Defining Mission, Purpose, Vision and Values
Advice practices must strive for clarity in their strategic direction to ensure the entire team is aligned, Hoon Kang writes in Advisor Perspectives. And that starts with a clear understanding of the terms that define a business: “core purpose,” “mission,” “vision” and “values,” he writes.
The core purpose of a practice addresses why it’s doing what it’s doing and why it matters, according to Kang, a practice management consultant with Elliott Bay Advisors.
In the words of Hewlett-Packard co-founder David Packard, core purpose is a guiding star that’s forever pursued but never reached, according to Kang. IKEA’s core purpose, for example, is “to create a better everyday life for the many people,” he writes.
Mission, meanwhile, defines what an advice practice does with a view to focusing and motivating the team, according to Kang. For Starbucks, for example, it’s “to inspire and nurture the human spirit — one person, one cup and one neighborhood at a time,” he writes.
That said, Kang feels it’s acceptable to combine core purpose and mission in a single mission statement.
Vision, on the other hand, should not be confused with core purpose, he writes. Vision, a moving target, evolves over time, according to Kang. In defining their firm’s vision, advisors should aim for simplicity and boldness, he writes. Stanford University’s vision, for example, is to “become the Harvard of the West.”
Finally, core values define a company’s principles and act as philosophical guidelines for the firm’s employees in how they perform their work, he writes. Starbucks’ core values, for example, include delivering their best and being held accountable for the results, being performance-driven but “through the lens of humanity,” and challenging the status quo, according to Kang.