One of the most commonly asked questions I hear when teaching business and management topics is, “What’s the difference between a business’ purpose, vision and mission.”
One of the main reasons these three terms are often misunderstood is due to the fact that many businesses use them interchangeably.
As long as a business is able to get their message across in an effective manner it probably doesn’t really matter precisely which term is used, however there is a distinct difference between purpose, vision and mission and I will be clarifying these terms within this article.
In addition, we will be looking at purpose, vision and mission in relation to social responsibility and considering how social and environmental aspirations can be combined with financial aspirations to create a more ethical and competitive business package.
I write a lot about the ethical, moral and financial benefits of incorporating social responsibility practices into core business operations and where better to start than with the underlying purpose, vision and mission of the business.
I will begin by providing a simple definition for each of these terms and will then provide a more detailed exploration of each in the sub-sections that follow.
The purpose of a business refers to the reason why it exists.
In other words, why was the business created? What ‘purpose’ does it serve?
The purpose of a business should fundamentally underpin everything it does.
This is the reason the business exists and everything the business does should be done to meet its underlying purpose.
If a business’ purpose only aims to address one or two of the three Ps it will be left severely lacking.
Creating a business with the singular purpose of generating as much profit as possible and nothing more will never maximise its full potential in the modern business world.
Similarly, if a business is created simply to address social and environmental needs without fully incorporating financial aspects of business its existence will be short-lived.
It is highly relevant here to reflect on the principles of Conscious Capitalism, particularly that of having a ‘higher purpose’.
John Mackey, one of the co-founders of the Conscious Capitalism concept suggests that businesses need to have a ‘higher purpose’ as by knowing exactly what it is they want to achieve and pursue a business will be able to inspire, engage and energise their stakeholders more effectively.
The vision refers to where the business is heading.
It is where the business sees itself in 5-10 years time.
The long term aim of the business must be clearly defined in order to provide clarity and direction.
If a business has no clear vision it will find itself aimlessly drift along, year to year, without ever making any meaningful progress.
But with a clearly defined vision of the future a business will have a path to follow and an end goal to aspire to.
The vision should be both achievable and challenging to ensure the business has a realistic chance of reaching it whilst also ensuring the business pushes and stretches itself in order to get there.
Again the key themes of social responsibility need to be incorporated into the vision of the business as it will contribute positively to ethical and commercial advantages.
Incorporating social responsibility themes into the business vision will ensure that social responsibility is at the heart of all core business operations.
If a business aims to do great things, it will have to do great things, all the time, every day.
This is why a socially responsible vision is crucial for ensuring consistent ethical business practices.
The mission is concerned with how the business aims to achieve its vision.
While the vision could be considered as more outward looking the mission looks inward at the business and determines exactly what it will do to make the vision a reality.
Mission statements can vary greatly but often include reference to quality, target customers and geographical range.
Whatever social responsibility practices a business plans to implement it is essential that they incorporate them into their core business operations.
Social responsibility should not be an add-on or a distinctly separate project or scheme.
Although this will obviously still generate value for the recipients the potential value could be greatly enhanced if social responsibility is embedded into the day to day running of the business.
If social responsibility themes around profit, people and planet underpin the purpose and vision of the business it will be almost impossible to neglect them when devising the business’ mission.
In other words if the business has aspirations of achieving a socially responsible future it will have to progress its journey in a socially responsible way in order to achieve it.
As mentioned in the introduction to this article, the three terms of purpose, vision and mission often get used interchangeably.
Whilst this is not a major issue it is however good practice for business owners to be able to differentiate between each term.
Also if a business has a very clear understanding of why it exists (purpose), where it is heading (vision) and how it is going to get there (mission) it will have a significantly greater chance of surviving and thriving over the long-term.
And if socially responsible themes are incorporated into the very heart of these decision-making processes the business will ensure it is in a favourable position both ethically and commercially in the future.