The purpose of a corporation is to make money…well, sort of…

For the record, I have spent most of my academic career unraveling the mystery of mission statements – the most popular management tool in the world and yet equally among the most despised. What I have found is that a well crafted, communicated and coordinated mission can make the difference between mind boggling and mediocre performance.

The starting point is in their creation which must answer the question: why do we exist. Easy to ask. Hard to answer. The secret lies in understanding that every organization exists because it is able to attract and retain the loyalty of multiple stakeholders (external and internal)who support the organization through different means: capital, purchases, labour and social licence.

Massively mistreat any one stakeholder upon whom you are significantly dependent as an organization, and you are toast….you will not exist. Plain and simple.

Mission statements however are just words found on a piece of paper or at a lobby entrance. To make them real, they need to be translated (word for word) and communicated (over and over again), though measurable objectives, programs and tactics. And all this needs ultimately to be coordinated in some kind of symphonic-like set of organizational systems and processes because, if not, the mission music will just be a lot of conflicting noise.

Creating a mission driven organization is a lot of hard work for sure….but, the payoff from creating one is definitely there…and not just for the shareholders who get to enjoy excellent returns but also for the customers with outstanding products,for the employees with secure and rewarding careers and for communities who benefit from having the “corporation” as a responsible “resident citizen”.

Corporations must make a profit to exist…but those profits, if they are to be both superior and sustainable, will only happen when all stakeholders, not just the shareholders, benefit/profit from the existence of the corporation. So, corporations must make money/profits to exist but how they make those profits is the key to the corporation’s long term success.

Great mission statements espouse this thinking and brilliant leaders turn the words of their mission into action. My research over the years bears this out.