The importance of a mission statement is that it affects your business value and strategic decision-making. Learn how to create one that’s effective and representative of your passion!
No mission statement? Here’s why it’s costing you money, happiness and strategic direction.
A lot of businesses and freelancers can tell you what they do but can’t tell you why they do it – and the importance of a mission statement doesn’t cross their minds.
While making money is one of the primary goals of any business, being profit-driven isn’t enough to educate your strategy, keep yourself or team members engaged, and give you a sense of purpose.
Whether you’re starting a new business or you’ve been in business for a while, be sure to take the time to do the one thing experts say will help you work happier and make more money: write a mission statement for your business.
What Is a Mission Statement?
Before we dig in, let’s quickly recap what makes a good mission statement.
According to Jennell Evans of Psychology Today, a mission statement “defines the present state or purpose of an organization and answers three questions about why an organization exists.”
A good mission statement includes:
- WHAT your business does
- WHO your business does it for
- HOW your business does what it does
A great mission statement should be no more than one or two sentences. It should be simple and memorable enough that any employee should be able to recall it from memory.
Why Are Mission Statements Important?
Understanding the importance of a mission statement will help you craft or refine your own. Here are three very good reasons why every business, including yours, needs a mission statement.
A well-written mission statement can help you:
1. Find Meaning and Greater Fulfillment
Everyone from your employees to your customers should know why you do what you do. What do you draw from when the going gets tough? What guides you when you’re strategizing on what comes next for your business?
That’s where a mission statement comes in. Taking the time to write your mission statement can help you uncover the deeper meaning behind your day-to-day operations. And finding meaning in your work, of course, leads to greater engagement and feelings of fulfillment.
“If people are sad or angry about their work, they won’t care about doing it well. If they are happy and excited about it, they will leap to the task and put great effort behind it. The same goes for perception. If people perceive the work, and themselves, as having high value, their motivation will be high,” write researchers Teresa Amabile and Steven J. Kramer.
So how do you find meaning and value in your work?
According to the Harvard Business Review, people find meaning from three sources, which spiral out from:
- Self: providing for one’s family; making progress in challenging work
- Community: having a positive impact on customers; contributing to one’s community or country
- Society: serving society; helping people around the world
Think about your business’s impact on all three areas. A good mission statement touches on all of them. To see how it’s done, let’s take a look at Starbucks’ mission statement:
To inspire and nurture the human spirit — one person, one cup and one neighborhood at a time.
The mission statement includes Starbucks’ impact on the lives of customers (one person, one cup), community (one neighborhood), and the world (inspire and nurture the human spirit).
Sitting down to craft a well-articulated mission statement can help you better understand the impact of your efforts so that you can do your best work.
2. Increase Business Performance and Earnings
A 2018 study found that companies with employees who have a strong sense of purpose and clarity around their work exhibit higher future financial performance. No surprises there, right?
People who feel like they’re working for a greater cause and who understand the impact of their work work harder and smarter. And organizations filled with these types of people push business forward towards greater financial gain.
A Great Place to Work 2017 report found that employees who felt their jobs had special meaning were 4 times more likely to give extra and 11 times more committed to staying at their jobs.
Customers also want to buy from companies with clear mission statements. A 2018 Accenture study found that 64% of global consumers are more attracted to brands that actively communicate their purpose. A 2019 study from Cone/Porter Novelli found 72% of customers feel it’s more important than ever to buy from companies who share their values.
The results speak for themselves. A Kantar 2018 study found that purpose-led brands have seen their valuations surge by 175% over 12 years, whereas purposeless brands only grew at a rate of only 70%.
To gain clarity for your own business, nothing’s better than sitting down and putting words to paper in the form of a mission statement.
3. Follow a North Star
To summarize what we’ve learned so far, the importance of a mission statement cannot be overstated. Now, let’s get back to the idea of goal setting.
How do mission statements and goals fit together?
Your mission statement acts as a North Star to guide all aspects of your evolving strategic, operational, and management priorities. It helps you focus your goals on what’s most important to you, your business and customers.
As a result, all of your goals should ladder up to your mission statement. It makes it easier to course correct when your business goals start to veer off track.
Mission Statement Examples
Before you jump into creating your own mission statement, it’s helpful to take inspiration from a few thriving organizations.
- Google: Our company mission is to organize the world’s information and make it universally accessible and useful. That’s why Search makes it easy to discover a broad range of information from a wide variety of sources. Some information is purely factual, like the height of the Eiffel Tower. For more complex topics, Search is a tool to explore many angles so you can form your own understanding of the world.
- LinkedIn: To connect the world’s professionals to make them more productive and successful.
- Amazon: We aim to be Earth’s most customer centric company. Our mission is to continually raise the bar of the customer experience by using the internet and technology to help consumers find, discover and buy anything, and empower businesses and content creators to maximize their success.
- Adobe: Only Adobe gives everyone — from emerging artists to global brands — everything they need to design and deliver exceptional digital experiences.
- Tesla: To accelerate the world’s transition to sustainable energy.
- TED: Spread ideas
- Disney: To be one of the world’s leading producers and providers of entertainment and information. Using our portfolio of brands to differentiate our content, services and consumer products, we seek to develop the most creative, innovative and profitable entertainment experiences and related products in the world.
- Etsy: Our mission is to Keep Commerce Human. People make Etsy possible. We provide a meaningful space for sellers to turn their creative passions into opportunity. We enable buyers to discover unique items made with care. And we treat our employees and our community with respect. We’re here because the world needs less of the same and more of the special.
- Coca-Cola: Refresh the world. Make a difference. Our vision is to craft the brands and choice of drinks that people love, to refresh them in body & spirit. And done in ways that create a more sustainable business and better shared future that makes a difference in people’s lives, communities and our planet.
How to Write a Mission Statement
Coming up with a well-written mission statement doesn’t have to be hard. It does, however, require—and deserve—some thought.
So how do you ensure you don’t end up with a dry mission statement? Think about what makes your business unique. And don’t be afraid to let your business personality shine.
Jørgen Knudstorp, the former LEGO CEO who turned LEGO’s struggling business around, offers the following advice:
You really need to think hard about some simple questions, and those are: Why do you exist as a company? What’s the really compelling reason why you exist? Of course, ultimately, you want to come up with something that’s hugely relevant, and at the same time, very unique and really value creating for other people.
Here are six tips for writing a great mission statement:
- Be specific: Keep the scope narrow enough to make it relevant to your company.
- Focus on the future: Be sure it can drive high-level goals for years to come.
- Provide direction: Make sure your mission statement can drive decision making and set priorities.
- Be unique: Say something that no other company mission statement can say.
- Be concise: Avoid jargon and say what you really mean.
- Be values driven: Say what you’re doing to improve your customers’ and employees’ lives.
To learn more about how to write a mission statement, check out HoneyBook’s guide to writing a truly empowering mission statement.
Starbucks: A Mission Statement Success Story
It’s hard to imagine at this point, but business wasn’t always booming for Starbucks. But following the company’s mission statement helped Starbucks CEO Howard Schultz revitalize the business back in 2008.
When Schultz left Starbucks in 2000, the company was one of the most recognizable brands in the world. But by 2008, the company was slumping.
During Schultz’s eight-year absence as CEO, Starbucks had undertaken an overambitious expansion plan that sacrificed much of what made the company great—namely providing a unique customer experience compared to other coffee chains.
According to Schultz, the company had become too focused on stock price and private equity interests. He engineered the sharp by returning to the company mission statement and values.
“The challenge was how to preserve and enhance the integrity of the only assets we have as a company: our values, our culture and guiding principles, and the reservoir of trust with our people…
“You have to have a 100% belief in your core reason for being. Franchising the system would have fractured the culture of the company.”
According to Schultz, the company had plenty of options for increasing shareholder value, such as franchising every location or reducing quality by 5%, but that wouldn’t have spoken to their people-focused mission statement.
Schultz claims the company was able to turn business around thanks to one trip where he brought 10,000 managers to New Orleans. As a group, they spent 54,000 hours volunteering and invested $1,000,000 in community projects.
By understanding the importance of a mission statement and using it as its guiding principle, Starbucks set goals that brought the brand back to what it does best. One look at its climbing stock prices between 2008 and present below and it’s easy to see Starbucks’ strategy paid off:
Get Your Own Mission Statement
No mission statement? No problem. Try our free mission statement generator. It’s fast, free and easy.
Just follow the prompts (fill-in-the-blank style) and our handy tool will create a unique mission statement just for you.
Once you have learned how to write a mission statement, you’ll need to manage every other facet of your business. Use HoneyBook’s small business management platform to streamline everything you need for your business in one place.