Don Hofstrand                                                          Written, January 2006 Co-Director, AgMRC Iowa State University dhof@iastate.edu

A mission statement is a guiding light for a business and the individuals who run the business.  It is usually made up of three parts; a vision, a mission and core values.  Each of these three elements is an important aspect of the businesses guiding light.

Mission Statement Elements

Below are definitions of the three statement elements.  An example of the statements for a value-added business is included for clarification.  Ag Ventures Alliance (AgVA) is a company that starts value-added businesses.  Because of its unique nature, it is important that AgVA create a meaningful mission statement to convey its purpose to it leaders, staff and members.  The AgVA statements are provided in italic.

Vision
A vision statement is a mental picture of what you want to accomplish or achieve.  For example, you may want to develop a profitable winery or a successful organic dairy business.

• Provide economically sound business opportunities for our members.
• Practice high ethical business standards.
• Respect and protect the environment.
• Produce high quality products that are safe for consumers.
• Meet the changing needs and desires of consumers.

Characteristics of Good Mission Statements

To create a successful mission statement, you should keep the following concepts in mind.

Simple
Your mission statement should be simple.  However, that does not mean that creating the statement is easy.  It may be very difficult to develop and require several drafts.  The statement needs to capture the very essence of what your business or organization will achieve and how you will achieve it.

The statement should be short and concise.  The fewer words the better.  Use just enough words to capture the essence.  Most mission statements are too long.  People tend to want to add additional information and qualifications to the statement.  Usually these statements just confuse the reader and cloud the essence of your statement.  Each successive draft of your statements should be to simplify and clarify by using as few words as possible.

Your statements of vision and mission should be a single thought that can easily be carried in the mind.  To test the effectiveness of a mission statement in a business, ask its leaders, managers and employees to tell you the vision and mission of their business.  If they cannot instantaneously tell you both, their mission statement is of little use.  The vision and mission guide the everyday activities of every person involved in the business.  So, to be effective, your statements need to short and simple, capturing the essence of what you want to accomplish.

Fluid Process
People agonize over writing mission statements.  Granted, it is usually not a simple or easy process.  However, the statements are not “cast in stone”.  They can be updated and modified later.  So it is often best to do the best job of writing it as you can, use the statement for a period of time, and then revisit it a few months or a year later.  It is often easy to sharpen the statement at that time.  Remember, the reason you are writing the statements is to clarify what you are doing.

Unique Businesses
It is usually more important to write mission statements for unique or non-traditional businesses where the purpose of the business is not generally known.  Mission statements are important for these businesses so that everyone involved in the business understands what the business will accomplish and how it will be accomplished.  In essence this means “keeping everyone on the same page” so they are all “pulling in the same direction”.

The Role of Goals, Objectives

Once you have developed your vision, mission and core values, you can then develop the goals and objectives needed to achieve your vision.

Goals
Goals are general statements of what you want to achieve.  So they need to be integrated with your vision.  They also need to be integrated with your mission of how you are going to achieve your vision.  Examples of company goals are:

A goal should meet the following criteria:

• Suitable: Does it fit with the vision and mission?
• Acceptable: Does it fit with the values of the company and the employees? 
• Understandable: Is it stated simply and easy to understand?
• Flexible: Can it be adapted and changed as needed?

Make sure the goals are focused on the important properties of the business.  Be careful not to set too many goals.  You run the risk of loosing focus.  Also, design your goals so that they don’t contradict and interfere with each other.

Objectives
Objectives are specific, quantifiable, time-sensitive statements of what is going to be achieved and when it will be achieved.  They are milestones along the path of achieving your goals.  A business normally creates both one- and three-year objectives. Examples of company objectives are:

• To earn at least a 20 percent after-tax rate of return on our net investment during the next fiscal year
• To increase market share by ten percent over the next three years.

Objectives should meet the following criteria:

• Measurable: What will happen and when? 
• Suitable: Does it fit as a measurement for achieving the goal
• Feasible: Is it possible to achieve?
• Commitment: Are people committed to achieving the objective?
• Ownership: Were the people responsible for achieving the objective included in the objective-setting process?

Types of Goals and Objectives
Most business goals fall into one of four categories.  A variety of objectives can be constructed to meet the goal in each category.  Examples are given below.  Each of the objectives can be described with a quantifiable outcome to be achieved by a predetermined deadline.

Goals                                                  Corresponding Objectives

Improve Profitability                               Net profit as a percent of sales
                                                           Net profit as percent of investment
                                                           Net profit per share of common stock

Increase Volume                                   Market share
                                                           Percentage growth in sales
                                                           Sales rank in the market
                                                           Production capacity utilization

Provide Stability                                    Variance in annual sales volume
                                                           Variance in seasonal sales volume
                                                           Variance in profitability

Non-monetary 

• Improve company image              Contributions to community activities
• Enhance environment                  Meet specific environmental requirements
• Enhance quality of life                 Increase number of jobs

The Role of Strategies and Action Plans

Strategies are statements of how you are going to achieve your designated goals.  A strategy is a series of actions or activities designed to achieve the goal.  Objectives provide milestones for measuring the success of the strategy in achieving the goals.  Strategies are critical to the success of your business because this is the step where you actually outline a plan for doing something and then do it.  If you don’t carry through on your strategies, your vision, mission, goals and objectives are of no value.

Strategies are usually used for achieving large and/or complex goals because there is often a series of unique steps that must be developed and taken to accomplish the goal.  In smaller businesses or projects with simple goals, we simply refer to strategies as action plans.  Action plans are statements of a few specific actions or activities that are needed to achieve a goal or an objective.

Examples of Goals, Objectives and Strategies/Action Plans

Below are goals, objectives and action plans (strategies) for AgVA.  Note how the action plans accomplish the objectives and the objectives accomplish the goals.  The goals support the fulfillment of the vision and mission.

Goal 1: Build a team of local farmers interested in business development.

Objective: Create a team of ten farmers by February 1.

Action Plan: Identify twenty farm leaders in the area.  List them in order of qualifications with most qualified first.  Contact them in order of listing until ten have accepted.

Goal 2: Recruit experienced and reliable consultants.

Objective: Identify and retain legal, accounting and industry consultants by March 1.

Action Plan: Talk to Prairie Ethanol, Peterson Organics and Valley Bio-Diesel about who their consultants are, select a small group to interview and hire an attorney, an accountant and an industry consultant.

Goal 3: Identify and analyze market opportunities for possible business ventures.

Objective: Conduct market scanning activities to identify three potential market opportunities by June 1.

Action Plan: Contract with an industry consultant (goal 2) to conduct an industry scan.

Goal 4: Build a membership base.

Objective: Have 500 members by August 1.

Action Plan: Conduct 10 membership meetings at specified locations on the following dates in June and July.

Conclusions

Creating the statements described above may seem like a lot of busy-work.  But, if done properly, they can save money and time and increase the odds that your business venture will succeed.  Creating these statements will help you focus on the important aspect of your business.  They will force you to focus on “where you are going” and “how and when you will get there.”  Think of these statements as living documents that are changed as the needs of the business change.  Too often these statements are treated as “iconic relics” to be stored away in a safe place.  If you don’t use them, you have wasted your time.