What is the difference between a vision and a mission statement Why is it important for organizations to create and communicate their vision and mission statements?

A Mission Statement defines the company’s business, its objectives and its approach to reach those objectives. A Vision Statement describes the desired future position of the company. Elements of Mission and Vision Statements are often combined to provide a statement of the company’s purposes, goals and values. However, sometimes the two terms are used interchangeably.

Usage and satisfaction among survey respondents

How Mission and Vision Statements work:

Typically, senior managers will write the company’s overall Mission and Vision Statements. Other managers at different levels may write statements for their particular divisions or business units. The development process requires managers to:

• Clearly identify the corporate culture, values, strategy and view of the future by interviewing employees, suppliers and customers
• Address the commitment the firm has to its key stakeholders, including customers, employees, shareholders and communities
• Ensure that the objectives are measurable, the approach is actionable and the vision is achievable
• Communicate the message in clear, simple and precise language
• Develop buy-in and support throughout the organization

Companies use Mission and Vision Statements to:

Internally

• Guide management’s thinking on strategic issues, especially during times of significant change
• Help define performance standards
• Inspire employees to work more productively by providing focus and common goals
• Guide employee decision making
• Help establish a framework for ethical behavior

Externally

• Enlist external support
• Create closer linkages and better communication with customers, suppliers and alliance partners
• Serve as a public relations tool

Brief

Management Tools & Trends

Five key trends emerged from Bain's survey of 1,268 managers.

Selected references

Abrahams, Jeffrey. The Mission Statement Book: 301 Corporate Mission Statements from America’s Top Companies. Ten Speed Press, 2004.

Collins, Jim, and Jerry I. Porras. “Building Your Company’s Vision.” Harvard Business Review, September/October 1996, pp. 65–77.

Collins, Jim, and Jerry I. Porras. Built to Last: Successful Habits of Visionary Companies. HarperBusiness, 2004.

Jones, Patricia, and Larry Kahaner. Say It and Live It: The 50 Corporate Mission Statements That Hit the Mark. Crown Business, 1995.

Kirkpatrick, Shelley A. Build a Better Vision Statement: Extending Research with Practical Advice. Lexington Books, 2016.

Kotter, John P. “Leading Change: Why Transformation Efforts Fail.” Harvard Business Review, March/April 1995, pp. 59–67.

Kotter, John P., and James L. Heskett. Corporate Culture and Performance. 1992. Reprint. Free Press, 2011.

Nanus, Burt. Visionary Leadership. Jossey-Bass, 1995.

O’Hallaron, Richard, and David O’Hallaron. The Mission Primer: Four Steps to an Effective Mission Statement. Mission Incorporated, 2000.

Raynor, Michael E. “That Vision Thing: Do We Need It?” Long Range Planning, June 1998, pp. 368–376.

Wall, Bob, Mark R. Sobol, and Robert S. Solum. The Mission-Driven Organization. Prima Publishing, 1999.

Regardless of whether you’re running a small one-person operation or a large corporation, having a company mission and vision help to provide employees with a purpose. The mission and vision of an organization are integral to the company’s strategy because they are used to define future goals and operational tactics. While mission and vision are terms that are often interchanged, they actually refer to two separate aspects of the company.

Understanding Mission Statements

The mission statement of the organization outlines the company’s business, its goals and its strategy for reaching those goals. It focuses more on where the company is at the present time and the tactical steps it wants to use to achieve its objectives. The mission statement of a company can be used to shape the culture of the organization.

When establishing a mission statement for your company, outline what it is your business does, who you serve and how you serve them. Those are the three most critical elements of a business’ mission statement. For example, Amazon’s mission statement is, “We strive to offer our customers the lowest possible prices, the best available selection, and the utmost convenience.”

If a small business sells handcrafted baby clothes, for example, its mission statement might be, “We offer new parents beautiful clothes for their babies that are handmade with love.” This includes what the business does, who their audience is and how they serve them. It provides employees with a clear goal.

Understanding Vision Statements

While the mission statement focuses on more tactical aspects of the business, the vision statement looks to the future of the company. The vision statement provides the direction in the which the company wants to go. Together with the mission statement, it helps to create the organizational strategy for the business.

When drafting a vision statement for your business, answer questions about what your hopes and dreams are. What kind of future do you want to see, and how does the company play a part in making that happen? Are you aspiring to make some kind of change, and how will you make it? Amazon’s vision statement is “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online.” It provides a clear direction for employees.

For the small business that makes handcrafted baby clothes, a vision statement might be “to be the first choice for new parents looking to outfit their babies in artisanal handmade clothing that is designed and crafted with the utmost attention to detail.” It shows exactly where the company wants to go in the future and how it intends to attain that status. It also contains their key selling point.

Applying Mission and Vision Statements to Your Organizational Strategy

The mission and vision statements of a company help direct the organizational strategy. Both provide purpose and goals, which are necessary elements of a strategy. They outline the audience for the business, and what that audience finds important. By identifying these elements, the business executives can develop a more step-by-step strategy that helps the company achieve its mission in the short term, and its vision in the long term.

Mission and vision statements help businesses to outline performance standards and metrics based on the goals they want to achieve. They also provide employees with a specific goal to attain, promoting efficiency and productivity.

Mission and vision statements aren’t only necessary for employees and business owners when it comes to the organizational strategy. They also apply to external stakeholders like customers, partners and suppliers. The mission and vision statements can be used as a public-relations tools to attract media attention, engage specific audience segments and develop business partnerships with like-minded companies.

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