At the heart of every strategic plan, lies a mission statement. Some regard a mission statement to be the driving force behind a company's existence that should guide it into the future. In theory, companies should consider their mission statement when a potential alliance, merger or acquisition is undertaken. In practice, companies allow exciting and "not-to-be-missed" business opportunities to mold their mission statement into something that is vastly different of what has been established for the upcoming years.
Companies that are quite content with operating with a flexible mission statement run the risk of losing their focus in their industry and the reason of being in business. Other firms which wish to remain loyal to a statement that takes into account new opportunities may want to revamp their raison d'être.
This article will provide a framework for firms that wish to discover whether they should reformulate their mission statement. The framework is based on the following three questions that companies should pose in regards to their established mission statement and current situation in their respective industries:
After answering the questions above, individuals who are responsible for drafting the statement should have an idea of what needs to be modified to communicate a clear vision of where the company is going in the future. To get the most of this article, it is recommended that a copy of your mission statement should be close at hand or download and print the following template to draft a mini version of your statement. After you have answered the questions, examine the formula that is provided at the end of this article. The formula will assist any group that is having difficulties agreeing on what their mission statement should be.
Who are you?
This is a fairly simple question to answer; however, it is important that it is not open to interpretation. A vague description will lead to confusion among stakeholders. Here are some vague descriptions of three well known companies from North America.
As the table suggests, vague descriptions can always be clarified to define the question, "Who are you?" An alternative question to consider is, "What business are you in?" Every McDonald's franchise that is awarded is in the fast-food business to provide customers with a variety of meals that can be eaten on the go at inexpensive prices.
Apply this question to your company. Remember what your company used to do two-to-five years ago. Is it radically different from what is being done today to generate revenues? If so, this should be your first warning signal that you might want write an updated mission statement.
Who are your customers?
Consider the following regarding the individuals who obtain your products or services:
All of the questions stated above need to be asked once conditions in the external environment have changed over time. Answers to some of the questions may prompt a quick reaction to change your target market; however, it may not cause a change in your mission statement. If there is a large disparity between past and present profiles of the consumers of your product or services, the present profile should be evident in your mission statement. Companies that were slow to conduct business online had to tweak their statements to reflect the reality of potential customers buying books on the Web.
What sets you apart from everybody else?
An easy way to reply to the question is to turn to the marketing department and use your catchy advertising slogan. When you extract all the marketing fluff, you will find your competitive advantage. The competitive advantage should be a clear identification of what you are doing right to keep customers coming back to you. The advantage often reflects the main strengths of the company and they are clearly stressed in their mission statements. Here are some examples from Ford Fleet, IBM, and Kmart:
Chances are that these companies' competitive advantages have changed throughout the years as they found new innovative ways to reach strategic objectives.
As you re-evaluate your competitive advantage from your established statement, investigate the status of the company's current strengths. If the current strengths are showing signals of weakening, your mission statement might be in need of fine-tuning for the future.
The formula to focus on your new mission statement
Drafting a new mission statement is not an easy exercise to undertake. Use the framework presented in this article, which is geared towards assisting groups in evaluating their old statements and improving upon them. As more individuals become more involved in the drafting process, the chances are that some individuals will lose some perspective on what their company does, who are their customers, and what they do the best. The following formula is one of many methods to have a group focus on the task at hand.
New Mission Statement = Key Market + Contribution + Distinction
Consider the following mission statements from Otis Elevators and McDonald's. Each of their statements is broken down into the key variables needed for the formula.
The different parts of the statements are shaded to denote the key market (in red), contribution (in green) and distinction (in blue).
If you wish to utilize this formula, it is evident that there are three things that your group should clearly define before finalizing the mission statement.
A mission statement should be a source of inspiration for companies and should not be a barrier to new opportunities. Companies which remain steadfast to their mission statement that was written years ago when their external and internal environments were different from the present ones run the risk of forgoing opportunities to grow. In order to welcome new avenues to increase revenues and market share, some companies must allow the present business environment to influence shape of mission statements in the long run. The renewed mission statement should reflect the current realities of present existence in the industry, the customers you are reaching and what you need to remain competitive.
This article was originally featured at www.competia.com and is reprinted with permission. Competia Online is a production of Competia Inc.