"If people do not internalize the organization's mission and vision, they will not use them to make day-to-day decisions, and if they do not use them in their daily lives, all the effort will have been in vain."
- Pete Babich
Mission and OKRs: an important intro
We're big fans of OKRs (when done right) and believe that ultimately OKRs should come from an organization's mission (that's why, after all, we've named our OKRs book "OKRs: From Mission to Metrics" [1], which you can read for free on Amazon - and of which this article is an excerpt -). Therefore, we thought it would be important to spend some time properly defining the concept of mission (and a mission statement) and clarifying a very common mistake which is to confuse mission and vision, which is another important part of our OKR framework but that serves a different purpose.
OKRs are a strategy execution tool, that falls in a greater discipline in management that encompasses strategy formulation and strategy execution. Ideally, one shouldn't exist without the other.
Strategy formulation always starts with the company's mission statement. It should explain why the company exists, which is itself an interesting limiting factor that helps an organization figure out the boundaries of its footprint in the world. As we'll see below, mission and vision are two sides of the same coin: whereas the mission describes why the organization exists (in a nutshell, a problem the organization wants to solve,) the vision describes a future world where the mission has been accomplished.
After the mission is considered, the next step is actually formulating the strategy of the company. Strategy is a very tricky term to define - we haven't found a definitive answer we're happy with - but a great way to think about it is as a series of decisions and tradeoffs that will maximize the chances of the company fulfilling its mission and achieving its vision. As we formulate the strategy, we can articulate a series of visions - future states of success - that are to be achieved along the journey. You may have heard, during the last decade, of companies' 2020 Visions. These look different from a mission statement - it's not so qualitative and inspirational, but more detailed and even quantitative where possible. An organization can have a 10-year vision, but also a 5-year vision, a 1-year vision, and even a vision for every quarter (we'll talk about short cycles in a bit.) The important thing to consider about vision statements is that they articulate end states.
The visions and strategy go hand in hand: think about the strategy as the *why* behind the visions. For example, a Mexican company may have a 5-year vision of dominating its national market, a 10-year vision of dominating theNorth American market. In this context, strategy is an explanation of why the company chose to focus on the continent, and not expand to other emerging markets. Finally, there are OKRs, which help an organization articulate the gaps between its current state (let's say, today) and its vision(s). OKRs are all about the critical few gaps that the company must close to get there, articulated as groupings of Objectives and their Key Results.
So to answer the question posed at the title of this chapter, an organization's OKRs come from its mission, its strategy, and its visions/milestones.
Anyway, this is not an article about strategy formulation, nor about the broader discipline of strategy execution. It's about the mission, and as you've probably noted at the start of this chapter, we think a mission has to do with why the organization or company exists. In the next lines, you'll understand how we got there.
Towards a definition of organizational mission
At Qulture.Rocks we read many Silicon Valley pundits talking about mission statements and are amazed by how little clarity and how much confusion there is around what the term really means, why it exists, and how companies can leverage it the most.
Pundits (a general term for whoever thinks they know enough to try to define these terms) rarely agree on what mission is or what great specimens look like. As an example of how confusing it is, let’s look at what Jim Collins, the revered business author, says about the subject.
One of his most referred-to articles on the subject is "Building Your Company’s Vision," which was published in the Harvard Business Review in 1996 and went on to become the core idea behind Good to Great, Collins’ very famous best-seller. In the first line of the article Collins and his co-author Jerry Porras write that “Companies that enjoy enduring success have a core purpose and core values that remain fixed while their strategies and practices endlessly adapt to a changing world.” I hope you can see why I'm citing this as an example of why it's so hard to understand what mission and vision actually mean: in an article that's about vision, Collins has a first-line talking about core purpose, which is something very close to the concept of a mission, and core values. Of course they then try to clarify it a bit, and go on to say “[vision] has two principal parts: core ideology and envisioned future.” But hey, can we be a bit clearer?
To look a bit further, we Googled “how to build company vision.” On the first results page, we stumble upon an article on the Openview Venture Partners - a respected venture capital firm - website, written by portfolio CEO Firas Raouf. In the article, Raouf defines mission as “what a company is striving to be in the long term” and vision as “how it can get there," asking "what things need to be executed to accomplish the mission?” This second excerpt is way worse, of course, and confuses more than only mission and vision, but also strategy and planning, but serves as a great example to further our point. Let's move from pundits to the websites of large tech companies: Google and Amazon.
Google’s mission statement, for example, is “… to organize the world’s information and make it universally accessible and useful.” If we unpack it, there’s a first part that talks about how Google makes an impact on the world (organizing the world’s information and making it easier to retrieve), and a second part that talks about how Google wants the world to look (a world where information is organized and universally accessible and useful). By the way, the website (and the first results page for Google search for "Google vision") has no mention of there being a vision. So it seems that what they call "mission" is actually a mix between a mission and a vision.
In talking about its mission, Amazon says “we aim to be Earth’s most customer-centric company. Our mission is to continually raise the bar of the customer experience by using the internet and technology to help consumers find, discover, and buy anything, and empower businesses and content creators to maximize their success.” Amazon doesn't clearly define what is its actual mission statement, but when talking about it mixes what the company wants to become ("Earth’s most customer-centric company") and why it exists ("to continually raise the bar of the customer experience...").
It seems like these two giants don’t speak - at least to the outside - about their visions. They only talk about their missions. Now, if we read their missions, it’s still very hard to abstract a consistent pattern on what a mission should look like.
Now we go from the tech giants to the “old economy” for reference, and we get even more confused. Koch Industries, for example, defines its vision as: “Koch Industries is a trading, investment, and operating company that aggressively identifies and acquires companies in which it can leverage our strengths to generate superior earnings or market value.” Their mission is “Koch Industries seeks to maximize the present value of future profits. Doing so provides security and opportunity for stockholders and productive employees, while also benefiting customers and society….”
Now, unpacking Koch’s mission and vision is a trip. Their mission basically describes what business the company is in (buying out other companies for cheap, but companies where they have an edge). Their vision, on the other hand, describes what benefit the company wants to bring to its stakeholders (security and opportunity for stockholders and employees, and less explicit benefits to customers and society).
As you have probably inferred, after reading about how pundits, big tech, and the "old economy" talk about mission and vision, it's impossible to deduce what these terms actually mean, and how a company should use them.
A startup-focused definition of mission
If you're feeling more confused than when you started reading this article, that’s exactly how we felt when we tried to understand what an organization's mission (and vision) statement looks like.
After this long journey, which included countless other references, we've settled upon the following definition:
The mission is the company’s purpose. It’s why it exists.
It helps to think, as Jim Collins suggests, “how would the world be negatively impacted if our company ceased to exist?” At Qulture.Rocks, for example, our mission is to “help people and organizations unlock their potential.” Google's mission statement is almost there.
The vision, on the other hand, is how the world will look like if the company fulfills its purpose. Mission and vision statements are two sides of the same coin, and we think that this is a core reason why definitions are so confusing. Anyway, broad vision statements are pretty useless, so we recommend you stick with the vision for the purposes of defining what the organization is and what its boundaries are. More specific and time-bound visions, on the other hand, are very useful as a way to articulate what future end-states look like for the organization, and we'll get into them in a bit.
Company x customer x shareholder-centric missions
Using broad strokes, the company’s mission can be company-centric or customer-centric. Google’s mission (or the part of it that looks like a mission by our definition) is customer-centric. If a customer reads it, she immediately relates the company's impact on her own life. Koch’s mission, on the other hand, is company-centric. It basically talks about how the company makes money in very practical terms.
We believe missions should be as customer-centric as possible, and more abstract in nature. At Qulture.Rocks, for example, we’re not talking about anything other than the impact we were created to have on the world.
Another good guideline is to not mention your line of business in your mission statement. Paraphrasing Simon Sinek, it should be more about the *why*, and less about the *how* of your company’s impact. The how is more about strategy and tactics: how the company chooses, today, to bring that impact to the world. However, that can change if it ceases to be the most efficient way to do it.
For example, we don’t cite software or technology in our mission statement. That’s because we’re about cultures that rock, and not about software. Software is how we choose to pursue our mission, but it can change to another thing (content, consulting, wearables) if we think that would cause more impact.
Back to Google and Amazon
Now that we’ve – hopefully – agreed on the definition of a mission and vision statement, let’s go back to Amazon’s and Google’s mission statements and see how they pass our test.
Again, Google’s mission statement is "to organize the world’s information and make it universally accessible and useful.” It’s kind of a blend between a mission and a vision. The first part looks like a mission: Google exists to organize the world’s information and make it easy to access. However, it gradually blends into a vision, because it gives us a vivid description of what the world will look like if they’re successful: a world where all information is easy to access and useful. We’d give it a 7.
Amazon, on the other hand, has a worse mission statement. As we saw earlier, it reads “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.” That looks much more like a vision statement to us, and quite a company-centric one, for that matter. It describes a future, but in terms of what the company will look like in the future, and not how the world will look.
Notes:
[1] Drawing heavy inspiration from Ali Rowghani from Y Combinator in his "The Second Job of a Startup CEO"
