Purpose, mission and their impact on the VW crisis

Mission tells you what to do for your business, but how can you share it with your employees to avoid business crisis?

 
In response to Pat La Londe ASQ post  Does mission matter? I would like to add that mission matters, and it should start working together with the purpose the new sharing economy.
Every day I work with entrepreneurs and small business that are looking forward to build sustainable businesses.  Even though in some cases companies are so small that hardly have any procedures developed, we always talk about the mission. But it’s not just because we have to “fill in” the bucket. Mission always comes out of business owner’s mouth even unconsciously, so all we have to do is make it crystal clear for everyone else in the company. This is exactly the Achilles tendon in most companies, no matter the size.
One of the first things companies need to work on towards achieving success in the long term is planning, but if their mission is not clearly shared among all the employees, planning and decision making tends to be more difficult to handle. That is because mission describes what business the organization is in (and what it isn’t) both now and projecting into the future. Its aim is “to provide focus for management and staff”. Mission helps to define the objectives that need to be put together to build the business plan.
 

Mission vs purpose

The problem is that usually the mission is not compelling, like “We’re in the business of providing high-standard assistance on performance assessment to middle to senior managers in medium-to-large firms in the finance industry.” It’s usually quite objective. It tells you what to do, but not how, so it just stays written on the wall and nobody cares about it.
On the other hand, more and more companies are starting to focus not only on defining a mission, but also a purpose, which emphasize how the organization should view and conduct itself. This is probably because the new generation of customer and employees care not only about tasks or results, but also about how those make them feel. Having a greater purpose in mind makes people work better, more motivated towards the same objectives. As it happens with the mission, normally business owners already have a purpose defined, but they hardly ever shared it with their employees. Purpose helps to increase commitment and culture. Mission can be shared through plans and to do lists, but purpose needs to be shared through concrete actions and examples.

A recent case study

Volkswagen is a nice business case to analyze in regards to mission and purpose. For sure there is a mission and plans set up from the top, even there is a campaign to “think Blue” looking forward to manage resources as carefully as possible. So how is it possible that they couldn’t avoid the recent chain of tragic events? Its use of hidden software to falsify emission reports from diesel cars has plunged VW into crisis. The company’s shares have collapsed by a third since in a week, it is facing billions of dollars in fines and other financial penalties, lawsuits are around the corner and its reputation is seriously damaged. On top of that the EPA ordered VW to recall around half a million cars in America to fix the software, the cost of insuring VW’s debt has risen, and the company could face a debt and liquidity crisis as per the Economist.

So what do we do?

Probably they missed to share not only their mission but their purpose, so that all the employees (including top directors) would know not only what to do but also how to do it. This story should act as a reminder that thinking of selling and reducing costs is not enough: how to do it in a way that nobody gets hurt should also be part of the game, and here is where purpose and mission should come out together to build a successful company in the long term. Finally, in the sharing economy our purpose need to be shared with everyone. If employees, the community and the environment are important for the top management, they should do something clear about it. That’s how employees and potential customers will in response also care about the company.
 

 

Have your company already defined the mission and the purpose?  Do the employees know about them?
 
 
Luciana Paulise

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