Either way, doing a reality check on mission statements holds some appeal for you.
It's not hard to understand why.
The simple definition of a mission statement is that it should be a clear statement of the core purpose of the organization. However, common practices then dictate that values, goals, and a host of other issues , such as markets served, products, and so on need to be included. Very quickly, mission statements balloon into something confusing.
So what is a mission statement? Let's do a reality check.
The Origin of Mission Statements
Mission statements come from the military. Unfortunately, the concept doesn't transfer well from a very, very old body of knowledge about making war to a very, very new one, business strategy, which is about staying relevant and sustainable.
Peter Drucker was the first to write about missions. In The Practice of Management, published in 1954, he writes that a mission answers the question "What is our business?"
What a delightfully clear answer. If your organization has audited financial statements, take a look a the notes to the statements. You will find a clear description of the business, at least in the opinion of its auditors.
So how did mission statements get so convoluted that they became the never-ending stuff of Dilbert cartoons?
A lot of the credit has to go to an article Dr. John Pearce wrote for Sloan Management Review in Spring 1982, titled The Company Mission as a Strategic Tool. In it, Dr. Pearce offers an approach for developing mission statements.
Unfortunately, the perspective offered by Dr. Pearce is completely the opposite of what Drucker was describing. Drucker saw mission as being an outside-in, fact-based description of the business. Dr. Pearce offered an inside-out, opinion-based approach: "What do you want the mission to be?" And a era was born - 30 years of weekends ruined by strategic retreat discussions centered on which words to use in the perfect mission statement.
For public companies, the 2008 financial meltdown saw the end of mission statements, a process that had started with the tech wreck of the early 2000's. Too many giants, thought to be best-in-class, from Enron to GM, had gone bust. They all had fancy mission statements.
The mission statement as strategy
Clearly, Dr Pearce's "mission as a strategic tool" is no longer working.
Or maybe Dr. Pearce was trying to do too much with one tool.
If you read his original article, you will see that he was trying to make the mission statement address much more than just Drucker's concept of mission as a business description. Pearce thought it should also cover markets, products, technology, aspirations, values, and so on.
We think Pearce's mistake was jumbling together a number of strategies. The right approach is to think of strategy as being choices of action and to describe each one separately. This way, "mission" becomes one of a number of choices of action to be made and managed.
This was how Henri Fayol saw strategy on the first page of his General and Industrial Management, arguably the first book ever written on the new discipline of strategic management.
They are Financial Management, Organization Management, Production (also known as Service Delivery or Manufacturing depending on what the organization does), Risk, R&D/technology, and Marketing/Sales (sometimes called communications in nonprofits and public sector organizations).
Drucker identified 2 more strategies in The Practice of Management. They are growth and business definition (which Drucker called "mission").
These 8 strategies are common to all for-profit, nonprofit, and public sector organizations. They are the basis of the strategic plan and the starting point for all strategy implementation planning. They are the basis of all organization design.
The reality check takeaways
1. Mission as just business description: Forget drafting mission statements. We now know they failed because they mixed together too many other strategies. Focus on developing an accurate description of the way the business is positioned today in the external environment today. For nonprofits, you can also look at the legislation which created the organization. That will set out a description of what the organization is supposed to do.
2. Don't stop with just a business description: Now that you have a good description of the business definition strategy, keep going! Try to capture descriptions of the other seven strategies.
3. Get consensus on the 8 strategy descriptions: Believe it or not, this is the hardest part in strategic planning; getting consensus on existing strategy! This is when folks start saying things like: "But we don't have a (fill in one of the eight strategies) strategy! This, of course, is code for "I don't like / agree with the strategy we have" or "I don't think the strategy we have is working". But those are very different issues than not having a strategy.
4. Understanding current strategy is the first step in all strategy planning: In our experience, the failure to understand current strategy is a major cause of the failure of strategic planning. How can you plan to change something if you don't known what you are changing?
5. Don't waste time doing mission statements: If you take away one thing from this article, it is to forget working on mission statements. Understanding all eight strategies is more important. And if that is not possible, either because you can't or don't want to rock the boat, you can amuse yourself at the mission statement meeting by watching how close the proposed mission statement comes to the description of the business in the organization's financial statements and by counting how many of the other seven strategies end up in the mission!