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Mission Statement Explained How It Works and Examples

Mission Statement Explained How It Works and Examples

Mission Statement Explained: How It Works and Examples

David Gorton, CPA, has over 5 years of professional accounting experience. He teaches accounting to promote financial education and awareness.

What Is a Mission Statement?

A mission statement is used by a company to explain its purpose(s) for being. It is a concise statement that outlines the company’s culture, values, and ethics.

Key Takeaways

  • A mission statement explains a company’s purpose(s) for being.
  • It is a short statement that outlines the company’s culture, values, and ethics.
  • Mission statements motivate employees and reassure investors.
  • To craft a mission statement, consider how your company impacts customers, donors, investors, or your community and why you strive to help them.
  • A mission statement is different from a vision statement, value statement, brand, or slogan.

How a Mission Statement Works

Mission statements help employees remain focused and encourages innovative ways of achieving company goals. It defines the company’s culture, values, ethics, and fundamental goals. It also aligns the goals of stakeholders with that of the company.

It reveals what the company does, how it does it, and why it does it. Prospective investors refer to the mission statement to see if the company’s values align with theirs. For example, an ethical investor against tobacco products would not invest in a company whose mission is to be the largest global manufacturer of cigarettes.

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Large companies often spend many years and millions of dollars developing and refining their mission statements.

Personal mission statements are also crafted by successful individuals, professionals, and investors. These statements incorporate financial, professional, spiritual, and relational aspects of life, helping maintain a healthy work/life balance.

Drafting a Mission Statement

To write a good mission statement, outline what your company does, describe how it does it, and include why you do it. Keep the statement short and to the point.

After drafting the statement, review and edit it, and have someone else provide feedback. Incorporate it into your marketing materials and periodically review it to ensure it aligns with your company’s direction.

Displaying a Mission Statement

Make your mission statement publicly known by incorporating it into your marketing material and website. It can also be used in company-wide standard e-mail signatures. Key members of your company should know the mission statement as it can be used as an elevator pitch when introducing your company.

Advantages and Disadvantages of Mission Statements

Companies benefit from having a mission statement as it outlines goals, clarifies purpose, and adds validity to the organization. It also guides and motivates employees. However, mission statements can be distracting if they are too unrealistic or if management becomes solely focused on high-level targets. Crafting a concise statement can also be time-consuming and resource-intensive.

Mission statements are not required but may be necessary for a grant application or requested by interested investors.

Mission Statement Examples

Examples of mission statements:

  • Nike (NKE): "To bring inspiration and innovation to every athlete* in the world."
  • Walmart (WMT): "We save people money so they can live better."
  • Starbucks (SBUX): "We nurture the limitless possibilities of human connection."
  • Tesla (TSLA): "To accelerate the world’s transition to sustainable energy."
  • JP Morgan (JPM): "We aim to be the most respected financial services firm in the world."
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Mission Statements vs. Other Statements

Mission statements differ from vision statements, value statements, company goals, brand elements, and slogans. They summarize a company’s purpose and identity, while the other statements provide more specific guidance or describe different aspects of the company.

What Is a Mission Statement?

A mission statement is a brief description of a company’s purpose. It explains why a company exists and what its overall purpose is.

What Is an Example of a Mission Statement?

Microsoft’s mission statement is: "Our mission is to empower every person and every organization on the planet to achieve more."

What Is in a Good Mission Statement?

A good mission statement is concise, encompasses the entire company’s purpose, and focuses on a long-term goal.

How Do You Write a Mission Statement?

There is no single best way to write a mission statement. It starts with considering what a business does for its customers, employees, and the public. Collect ideas and refine it into a single sentence.

Brainstorm ideas by reflecting on personal experiences, soliciting ideas from employees, and embracing the broader aspect of your company. For example, craft the mission statement around the possibilities your product presents rather than its technical details.

The Bottom Line

A mission statement is a concise description that encompasses a company’s purpose, culture, goals, and values. It provides a vision for customers, employees, and investors and helps motivate employees and reassure investors about the company’s future.

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