Essential Components of a Powerful Corporation Mission Statement
Companies are facing increasing pressure to articulate their corporate purpose beyond profit maximization. A meaningful and effective purpose statement communicates a company's contribution to human, societal, or environmental well-being in a credible, authentic, and inspiring manner. However, many current statements are vague, grandiose, or uninspiring.
To help leaders create better purpose statements, a framework called SABRE has been developed. This framework evaluates five key aspects of a purpose statement: the societal problem the organization seeks to solve, authenticity, believability, relevance, and engagement.
By using the SABRE framework, leaders can assess and build upon their existing purpose statements. For instance, a purpose statement should address a specific human, societal, or environmental issue rather than vaguely referencing problems or only focusing on performance or profit. A strong purpose statement highlights the operational practices that contribute to a broader social benefit, such as Aldi's focus on fairness and efficiency.
Furthermore, a purpose statement must be authentic to build trust with stakeholders such as employees, customers, and investors. An evident mismatch between a purpose statement and an organization's actions may lead to mistrust, disengagement, and turnover, among other negative reactions from stakeholders.
Moreover, purpose statements should be believable and not overly grandiose. Generic aspirations like "improving the world" lack specifics, making it challenging for stakeholders to understand how the organization plans to achieve this goal. Effective statements demonstrate how resources will be used and progress measured.
A strong purpose statement should specify the segments of society or aspects of the environment that the organization aims to influence. If a purpose statement does not mention specific beneficiaries, it becomes overly general and may lack focus and impact.
Finally, a purpose statement should be engaging to inspire employees, customers, and investors. The use of persuasive and memorable language is essential, as is brevity. Tata Steel's statement, "We aspire to be the global steel industry benchmark in value creation and corporate citizenship," is an example of an engaging purpose statement.
By crafting meaningful corporate statements using the SABRE framework, leaders can communicate their organization's values and purpose effectively, setting the foundation for a genuine and impactful sense of purpose.
The following are examples of Indian companies and their purpose statements:
- Tata Group: "To improve the quality of life of the communities we serve, through sustainable business practices."
- Infosys: "To be a globally respected organization that provides best-in-class business solutions, leveraging technology."
- Wipro: "To provide world-class IT solutions and services that enable our clients to achieve their business objectives."
References:Bailey, C., Tilley, C., & Sandoghdar, A. L. (2023). What Makes a Great Corporate Purpose Statement. Harvard Business Review.
(Sources omitted for guidance as they are not directly relevant to the topic)
- Leaders, in building purpose statements, should consider employing the SABRE framework to ensure their statements are authentic, believable, relevant, engaging, and specifically address societal or environmental issues.
- Diversity and inclusion in business can be fostered by crafting purpose statements that genuinely reflect an organization's values, resonate with its stakeholders, and inspire precedents of corporate social responsibility, such as Tata Group's commitment to improving the quality of life in the communities it serves.
