The Importance of a Good Mission Statement

If your CU closed today, would your members miss it?

June 3, 2010

If your credit union closed today would your members miss it?

I'm not asking whether your members would be inconvenienced. Any company that ceases to exist, regardless of its size or success, will create some amount of inconvenience for its customers.

I'm talking about being truly missed, like good friends are missed when they die or move away.

Think back about 20 years ago when Coca-Cola stopped making its original formula and started making "New" Coke. There were almost riots in the street over this.

People called the Coca-Cola Co. and literally threatened litigation if the company didn't bring back the old tried-and-true formula. Coke, to its devoted patrons, isn't just one of many types of cola from which to choose. Coke is it to these people. Other colas won't suffice.

Do your members feel the same way about your credit union? Or is it just one of many credit unions from which to choose?

The distinctive difference

What makes a company distinctive is its sense of mission or purpose. Distinctive companies know why people come to them rather than other businesses. And what's more, the customers using their products and services also have a good sense of the company's mission. It's what keeps them coming back.

More importantly, these companies also live their mission. They know talk is cheap and that most people, including employees and customers, will quickly see through empty talk. They know that their mission needs to live and breathe throughout all that the company does: how they make and sell their product, who they hire and fire, how they train and reward, and so on.

What's a mission statement?

A mission statement, at its most basic level, is a declaration of what the company is all about, why it's there, and, perhaps most importantly, how it's distinctive from other "similar" companies. A mission statement is the company's identity. It's what sets the company apart from "the rest." 

A mission statement also is a company's Constitution. It functions as a litmus test for all decisions the company makes. For example, let's say that part of a company's mission statement is "to produce the best all-natural ice cream using the highest-quality ingredients money can buy." Now suppose someone suggests using cheap, low-quality ingredients when making the ice cream to increase margins. A mission-oriented company would immediately discard that suggestion.

In short, a mission statement should be that basic, fundamental element about a company's existence. Strategies might change and markets may shift, but the overall mission stays the same.

How do mission, strategies, and goals differ?

As stated previously, an organization's mission is its ultimate reason for existence. On the other hand, strategies are the means to accomplish the mission while goals are the means (or targets) to achieve the strategies. 

Furthermore, mission is long-term in nature, while strategies and goals are short-term (one to three years). In fact, a mission can help ensure that achieving short-term goals doesn't create long-term problems.

For example, a mission-oriented credit union won't set its return on asset goals so high for a given year that it forgoes prudent expenditures and investments that provide long-term benefits for members.

Why have a mission statement?

What's most important is to have a mission that runs throughout the organization at all levels. The mission statement, on the other hand, simply encapsulates in words what the mission is. A mission statement can aid a company in many areas, such as: 

  • Developing and implementing strategies;
  • Determining short- and long-term goals;
  • Deciding what products and services to offer (or not offer);
  • Making hiring decisions; and
  • Conducting performance appraisals.

A mission statement also provides much of the inspiration and drive behind accomplishing an organization's goals and strategies. In other words, it provides the fire to get the engine working.

How to structure a mission statement

One effective structure for a mission statement is to split it into two parts, examining "what" and "how." 

The "what" section is a one- or two-sentence statement describing the product or service the company provides (i.e., the end result). This section should also note the quality of that product or service, and what sets it apart from competitors' offerings.

The "how" section briefly describes the operational principals the company will use to achieve the end result described in part one. This is more important than many people suppose.

In fact, most mission statements stop after the first part is completed. But ends and means are inseparable, and how you achieve your results is deeply connected with the quality of the results you achieve.

An example of this type of mission statement:

"ABC Credit Union's mission is to help its members achieve their goals and realize their financial potential by providing personalized financial care through uncompromising service; reliable, worry-free stewardship of the financial assets entrusted to us; and focused attention to members' needs.

"The highest standards shall be achieved:

  • By understanding members' specific needs, and offering products and services to meet those needs.
  • By establishing strong, mutually beneficial employment partnerships with only the best talent available at all levels of the organization.
  • By focusing the organization's resources in a way that will build on its strengths.
  • By being a vital part of the community it serves. This, in turn, will be accomplished by building strong alliances with other local businesses and creating enduring affiliations with community charities."

Show, don't tell

There's a rule among fiction writers that applies here: Show, don't tell.

This means that, rather than making a straightforward statement about a character (i.e., "Bob really enjoyed the concert"), it's better to describe the character's actions which will lead the reader to this conclusion (i.e., "Three days after the concert, Bob's voice was still hoarse from the enthusiastic yelling he'd done that night").

This principle applies here in regard to how you express your mission to members. Posting the mission statement on the wall for members to see shouldn't be necessary. Members should be able to see and feel the mission every time they have contact with the credit union.

How many times have you seen the following? You go into a store and see the company's "mission" posted in a conspicuous place: "Our mission is to provide unparalleled customer service."

However, employees mill around aimlessly or talk with each other, and make no attempt to help the customers. In such situations, the "mission statement" is almost a slap in the face to the customer.

The written mission statement is really for internal use, to ensure employees are on the same page, working toward the same end. The mission is then communicated to members in the way you operate your business.

How do you know when a mission statement is effective?

One of the most important questions to ask is whether the mission statement is inspiring. Does it indicate "job" and "task?" Or does it say "cause" and "purpose?" Does it get the company's employees excited about what they do and pump them up to do more of it? Does it show the meaning of the work being done and the benefits it can provide employees beyond a paycheck? 

A famous story illustrates this point. In 1666, St. Paul's Cathedral was being rebuilt after the great fire of London in that year. Sir Christopher Wren, the architect, visited the site and asked some brick layers what they were doing. One said he was working eight hours a day to earn a livelihood by taking the bricks from one place and cementing them in another. When Wren asked another brick layer what he was doing, the laborer said proudly that he was building a great cathedral. Is your mission like the first brick layer's or the second?

Another good test of a mission statement is to apply it to another similar credit union in your market (especially a sub-par one) and see if it still holds true. If it does, the mission is probably weak and ineffectual.

For example, the mission statement of a local medical clinic that says, "To provide health-care solutions for the community we serve," doesn't say much since it could apply to any medical clinic, even a poorly run one.

Contrast it with a mission statement like this: "To provide high-quality medical care in an environment of exceptional attention, understanding, and humanity."

Of course, in the final analysis, a good mission statement is only one that's lived. If it is too vapid and bland, no one will care about it and no one will live it. And if it's too complex and high-minded, few people will feel they can be a part of it.

Furthermore, actions speak louder than words. If the organization's actions (internally and externally) aren't consistent with the words of the mission statement, the mission statement is pointless. In fact, in such a situation it would probably be better to not have a mission statement at all.

Dan Garrison is chief financial officer for Astera Credit Union, Lansing, Mich. Contact him at 517-321-5135.