What is a mission statement?

Why a mission statement is important

Most companies can explain what they do. “We sell software.” “We run restaurants.” “We manufacture components.” But as soon as someone asks a follow-up question, things get blurry. Which customers? Which need? Why you and not someone else?

A mission statement gives the answer. Not the polished one in the annual report, but the honest one that describes how money actually comes in and how value is actually created.

Without a clear mission statement something odd tends to happen. People in the organisation start telling different stories about what the company does. Sales tells customers one thing. Operations believes something else. Management describes a third version in the board meeting. Everyone is right in their own way, but no one has the whole picture.

This creates problems that look like something else. A new employee asks what you actually do and gets three different answers. A potential customer visits your website and doesn’t really understand what you offer. The board wonders why you are losing customers in segment A when you are investing in segment B.

The problem is not communication. The problem is that the mission statement is unclear.

Read more about the core concepts behind mission statement, vision and goals in Explore Business Planning – A Series of Articles on Strategic Success.

A clear mission statement creates alignment on three levels. It makes it possible for everyone in the organisation to tell the same story about what you do. It helps customers understand whether you can solve their problem. And it gives management a solid foundation for making decisions.

When someone proposes a new product, you can ask: does this fit our mission statement? When someone wants to target a new customer segment, you can discuss: are they really our customers? When someone suggests a new delivery model, you can assess: is this how we create value?

The mission statement is not the strategy. It is the basis for the strategy. You can’t decide where to go until you know where you are.

Want to see how a mission statement fits into a complete strategic plan? Read What Does a Strategic Plan Look Like?.

How a mission statement differs from a vision and growth targets

It’s easy to confuse a mission statement with a vision or with growth targets. All three are about the business, but they look in different directions.

The vision looks ahead and describes what happens for customers when you succeed. It is a picture of the future, five to ten years away, showing the customer value you want to create. “Every home has access to clean energy at a reasonable cost” is a vision. It describes a world that does not yet exist.

The mission statement looks at the present and describes what you do right now. Which customers you exist for, which problem you solve and how you deliver. “We deliver solar panel systems to single-family homes in central Sweden, including installation and service” is a mission statement. It describes what actually happens today.

The growth target looks at the next few years and describes which development is most important to take the next step. It is the bridge between the present and the future. “We have established ourselves in apartment buildings and expanded to all of Sweden” is a growth target. It describes the development in between.

The difference becomes even clearer if you look at time horizons. If the vision describes where you are in ten years and the growth target describes where you are in three, the mission statement describes where you are now. Not last week. Not next quarter. Right now.

This also means that the mission statement must be true. The vision can be ambitious. The growth target can be challenging. But the mission statement has to be honest. If you say that you exist for large international groups but 80 percent of your customers are domestic small businesses, the mission statement does not match reality. Every decision you base on it will then be off.

For a deeper comparison between vision and mission statement, see The Difference Between Vision and Mission Statement – Everything You Need to Know.

How a mission statement connects to the rest of the strategy

The mission statement is the foundation of the strategy. Not because it is more important than anything else, but because it describes the starting point. You can’t plan a journey if you don’t know where you are starting from.

The vision shows the destination. The mission statement shows the starting point. The growth targets show the next milestone. The strategic goals show which concrete results are needed to get there. And the conditions show what must be in place for it to work.

When the mission statement is unclear, everything else becomes shaky. If you don’t know which customers you have today, how can you know which customers you want tomorrow? If you don’t know which problem you solve now, how can you know which problem you should solve next? If you don’t know how you deliver value today, how can you know how to develop your delivery?

An example makes this clearer. A consulting company has a vision: “Every organisation can make strategic decisions based on real insight.” It’s long-term and about customer value. Their mission statement is: “We help growth companies in the tech sector structure and analyse their business data through advisory services and tools.” It’s concrete and describes what they do today.

From there, they can formulate a growth target: “We have developed a method that allows companies to start with data-driven management in weeks instead of months.” That is the next step from where they are now towards where they want to be.

If the mission statement had been vague – “we help companies with data” – the growth target would also become vague. Which companies? Help with what? In what way? Then it’s impossible to determine what the next step actually is.

The mission statement also creates clarity inside the organisation. When everyone knows which customers you exist for, it becomes easier for sales to prioritise. When everyone knows which problem you solve, it becomes easier for operations to deliver the right quality. When everyone knows how you deliver, it becomes easier to see what needs to be developed.

This is why you often start with the mission statement when you develop a strategy. Not because it’s the first step in execution, but because it’s the first step in understanding.

If you want a structured model that connects vision, mission statement, growth targets, strategic goals and conditions, see What Are the Different Types of Goals?.

How to formulate a mission statement

A mission statement should be easy to understand and hard to misunderstand. That sounds obvious, but is surprisingly hard to achieve. Most attempts end up either too broad (“we create value for our customers”) or too detailed (“we deliver cloud-based SaaS solutions with API integrations for enterprise customers in the DACH region”).

A good mission statement answers three questions without overcomplicating things. Here’s how.

For a practical workshop format, see Workshop Instructions: Formulate Your Mission Statement.

1. Who do you exist for?

Start by clearly defining your customer group. Not “everyone who needs our services”, but as concretely as possible. Which industry? What size? What situation are they in when they need you?

“Small business owners in construction”, “growth tech companies”, “municipal companies”, “parents who care about sustainability” – the clearer you can be, the easier it becomes to formulate the rest.

When choosing which customer groups to focus on and what ambition level to set, it can help to read What to Consider When Setting Goals – A Guide to Effective Goal Setting.

2. What problem do you solve?

The next step is to describe which problem you solve for the customer. Start from the customer’s perspective, not your internal processes. Is it about saving time, reducing risk, increasing sales, simplifying everyday life or creating security?

Formulate the problem so that the customer could say: “Yes, that’s exactly what we struggle with.” Avoid internal jargon and technical descriptions – stick to the customer’s language.

3. How do you deliver your offering?

Finally, describe how you deliver the value. Is it through digital services, physical products, advisory work, training, subscriptions or projects? This is where it becomes clear what sets you apart from others who solve similar problems.

It’s not about listing every detail, but about showing your main model for delivery. “Digital service with personal support”, “workshops and strategy documents”, “products with installation and service” – a few words go a long way.

For a more comprehensive view of how mission statement, growth targets and strategic goals work together, read How to Create an Effective Business Plan – A Guide for CEOs and Management Teams of SMEs.

Put the pieces together

Once you have your answers to the three questions, put them together into a sentence or two. No more. If it takes a whole paragraph to explain the mission statement, it’s too complicated.

One formula that works well: “We help [customer group] [solve problem] through [delivery model].”

Example: “We help growth companies in the tech sector structure and analyse their business data through advisory services and tools.”

You can also flip it around: “For [customer group] who need [solve problem], we offer [delivery model].”

Example: “For small businesses that need professional accounting without hiring a full-time finance department, we offer a digital service with personal support.”

Both work. Choose the one that feels most natural for your business.

One last thing: test your mission statement on someone outside the organisation. If they immediately understand what you do, it works. If they need explanations, it’s not done yet.

Examples of mission statements

What all these examples have in common is that they answer the three questions: for whom, which problem, how. They are concrete enough for someone to decide whether they are the right customer or not. And they are honest about what actually happens, not what would be nice if it happened.

For more inspiration on how to formulate measurable goals that connect to your mission statement, see 48 Examples of Complete Strategic Goals.

The mission statement is too broad

One common mistake is a mission statement that tries to include everyone. A company writes “we exist for large international groups” when 90 percent of its customers are domestic small businesses. That’s not a mission statement, it’s a wish. The mission statement should describe reality.

Another mistake is being so broad that you don’t exclude anyone. “We exist for everyone who needs our offering” says nothing. A clear mission statement actively excludes. That’s the point. By saying who you exist for, you also say who you don’t exist for.

The mission statement is full of buzzwords

Another trap is filling the mission statement with trendy terms and vague promises. “We enable digital transformation journeys through agile methodologies and cutting-edge technology to drive customer excellence.” It sounds impressive but doesn’t really say who you help, which problem you solve or how you do it.

Ask yourself: would a customer be able to repeat this in their own words and still mean the same thing? If not, it’s probably buzzwords rather than clarity.

The mission statement does not take a stance

A mission statement should describe what you actually do, not take a position in every debate. It does not need to solve all the world’s problems or express every value you hold. It needs to be clear about how you create value for your customers today.

That doesn’t mean values are unimportant. They influence both which customers you choose and how you choose to deliver. But if you mix mission statement, vision, strategy and value words in one sentence, you usually end up with something that is hard to use in everyday decisions.

Keep the mission statement concrete: for whom, which problem, how. Let the vision and values describe the bigger “why”.

For more on how mission statement, vision, growth targets and conditions fit into a broader framework, see What Is Strategy Development? and About Conditions in GoalEnvision.

Does everyone need to know the mission statement?

Yes. Not necessarily word for word, but everyone should be able to explain what you do, for whom and how. If an employee cannot answer these three questions, they don’t really know what the company does. Their work then becomes more random. A clear mission statement allows everyone to make decisions that move in the same direction.

A mission statement describes how the organisation creates value for its customers today. It answers three questions: Who do you exist for? Which problem do you solve? How do you deliver your offering? The mission statement is the foundation of the strategy. Without it, you can’t know where to go, because you don’t know where you are.

With a clear mission statement it becomes easier to make consistent decisions, easier to communicate what you do and easier to develop the business in the right direction. It creates alignment inside the organisation and clarity for customers. And it makes it possible to formulate a meaningful strategy.

When the mission statement is clear and honest, it can become the foundation that holds even when everything else changes. It is not a guarantee of success. But it is a prerequisite for knowing what success means in your organisation.

The next step is often to connect your mission statement to concrete goals and conditions. Read Guide – Effective Ways to Measure and Achieve Strategic Goals and explore Articles on Goal Follow Up and Monitoring.