People Innovation Excellence

Developing a Company Mission Statement

The defining characteristic of a strategic vision is what it says about the company’s future strategic course—“the direction we are headed and the shape of our business in the future.” It is aspirational. In contrast, a mission statement describes the enterprise’s present business and purpose—“who we are, what we do, and why we are here.” It is purely descriptive. Ideally, a company mission statement (1) identifies the company’s products and/or services, (2) specifies the buyer needs that the company seeks to satisfy and the customer groups or markets that it serves, and (3) gives the company its own identity. The mission statements that one finds in company annual reports or posted on company websites are typically quite brief; some do a better job than others of conveying what the enterprise’s current business operations and purpose are all about.

Consider, for example, the mission statement of Singapore Airlines, which is consistently rated among the world’s best in terms of passenger safety and comfort:

Singapore Airlines is a global company dedicated to providing air transportation services of the highest quality and to maximizing returns for the benefit of its shareholders and employees.

Note that Singapore Airlines’s mission statement does a good job of conveying “who we are, what we do, and why we are here,” but it provides no sense of “where we are headed.”

An example of a well-stated mission statement with ample specifics about what the organization does is that of St. Jude Children’s Research Hospital: “to advance cures, and means of prevention, for pediatric catastrophic diseases through research and treatment. Consistent with the vision of our founder Danny Thomas, no child is denied treatment based on race, religion or a family’s ability to pay.” Facebook’s mission statement, while short, still captures the essence of what the company is about: “to give people the power to share and make the world more open and connected.” An example of a not-so-revealing mission statement is that of Microsoft: “To empower every person and every organization on the planet to achieve more.” It says nothing about the company’s products or business makeup and could apply to many companies in many different industries. A person unfamiliar with Microsoft could not discern from its mission statement that it is a globally known provider of PC software and a leading maker of video game consoles (the popular Xbox 360). Coca-Cola, which markets more than 500 beverage brands in over 200 countries, also has an uninformative mission statement: “to refresh the world; to inspire moments of optimism and happiness; to create value and make a difference.” The usefulness of a mission statement that cannot convey the essence of a company’s business activities and purpose is unclear.

Occasionally, companies couch their mission in terms of making a profit. This, too, is flawed. Profit is more correctly an objective and a result of what a company does. Moreover, earning a profit is the obvious intent of every commercial enterprise. Companies such as Gap Inc., Edward Jones, Honda, The Boston Consulting Group, Citigroup, DreamWorks Animation, and Intuit are all striving to earn a profit for shareholders; but plainly the fundamentals of their businesses are substantially different when it comes to “who we are and what we do.” It is management’s answer to “make a profit doing what and for whom?” that reveals the substance of a company’s true mission and business purpose.

Source: Thompson, Arthur A., Margaret A. Peteraf, John E. Gamble and A.J. Strickland III. 2018. “Crafting and executing strategy : the quest for competitive advantage: concepts and
cases”. New York : McGraw-Hill


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