

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Let’s start with definitions...

What is the purpose of a vision statement? 

The vision statement is also known as: Our Aspiration / The Why / The North Star

Definition of vision statement: The optimal desired future state; a stement where the company is headed and what values are guiding that journey; an inspiring portrait of what it will look and feel like to pursue and achieve the organization's mission and goals.

Attributes of your vision statement: The visiton statement shapes our understanding why the organization exists and what role it plays in the world. 

  • Focus is on an ideal; a future which may never be achieved but always sought
  • Defines where you see the organization some years, maybe decades, from now
  • Inspires the team to give its best

What is the purpose of a mission statment?

The Mission statement is also known as: Our Purpose / The What

Definition of mission statement: A statement of how we will accomplish our vision; what and how the organization wants to accomplish.

Attributes of the mission statement: 

Answers four questions about why an organization exists :

WHAT it does;

WHAT value does it bring?
WHOM do we do it for; and
HOW it does what it does.

  • Broad goals for which the organization is formed. Prime function is internal;
  • Defines the key measure(s) of the organization's success;
  • Defines the market(s) to be served.
  • Prime audience is the leadership, team and stockholders.
  • Concrete, goal-oriented language

Individuals can see how their contribution supports the strategy.

What is the purpose of business strategy?

A business strategy is also known as: Our Roadmap / The How

The definition of a business strategy: How resources should be allocated to accomplish the mission.

Attributes of a business strategy: 

  • Short- and long-term goals and should explain how those goals will be achieved
  • The guardrails that define prioritization, resource allocation and decision-making
  • Specifically, who we serve and how we will reach them.
  • Creating the Strategy typically follows the delineation of Vision and/or Mission.

Business Coaching, What is a Mission Statement, What is a Vision Statement

Two great examples

Caremark is a good example of distinguishing between Vision and Mission where they can from this information create a business strategy:

  • Caremark’s Vision: We strive to improve the quality of human life.
  • Caremark’s Mission: We provide expert care and innovative solutions in pharmacy and healthcare that are effective and easy for our customers.

Ikea provides another good example.  They use slightly different language but the content works well in this framework:

  • Ikea’s Vision: To create a better everyday life for the many people. (Yes, the wording is awkward for our American ears but you get the point.)
  • Ikea’s Mission: The business idea: we shall offer a wide range of well-designed home furnishings at prices so low that as many people as possible are able to afford them.  The HR idea: to give down-to-earth, straightforward people the opportunity to grow both as individuals and in their professional roles so that together we are strongly committed to creating a better everyday life for ourselves and for our customers.

Vision statement, business mission, business goals

Do I need a Vision or a Mission statement?

Many organizations succeed without one or both. I doubt you could find a correlation between financial results and the existence of a mission statement.  However, good reason exists to spend time thinking about this.

First, providing a vision is a big expectation of Leadership.  When Harvard’s Kouzes and Posner surveyed many thousands of people and asked, “What do you look for and admire in a leader? “ 72% said the leader should be forward looking.  Only honesty was a higher rated trait for leaders.

Next a Vision and Mission provide essential clarity.  People doing the work need to understand the basis for how major decisions are made and the values that support those decisions.  By developing and communicating Vision and Mission, people understand how their contribution fits into the overall organization’s performance. According to Gallup, the highly-regarded research organization which has studied thousands or organizations and teams, understanding how your individual contribution fits into the organization is a core driver of employee engagement and performance. 

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Further, team members and customers can align and evangelize to your values much more easily when they can point to a well-communicated vision.

Finally, Vision and Mission grease the skids of decision making for the business strategy. Executives and middle managers are called upon to make resource allocation decisions on a daily basis: how to invest capital, who to hire, which strategy to pursue.  When Leadership has established a clear aspiration and purpose for the organization, those decisions are based on the overarching values for the organization and create consistency of purpose.  Managers can rely on a set of guardrails on which to frame discussions, make thoughtful recommendations and deliver investment decisions.

Is publishing a Mission or Vision statement the special sauce for improving performance of your organization?  Probably not, but it certainly contribute to building better, more enthusiastic and driven teams.

What do you think? Let me know in the comments!

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Andy Scantland Business Coach, Executive Coach, Career Coach, Life Coach

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