What You Can Tell About A Company From Its Mission Statement

19/12/2014 7:51 AM IST | Updated 15/07/2016 8:24 AM IST

"The two most important days in your life are the day you are born and the day you find out why." - Mark Twain

Why do we exist, is the question not just every individual needs to ask but also every organisation needs to ask.

Most entrepreneurs started their organisations with a higher purpose in mind -- to solve a customer's problem. But in their process of growth, while their organisations grew big, they somehow lost the central idea of why they exist and spoke mostly of stakeholder value as the only criteria for success. While some other entrepreneurs started their organisations and entered into business because they saw an opportunity to make money, or a fortune, and they soon realised that to create passion across the organisation, they need to have a vision and purpose that makes sense to every employee.

Jack Welch, former CEO of GE was seen as an outstanding implementer of the so-called 'shareholder value theory' but after retirement, he came out as one of the strongest critics of shareholder value proposition. In an interview in the FT on 12th March 2009 he said, "On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy... your main constituencies are your employees, your customers and your products. Managers and investors should not set share price increases as their overarching goal. Short-term profits should be allied with an increase in the long-term value of the company."

In fact, CK Prahlad probably made only a small grammar mistake when he wrongly chose the preposition "at" instead of "for" when he came up with his idea "Fortune At The Bottom Of The Pyramid". That mistake sent thousands on entrepreneurs in a gold-rush mode, making them re-live the California Dream and the American Dream concepts once again. Organisations exist to make profit, is like saying we exist to eat, drink and reproduce. Yes they are important, but we know we exist to do more than that.

My organisation has facilitated interventions to create vision, mission and values for a large number of for profit and non-profit organisations in the last 16 years. In my study of vision statements of organisations, I found three distinct categories: many have vision statements wanting to positively be billion-dollar companies and have clearly stated revenue as a vision; the second category has statements like -- most respected, number one in our category, most successful etc; the third category has statements like -- make people happy, improve lives and organise world's information etc.

So the first place where one can look to see if the organisation is focused on a higher purpose is to check the vision and mission statement. Does the vision statement talk about making the world a better place or is it internally focused and shareholder-value-focused? Remember, if your emotions can influence your thoughts and language, your language can influence your thoughts and emotions too. This might be the right time to take another look at your vision statement and ask the question, why do we exist?

Now, if you think you have articulated a higher purpose and have a great vision statement, then its time to check how your organisation is living up to it. Are there enough conversations about the vision and purpose in the boardroom? Is the purpose reflected in your strategy? How do you reflect your purpose in your short-term goals? Recently, I facilitated a three-year goal-setting intervention for a mid-sized multinational pharmaceutical company and we articulated the goal as "touching one crore patients by care or cure by 2017".

Having a clearly articulated, strategically communicated and thoughtfully reflected purpose in all management practices of an organisation can create higher levels of employee engagement, motivation and stakeholder value in the long run. In organisations, what gets measured gets done. So it's time to create a higher purpose index and start measuring how your organisation is reflecting the higher purpose in all your management practices like hiring, performance management, people development, strategy, organisation culture, values, marketing and branding and innovations. The fuel that drives all these should be your purpose of existence.

The companies that survive longest are going to be those who identify their uniqueness, and articulate what they could give to the world, to make the world a better place.