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We kick off our series of B2B tips with a advice for both experienced and aspiring organizational leaders. CEOs hold a variety of responsibilities which differ depending on the business type, size, mission, and more. When it comes to leading and managing a successful business, what better place to start than with the Chief Executive Officer? After all, the buck stops there.
This year AIS, an independently operated and wholly-owned subsidiary of Mercury Casualty Company, celebrates 50 years of business in the insurance industry. AIS’s CEO, Mark Ribisi, offers this piece of advice for finding a company’s purpose.
Why Clearly Stating Your Company’s Purpose to all Stakeholders Is Important to Being a Successful Business
By Mark Ribisi
Let’s focus on the core organization labels. What do they mean and why are these labels important in describing organizational direction?
Vision articulates the “preferred future” written in the present tense with enough detail to paint a clear picture. It also provides a framework for the future with enough specificity to identify the strategic gaps that must be addressed to make the vision become reality.
A vision statement states what the organization wishes to be like in some years’ time. It’s usually drawn up by senior management, in an effort to take the thinking beyond day-to-day activity in a clear, memorable way. For instance, AIS and Mercury General Company define their vision as a goal: “to be a leading provider for consumers and businesses seeking competitively priced value-driven insurance products that deliver peace of mind.”
Mission is defined as the central purpose of the company’s existence. A Mission statement should be simple enough to be understood by all the stakeholders. It should answer the questions, “Who are we and what should we be?” Mission is the means or method to achieving your vision.
A mission statement states the central purpose of the organization. It describes what we do and the desired outcome for our customers. Its aim is to provide focus for management and staff. Mercury’s mission statement is clear on what we do and our central purpose: “We encourage people to reduce risks and help them put their lives back together after unexpected events.”
Core Values describe the desired culture. They serve as a behavioral compass. Our core values include service excellence; trustworthiness; people; process simplicity and product value. All actions of employees should be centered on these values. If values provide the compass, principles give employees a set of directions.
Organizational culture is a dynamic system of shared values, principles, philosophies, expectations, experiences, behaviors and norms. Organization culture defines what is important to an organization. It influences decision making, methods of communication, structure, priorities, formality and execution.
So how does purpose differ from all the above, which emphasizes how the organization should view and conduct itself?
Purpose should be the driver behind all you do – as an individual, employee or organization. Your greater “why” and reason for being which goes beyond being the largest or best or offering the greatest service. It is about making a difference for the customers you serve.
For other examples of purpose, look at Amazon (“To be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.”), Starbucks (“To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time”) and Allstate (“We help customers realize their hopes and dreams by providing the best products and services to protect them from life’s uncertainties and prepare them for the future”).
If you’re creating a purpose statement, it should inspire your staff to do good work for you, find a way to express the organization’s impact on the lives of customers, clients, students, patients — whomever you’re trying to serve. Make all stakeholders feel it.
“It is about making a difference for the customers you serve.”
See our tips on Business Finance from our CFO, Chris Bremer.