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Expert
Insight: Mission Statements Do Make a Monetary Difference
TEC News
Online
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:
- Teamwork
- Integrity
- Respect
- Service
- Excellence
In
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
citizenship
These
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 TEC 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.
Glaser’s
advice:
- 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.”
TEC 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.
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