5 Reasons Why You Need a Mission Statement
Question: What is it that all successful large corporations have that most small businesses don't?
- Marketing teams based on every continent or
- A Harvard graduate or
- A magic ball to see the future?
No. The Answer is; a Mission Statement.
A mission statement is simply defined as a formal summary of the aims and values of a company, an organisation or an individual. It is a simple way of explaining what your company stands for, your ethos and what guides your affairs.
Another question: How many small retail stores (that are not outlets of a chain store) have you walked into and found a mission statement on the wall? Personally, I have not found any. Do you know why this is so? It is either not seeing the need for a mission statement or not knowing there is a need for one.
A mission statement serves as a guiding principle for your business. Here are 5 reasons why you need one:
- It creates an organisational culture
Few small businesses have an easily identifiable company culture. If they do, it takes too much thinking to determine what it is. Company culture is simply defined as the way things are done in an organization. For a company like Apple, their culture is innovation and simplicity; for Amazon, their culture is a customer-centered approach to business. If you look closely at all the big corporations, it's never difficult to tell what their culture is. This culture is derived from their mission statement and it is the framework upon which their employee handbooks or guidelines are built. It even affects their recruitment processes.
Furthermore, the mission statement helps to give a sense of direction to the business owner, the employees and even to the customers who walk into the store. The mission statement helps to show where the store is headed and importantly, that they have a plan on how to get there. The plan may not be to grow as big as the retail chains, it may just be a simple plan on how to optimize their customer service. Whatever it is, the mission statement points in the direction the business is headed.
- It helps initiate effect
There's a law called the law of cause and effect. It simply states that every effect has a cause and every cause has an effect. Nothing happens by chance or by accident. Organizations that have and follow their mission statements understand the workings of this law. Therefore, it simply means that having a mission statement is a cause that will have its effect.
This way, you understand that things don't just happen, they do so for a reason. For example, if you have ever wondered why people prefer to buy stuff from the neighboring store whilst walking past yours, you should know it isn't by accident. There's a reason for it. Having a mission statement helps you understand things like this better as well as drives your business to achieve those things.
- It provides the impetus to make decisions
Instead of having to react to things, you will be the one who initiates them with a view to having control. Of course, you cannot control everything, but you can control a lot of things that happen, and having a mission statement helps you do so. "How?" you ask. I'll explain using one of my favorite companies, Amazon. Amazon's mission statement is to be earth's most customer-centric company, "where customers can find and discover anything they want...". Amazon pride themselves in being so focused on their customers that their prices aren't primarily fixed for profit, but for customer satisfaction. This mission statement is what drove Amazon to adopt the use of Amabots. Amabots are web crawlers that trawl retail and eCommerce sites to find out their pricing and automatically adjust Amazon’s prices so they can be the lowest possible. This way, Amazon isn't caught unawares when a competitor changes their prices.
This is a good example of how a mission statement helps businesses take charge of situations. As a small retail store, you may not have such resources and you may not have the same mission statement as Amazon. However, you must have a mission statement that drives everything you do in your store.
- It helps you with long-term planning and strategic focus
Having a mission statement helps you focus on the things that matter most and such things are usually long-term in nature. Your mission statement, when strictly adhered to, bars you from making decisions that will substitute short-term profits for the long-term benefits. You will agree with me that most small businesses do not make decisions for the long-term benefit of their businesses, because like I said, they undervalue themselves and do not have the big picture in mind.
Successful businesses always do things with the big picture in mind. For example, Toyota's mission statement includes enriching lives while being safe and responsible. You won't argue that this statement was evident in the instance that in their vehicle recalls that happened between 2009 and 2011 when defects were detected and reported in some of their cars. Toyota places the safety of their customers on a high pedestal as evident in their mission statement. Surely, it cost them a lot to recall these vehicles, but only in the short term. However, you can't deny that in the long term, winning and reinforcing their customers' trust is more important than quick profit.
- It shows you’re a serious business
For me, walking into a small retail store and seeing a mission statement hanging on the wall, and evident in the running of the store will only make me love the store all the more. Also, I believe it comes across as a sign of seriousness and professionalism. Having a mission statement as a small store when people probably do not expect you to have one will go a long way in showing how serious you are about moving forward and that they can trust you
A mission statement is the easiest and simplest way to let people know what you do, why you do what you do, how you do what you do and what you want to achieve with what you do. It is important that every individual and organization has one. In fact, I know families that have mission statements and this can only be a plus to them. What’s your mission statement?
Next week, I'll show you how to craft a suitable mission statement for your small business.