Mission, Vision and Values: Statements That Actually Guide Decisions

Most small businesses that have a mission statement wrote it once, posted it on the website and never looked at it again. That is a shame, because a short, honest set of statements about purpose, direction and values can settle arguments, speed up hiring and make everyday decisions easier.

The problem is that the usual way of writing them produces words nobody can use. Strategy professor Richard Rumelt describes a common fill-in-the-blanks template of vision, mission, values and strategies, and says documents built this way are full of "pious statements of the obvious presented as if they were decisive insights."

This guide covers what each statement is for, why so many fail, and how to write versions that actually guide a small team's decisions.

What each statement is for

The three terms overlap, and different authors use them differently. Here is a practical way to keep them apart, drawn from the University of Kansas Community Tool Box and from Jim Collins and Jerry Porras's 1996 Harvard Business Review article "Building Your Company's Vision."

• Mission: what you do and why. The Community Tool Box says a mission statement "describes what the group is going to do and why it's going to do that," and recommends that it be concise (usually one sentence) and focused on the outcomes you are working toward. Collins and Porras use a related idea, core purpose, which they define as an organization's "fundamental reason for being."
• Vision: where you are headed. The Community Tool Box describes vision as your dream: how things would look if the issue you care about were completely addressed. Collins and Porras call the forward-looking part an envisioned future: bold stretch goals plus vivid descriptions of what achieving them would mean.
• Values: how you behave on the way. Collins and Porras define core values as an organization's "essential and enduring tenets," the values it would hold even if they became a competitive disadvantage.

A useful way to remember the difference, in the Community Tool Box's words: "Your vision statement should inspire people to dream; your mission statement should inspire them to action."

Why most statements fail

Patrick Lencioni's 2002 Harvard Business Review article "Make Your Values Mean Something" opens with a list of values: Communication, Respect, Integrity, Excellence. They sound fine. According to the article, they were Enron's corporate values as claimed in its 2000 annual report.

The lesson is not that those words are bad. It is that words alone do nothing. Lencioni's article argues that most values statements are bland or dishonest, and that empty ones are actively harmful: they create cynical employees and undermine managers' credibility.

Rumelt adds a second warning. Broad goals, vision and values matter, he writes, but "by themselves, they are not substitutes for the hard work of strategy." A line like "to be the leading provider of quality service in our region" tells nobody what to do differently on Monday. If you want the difference spelled out, see our guide What Business Strategy Is (and Isn't): A Guide for Small Firms.

Separating real values from wishes and minimums

Lencioni distinguishes four types of values: core, aspirational, permission-to-play and accidental. The article warns that confusing them can bewilder employees and make management seem out of touch.

You don't need the full framework to use the core idea. Before you publish any value, sort it with three plain questions:

1. Do we already act this way, even when it costs us something? If yes, it may be a true core value.
2. Is this something we want to become but don't consistently do yet? Then label it as a goal or an area to build, not as who you already are.
3. Is this the bare minimum any decent business should meet, like honesty with customers? Then it probably isn't what makes you distinctive, and listing it adds little.

Collins and Porras's test is a sharp one for small businesses: would you keep this value even if it became a competitive disadvantage? If the honest answer is no, it is a policy or a preference, not a core value.

How to write statements a small team can use

Here is a simple process. For example, imagine a hypothetical four-person bookkeeping firm working through it.

1. Start with decisions, not adjectives. List three or four recent hard calls: a client you turned away, a hire, a price you held. Ask what principle guided each one. The firm might notice it consistently refuses work it can't do accurately on deadline.
2. Draft the mission in one sentence. Name who you serve, what you do and the outcome. The firm's draft: "We keep the books for local trade businesses so their owners always know where they stand financially."
3. Write the vision as a concrete picture. Collins and Porras favor bold goals described vividly. The firm might write: "In five years, owners in our area say we are the bookkeepers who explain the numbers in plain English, and every client gets a monthly review they understand."
4. Keep values to a few, each with a behavior. Instead of "accuracy," write "We would rather miss a deadline by a day than file something we haven't checked, and we tell the client why."
5. Test with real cases. Would these statements have changed any recent decision? If not, revise.

Lencioni also recommends that a small team own the process, and warns against turning it into a broad consensus-building exercise. In a small business that might simply be the owner and one or two trusted employees, with others invited to react to a draft.

Putting them to work

Lencioni's article says core values must be woven into everything, including hiring, performance management and even dismissal decisions. For a small business, practical steps include:

• Ask about your values in interviews with specific scenarios, not general questions.
• Mention a value by name when you praise or correct someone.
• Use the mission as a filter for new offerings: does this help the customers we said we serve, in the way we said we would?
• Revisit the vision once a year, and check whether your goals actually point toward it.

Collins and Porras argue that enduring companies keep their core purpose and core values fixed while their strategies and practices keep adapting. That is a helpful split. Your mission and values should change rarely. Your strategy, prices, services and plans can change as often as the market requires.

Key takeaways

• Mission says what you do and why, vision describes where you are headed, and values describe how you behave along the way.
• Template statements full of generic words don't guide decisions; specific statements tied to real choices do.
• Only call something a core value if you already live it, even when it costs you.
• A small group can write good statements; test them against real decisions before you publish them.
• Keep mission and values stable, and let strategy and tactics change as needed.

Sources

• Jim Collins and Jerry I. Porras, Harvard Business Review, Building Your Company's Vision (September–October 1996)
• Patrick M. Lencioni, Harvard Business Review, Make Your Values Mean Something (July 2002)
• University of Kansas Community Tool Box, Proclaiming Your Dream: Developing Vision and Mission Statements
• Richard Rumelt, McKinsey Quarterly, The perils of bad strategy (June 1, 2011; Internet Archive copy)