An innovative culture starts at the top. The company’s senior leaders—its C-suite of officers—have the most important responsibility in the entire process: they must articulate the company’s “purpose for being”—the company strategy. Without that, everyone else in the organization will lack the guidance they need to be effective at innovation.
The first step for the senior leadership team is to develop mission and vision statements. A mission statement describes what the company is today: its purpose, values, and primary focus. A vision statement describes what the company wants to be in the future.
A company mission statement serves multiple audiences. It helps customers understand the value the company provides. It gives investors insight into the potential value of the company in which they are investing. It helps employees understand the business priorities. And it offers mid-level managers guidance as they develop the plans for their own business segments.
Company mission statements range from the very explicit to the very general. Ideally, a mission statement should be:
No more than a few sentences long. One or two sentences is best.
Inspiring to employees, clients, and for public companies, shareholders.
Explicit without being too limiting.
Not overly detailed. It should allow for innovation in markets of interest to the company, even ones not currently served.
Able to stand on its own, although it can be supplemented with additional detail to resolve uncertainties.
A mission statement written at a very high level can be inspirational to customers and investors but will be less helpful to the internal organization. In that case, it should be supplemented with an added level of detail.
Let’s see how one company has done this. Here is Microsoft’s mission statement as published in its 2023 annual report:
Our mission is to empower every person and every organization on the planet to achieve more.
Most experts see this mission statement as a vast improvement over Microsoft’s previous one, “A computer on every desktop and in every home.” I agree, although I will be quick to say Microsoft’s original mission statement was appropriate for its time. But Microsoft has evolved over the decades, and its mission statement also needed to evolve. In 2014, newly appointed CEO Satya Nadella recognized that Microsoft was suffering from a mistaken belief that it knew more than customers did. He drove a culture change away from being a company that thought it knew everything to one that wanted to learn everything.
One of the first changes Nadella made was the new mission statement. It goes beyond computers on desktops. It grants Microsoft permission to pursue important new markets such as cloud computing and artificial intelligence. It also legitimizes the vision of releasing versions of Microsoft applications that run on Apple hardware (I am writing this very text in a version of Microsoft Word running on an iPad, a concept that would have been unimaginable a decade ago).
But if I were a mid-level manager in Microsoft, I would find this mission statement too vague to help me build a plan for my own business unit. There are numerous ways to “empower every person and organization on the planet to achieve more.” Many are outside Microsoft’s scope of business. (Does Microsoft envision entering the consumer financial planning market? Will they launch a career coaching enterprise?) And what about the “on the planet” limitation? Are the International Space Station and upcoming journeys to Mars outside of Microsoft’s scope?
CEOs and outside consultants are likely to roll their eyes and dismiss such questions as coming from someone not on board with the message. But I have presented mission statements to teams often enough to know these are exactly the kinds of questions a CEO must be prepared to answer. This is especially true for high-tech companies. Engineers, naturally skeptical of anything said by senior managers, are especially prone raise these kinds of questions.
Fortunately, Microsoft didn’t stop with its high-level mission statement. Its 2023 annual report also includes a level of detail that puts hard bounds on its mission:
We strive to create local opportunity, growth, and impact in every country around the world. We are creating the platforms and tools, powered by artificial intelligence (“AI”), that deliver better, faster, and more effective solutions to support small and large business competitiveness, improve educational and health outcomes, grow public-sector efficiency, and empower human ingenuity. From infrastructure and data, to business applications and collaboration, we provide unique, differentiated value to customers.
This added detail frames the company’s mission without being unduly restrictive. While it may not be as important to customers and investors, it is what the internal organization must know to drive innovation.
Mission and vision statements sometimes get a bad rap these days by people who consider them “fluff” that has little value. But if you understand why they are important you can craft statements that empower your employees to be innovative.
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