Often the most difficult question to answer is “why” – that three letter word that children can repeat relentlessly until you are driven to distraction, ending up either with “enough now!” or explaining Einstein’s theory of relatively.
Ask the same question about business and you end up with nothing as clear as E=mc2, but literally billions of words in organisational theory and consultant speak. Indeed, company strategy gurus, Collins and Porras suggest that you ask “why” five times before coming close to the purpose of the business. Judging from the responses to my previous articles on this theme, in South Africa you would most likely end on the first take with a dogmatic and unequivocal “to maximise profit”. The second “why” would solicit “more profit” and the third “even more profit”, and so on.
If you want to be bemused, then go through some company annual reports to see what they themselves say about their purpose. You will be fortunate if you can find some coherence around company intent amongst the many pledges and statements that reflect “why” – mission, vision, purpose, values, ethics, goals, branding and slogans – presented either as a new version of War and Peace, or as a three word mantra. At the very least, you will end up thinking that either they are lying or that they are indeed a schizophrenic lot.
So all of the time and money spent on “bosberade” and high flying management consultants on designing missions are wasted by behaviour that belies the statements, or are contrary to popular perceptions set in stone. Yet mission statement architecture has become an industry in itself, spawning some of the highest paid and best known management gurus. Browsing through some dedicated “mission statement” websites (some 6 million are suggested by Google) I was amused to see that you can even buy software programs to tell you how to tell others why you exist! The criteria suggested by two different programmes made it possible for the user to define maybe two or more very different purposes for one company.
The need for a rah-rah mission statement remains unconvincing to many. Statistical research by California academics Lance Leuthesser and Chiranjeev Kohli examined nearly 400 annual reports of the late 1980s to mid-90s. Only 16% of the reports contained mission statements; of these, more than 90% focused on customer needs first.
One thing is clear with all “good” mission statements. They mostly do reflect benevolent intent and making a difference to the good of others. This is the essence of entrepreneurial behaviour at an individual level. It therefore makes logical sense that the same should be present at a company level. Here are some examples:
At Microsoft, we work to help people and businesses throughout the world realize their full potential. This is our mission. Everything we do reflects this mission and the values that make it possible.
The Coca-Cola Company exists to benefit and refresh everyone it touches.
[3M’s purpose is] to solve unsolved problems innovatively.
[Mary Kay Cosmetics’ purpose is] to give unlimited opportunities to women.
[Merck’s purpose is] to preserve and improve human life.
Ford will democratise the automobile.
[At Pick ’n Pay] we serve. With our hearts we create a great place to be. With our minds we create an excellent place to shop.
The above mission statements all convey a “giving” spirit or benevolent purpose. Where not defined, it’s implied all the same. This fits in with the market-driven model. We can fairly say that for a company to be both ethically right and successful it should have a “serving” purpose, and that most companies at least say they have it. And yet, many perceive and experience companies differently. The company whose actions don’t bear out its statements of purpose is telling a lie. And it does so at the expense of consistency in service and focus on the customer and there will be a negative outcome sooner or later.
I came across an astonishing bit of advice in one of the “do-it-yourself MBA” websites: “While firms exist to earn a profit, the profit should not be highlighted (in the mission statement) since it provides little direction to the firm’s employees.” This is outright duplicity! If this is what’s being taught at business schools it is small wonder when employees snigger at battle cries about common purpose. But then the sages at Quick-MBA went on: “What is more important is how the firm will earn its profit since the “how” is what defines the firm.” I would not have taken this source seriously if it did not reflect a fairly common phenomenon.
Humanity seems to be defining itself more and more by what it does and how it does it, instead of why it does it. The “why” gives meaning and meaning comes from what we give, not from what we get. Without meaning we are nothing. We have no identity. We become very disturbed people if the “what” and the “how”, which are reflections of behaviour, are out of line with purpose, motive and intent.
There has been a notable shift in the past decade or two in the way companies see themselves as reflected in mission statements, vision and core values. Reading annual reports was part of my daily fare for some thirty years, and up to about the mid-1980s I saw many mission and vision statements that either explicitly or implicitly focused on shareholder value or profits. Today you will find few that do.
The shift itself is significant. It points to a growing need for companies to behave differently and become truly market-driven as opposed to profit-driven. According to Jim Collins, the best companies have always done this, but mostly market focus is still viewed as a means to an end and not as an end in itself.
The keys to success that apply to individuals and to countries also apply to companies. The overriding principle is that if people by and large are taking more than they are giving, they will create deficits and poverty. If they are giving more than they are taking they will create surpluses and prosperity.
Having an external focus and developing people is as important to a company as it is to a country. Indeed it could not happen at a country level if it didn’t happen at the level of a company, which is after all a cell of national economic activity.
A credible and successful mission is 1% formulation and 99% adherence and application. This is impossible without sincerity.