Who are we?
Whom do we serve?
What do we do?
What do we value? How do we measure ourselves?
Why do we do this? What is our cause?
To draft succinct statements based on questions such as these is very challenging, and will absorb time of the CEO, senior executives, and directors. The best mission statements are short, and therefore easily communicated and repeated at all levels of the organization. Mission statements that are long and complicated sacrifice motive power. Furthermore, great mission statements express strategic intent—that is, what the firm aims to do or be. Exhibit 6.1 gives a sample of mission statements for some major U.S. corporations: notice their brevity and expression of intent.
Often accompanying the mission statement is a list of strategic objectives— these are overarching goals that flesh out the strategic intent and set the direction of the firm. In effect, they answer the question, “Where are we headed?” These are usually stated in the most general terms and mainly frame the effort for the organization: “To be the quality and cost leader …” “To be recognized as the premier service provider …” These objectives are expressed in terms of market position. “To be a Total Quality organization …” “We aim for zero defects.” “To achieve a perfect safety record …” “To be responsible to our environment and community….” These objectives are aspirations for the operational management of the firm. “To create value …” “To deliver shareholder returns greater than those of our peer group …” “To achieve average growth of 15 percent and shareholder returns of 15 percent for the next five years….” These are examples of financial objectives. “To create the premium market franchise….” Ultimately, firms often express the aim to “be the best” or “become the best.” Expressions such as these litter the annual reports and press releases of corporations. Taken seriously, they can galvanize the organization into meaningful action.
The abstract tone of a mission statement and the many possible objectives for a firm may confuse rather than clarify aims for the executive. The key corporate objective (the “first among equals”) observed in many firms and assumed as the baseline goal in this book is to create value within ethical norms. This should serve as the key test of reasonableness for individual proposal and for the priority among competing strategies. Shareholder wealth maximization pursued ethically promotes the survival and prosperity of the firm. As Chapter 26 discusses, directors of a firm are obliged to make decisions in the shareholders’ best interests.
EXHIBIT 6.1 Examples of Mission Statements
| American Family Insurance Group | “The mission of the American Family Insurance Group is to provide financial protection for qualified individuals, families, and business enterprises. We will do so on a profitable basis in an expanding geographic territory. Our primary business focus will be to deliver personal lines insurance products through an exclusive agency force.” (p. 59) |
| Anheuser-Busch Companies, Inc. | “The mission of Anheuser-Busch is toBe the world’s beer companyEnrich and entertain a global audienceDeliver superior returns to our shareholders.” (p. 71) |
| Autodesk, Inc. | “To create quality software solutions and support services that foster innovation, creativity, and productivity for customers and partners around the world.” (p. 78) |
| Blockbuster Inc. | “To be a global leader in rentable home entertainment by providing outstanding service, selection, convenience, and value.” (p. 99) |
| Coca-Cola | “We exist to create value for our share owners on a long-term basis. We refresh the world. We do this by developing superior beverage products that create value for our Company, our bottling partners and our customers.” (p. 132) |
| ConAgra | “Our mission is to increase stockholders’ wealth. Our job is to feed people better.” (p. 139) |
| Duke Power Company | “We produce and supply electricity, provide related products and services and pursue opportunities that complement our business. We will continually improve our products and services to better meet our customers’ needs and expectations, helping our customers, employees, owners, and communities to prosper.” (p. 169) |
| Hershey Foods Corporation | “Our mission is to be a focused food company in North America and selected international markets and a leader in every aspect of our business.” (p. 226) |
| Merck & Co., Inc. | “The Mission of Merck is to provide society with superior products and services—innovations and solutions that improve the quality of life and satisfy customer needs—to provide employees with meaningful work and advancement opportunities and investors with a superior rate of return.” (p. 300) |
| Pioneer Hi-Bred International, Inc. | “Our mission is to provide products and services which increase the efficiency and profitability of the world’s farmers. Our core business is the broad application of the science of genetics. We will ensure the growth of our core business and develop new opportunities which enhance the core business.” (p. 349) |
| Charles Schwab Corporation | “Our mission as a company is to serve the needs of investors. We have all kinds of customers…. We will focus our resources on the financial services that best meet our customers’ needs, whether they are transactional, informational, custodial services, or something new.” (p. 381) |
Source: These examples (and page numbers) are drawn from Abrams (1999), a useful resource for developers and critics of mission statements.
The strategy is a plan for fulfilling the mission and achieving the strategic objectives. To be strategic is to behave like a chess player, looking several moves ahead and assessing the possible countermoves of the opponent to determine the next move. The opposite of “strategic” is myopic, looking ahead only one move at a time. Strategic chess players beat myopic players. The Oxford English Dictionary defines strategy as “a plan for successful action based on the rationality and interdependence of the moves of the opposing participants.”