The purpose of a mission statement and why your company needs one
Whether your business is a corporation employing thousands of people or a start-up company operated out of your garage, you need a mission statement. Many times, the only difference between a profitable company and a failed one is the attention paid to understanding the purpose of the business itself: the mission.
A properly crafted mission statement increases efficiency, productivity, and profitability. When carefully prepared, this statement serves as the constitution of the organization; outlines both the vision and the boundaries of the business. All strategic and marketing plans are based on the foundation provided by the mission statement.
Final performance improves when you strictly adhere to the limits set forth in your return. You’ll make fewer off-track forays, spend less time considering “whether” to add a new line or expand one you already have, and better allocate your scarce resources; time, capital, energy and people.
Mission statements will include all or most of the following information: what you do, where you do it, who you do it for, how you do it, and why you do it.
Here’s a quick, limited illustration of how a mission statement takes all the ideas and input available in the marketplace, on the web, or in your imagination, and channels them in a way that enables you to make the best decisions for your business. Take this simple concept and expand it to cover the six points listed in the last paragraph.
Compare the performance and cost effectiveness of a crayon maker with a limited mission statement and one with a finer version. Both production companies have an assembly line that fills a box with crayons before it is packed in bulk for shipment.
The first manufacturer tells his staff to pack each box with sixteen crayons of the best quality for eventual release to the public. There are 60 different colors manufactured by the company. As each employee picks up a box, they have to decide what colors to include in the box and in what order to pack them. The 60 colors are beautiful and potentially consumer-desirable, but the assembly line slows down as each decision is made and customers don’t always know what they’ll get when they open the box.
The second company also makes 60 colors. Their production line understands that it is packing sixteen high-quality crayons in each box, knowing the specific color and location of the colors within each box. The company offers several different color collections, each packaged on a rotating schedule. The packaging process is fluid, fast and fluid. Efficiency and consistency are the hallmarks of this operation.
Which organization will eventually own the pencil business?
If you are a decision maker, board member, business owner, or entrepreneur, don’t make the mistake of overlooking this overriding requirement of planning for success. Take the time to translate your unique vision into a well-written mission statement.