Here’s a shocker: Mission and value statements matter more than you might think.
A study of public companies looked at the words in mission statements to see whether there was any correlation with how those companies performed.
Indeed, there was.
These words were losers:
- ExcellenceIn fact, they appeared in mission statements for companies that underperformed the S&P 500 an average of 18 to 30 percent.Winning words were:
- Customer focus
- Improving the environment
- Shareholder value
- Global citizenshipThese words translated into out-performing the S&P 500 as much as 68 percent.What’s the difference?“Single, generic words are used to stabilize a dysfunctional culture,” says Vistage speaker Judith E. Glaser , CEO, Benchmark Communications, Inc.“If a company is having issues with quality, it might choose ‘excellence’ as a word. Their goal may be to use it like a compass to navigate out of the murky waters of their problem. But instead, it’s got the drag of an anchor, always pulling them into the past. One word is not powerful enough to help people step into the future,” she says.“Companies that put ‘teamwork’ first often have a lot of politics,” she says. This engenders power struggles. Other single-word descriptors were too simple to get across a unique idea, or to communicate substantial significance.
- One word is not enough to convey real meaning in value statements.
- Make these statements specific, not generic. It takes more than one word to add specificity.
- Ensure that your mission statement is “values driven” not “ego driven.” You know it is values-driven mission statement if it connects with something larger than yourself/your company.How much of a difference can the best focus produce?Berkshire Hathaway is the highest performer in the second values-based group. With its reputation for success, Warren Buffet’s company capitalizes on multiple words to capture complexity.“Companies that describe their missions more precisely are not about ‘fixing a culture that’s broken,’ but about ‘what we aspire to create together’,” says Glaser.She uses Herman Miller, a furniture company known for innovation and problem-solving design, as an example. Devastated by the business fallout after Sept. 11, 2001, Herman Miller needed to regroup.To that end, it came up with a one-page document that it calls “Things That Matter Most: Incomplete Thoughts about Herman Miller.” It’s a work-in-progress with definitions for nine values.
Rather than using the word “excellence,” Herman Miller chose the word “performance,” and explained what that means this way: “It isn’t a choice, it’s about everyone performing at his or her own best; we measure it; it enriches our lives and brings value.”
Rather than using the word “teamwork,” Herman Miller uses the word “inclusiveness,” and describes it this way: “To succeed as a company, we must include all the expressions of human talent and potential… when we are truly inclusive, we go beyond toleration to understanding all the qualities that make people who they are, that make us unique, and most important that unite us.”
But do all those words really translate to the bottom line?
Herman Miller’s sales growth has been impressive. In December 2005, the $1.5 billion public company reported a second quarter sales increase of nearly 19 percent and an orders increase of 11 percent from the same period one year earlier–fueling net earning growth of more than 81 percent.
Clearly, it doesn’t hurt to be thoughtful and philosophical—even if you don’t want to go into as much detail as Herman Miller does. The important thing is to turn thoughtfulness into action.
Glaser advises that companies take their mission and values statements and:
- Put copies on every desk/workstation.
- Display them in the entrance.
- Discuss them in meetings.
- Use them in conversations. “You have to live it,” she says. “Then, the mission and values have meaning.” Vistage speaker Judith Glaser is author of Creating We: Change I-Thinking to We-Thinking & Build a Healthy Thriving Organization, (April 2005), and The DNA of Leadership (March 2006); Platinum Press, an imprint of Adams Media.