Why is it important for a company to have a vision mission and core values in the first place?

One of the first things that any observer of management thought and practice asks is whether a particular organization has a vision and mission statement. In addition, one of the first things that one learns in a business school is the importance of vision and mission statements.

This article is intended to elucidate on the reasons why vision and mission statements are important and the benefits that such statements provide to the organizations.

It has been found in studies that organizations that have lucid, coherent, and meaningful vision and mission statements return more than double the numbers in shareholder benefits when compared to the organizations that do not have vision and mission statements. Indeed, the importance of vision and mission statements is such that it is the first thing that is discussed in management textbooks on strategy.

Some of the benefits of having a vision and mission statement are discussed below:

• Above everything else, vision and mission statements provide unanimity of purpose to organizations and imbue the employees with a sense of belonging and identity. Indeed, vision and mission statements are embodiments of organizational identity and carry the organizations creed and motto. For this purpose, they are also called as statements of creed.
• Vision and mission statements spell out the context in which the organization operates and provides the employees with a tone that is to be followed in the organizational climate. Since they define the reason for existence of the organization, they are indicators of the direction in which the organization must move to actualize the goals in the vision and mission statements.
• The vision and mission statements serve as focal points for individuals to identify themselves with the organizational processes and to give them a sense of direction while at the same time deterring those who do not wish to follow them from participating in the organization’s activities.
• The vision and mission statements help to translate the objectives of the organization into work structures and to assign tasks to the elements in the organization that are responsible for actualizing them in practice.
• To specify the core structure on which the organizational edifice stands and to help in the translation of objectives into actionable cost, performance, and time related measures.
• Finally, vision and mission statements provide a philosophy of existence to the employees, which is very crucial because as humans, we need meaning from the work to do and the vision and mission statements provide the necessary meaning for working in a particular organization.

As can be seen from the above, articulate, coherent, and meaningful vision and mission statements go a long way in setting the base performance and actionable parameters and embody the spirit of the organization. In other words, vision and mission statements are as important as the various identities that individuals have in their everyday lives.

It is for this reason that organizations spend a lot of time in defining their vision and mission statements and ensure that they come up with the statements that provide meaning instead of being mere sentences that are devoid of any meaning.

Authorship/Referencing - About the Author(s)

The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.

Imagine driving into work each day, full of purpose and conviction. You know where your business is going (vision), you have a plan to get there (mission) and the standards (values) on how to operate your business.

What a great place to be!

Unfortunately, not every business owner has this satisfaction.

When I have an initial Coaching & Mentoring meeting with a business owner, I ask imagine we are having this conversation in +3 years, tell me what you have built and how you achieved it? Most business owners can answer this with some semblance of vision, but when I go on to ask have you clearly and eloquently established this informal vision & mission statements they say no. Some business owners have most of this in their business plan, if they have one, some do not.

The understanding of how important a clear vision, mission & values are in a business is grossly underestimated.

Business owners, plus their stakeholders, can be genuinely inspired if their business has a compelling vision and a clear, worthwhile mission. These statements can be highly motivating when they are expressed clearly and with intent. Especially when you communicate them effectively to everyone in the business. They also express the business’s purpose to customers, suppliers, and the media, on whom it can have the same effect as well. These statements are the words leaders use to explain an organization’s purpose and direction. When expressed clearly and concisely, they can motivate your team. or the business as a whole. With an inspiring vision of the future.

What do they mean?

Mission statements

They define the business purpose and primary objectives. These statements are in the present tense, and they explain why you exist as a business, both to members of the business and to people outside it. Mission statements tend to be short, clear, and powerful.

Vision statements

They define your business purpose, focus on its goals and future aspirations, and should be uplifting and inspiring. They’re also timeless: even if the business changes its strategy, the vision will often stay the same.

Values

They underpin the vision and mission and are the core beliefs or DNA of the business. The standards of how the business owner wants to operate the business. Whether it is how to treat customers and other employees, what they strive for, and how employees want to feel when they work there. The importance of business values is seen in a number of different ways. They help guide decision making They inform customers about what the business stands for, and what they can expect as a customer. And as a business, they are valuable for recruiting and retention. Everyone in the business needs to understand your values. Don’t become preoccupied with trying to sound like the next Shakespeare and create values from the heart. Use strong concrete language to make it clear what your values mean and how they represent your business.

Therefore the importance of vision, mission, and values so vital in your business. They become the very foundations upon which an owner will build a solid, sustainable, and growing business.

• Use them to get the most from your employees, they will be as enthused as you if you have direction and a route. This is Alignment – everybody pulling in the same direction.
• Communicate them to your stakeholders
• Use the vision to become the lens to determine decisions, operations, and customer experiences. When your people see first-hand how purpose and vision translate to decisions, actions, and customer experience, they become true believers.
• Review the mission regularly as to whether you are on track or not then take actions to get back on course if needed. Implement measures to track progress.
• Be a leader and excel at your values, this will give you the right behaviours and set the culture and standards of your business.

If you would like more information about the business support Business Doctors offer, get in touch. Or you can find your local Business Doctor here.

Why is it important for a company to have its mission vision and core values?

Why is it important that organizations have mission vision and core values and what are its effect to their employees individual performances?