Viewpoint -- Mission Possible

Ask a first-year MBA class the No. 1 purpose of any business organization, and the answer comes back instantly: to make a profit. There's little doubt or debate. But saying business is all about profit is kind of like saying that life is only about survival, or -- to mix metaphors -- a baseball game is only about the final score. Of course there are times when business is about survival. Desperate times when a small company struggles to generate enough cash flow to make payroll and pay the electric bill. Or, on a larger scale, when a bankrupt airline like U.S. Airways or a retailer like Kmart Corp. dodges creditors as it struggles to reinvent itself and shed an outmoded business model. And the final score indeed matters. At the end of the quarter and the end of the year, a business has to demonstrate that its strategy is a winning one. Earnings matter to Wall Street. They matter to employees because they promise job security and career opportunity, and they matter to communities where a company's financial success supports the local tax and job base. But despite this coincidence of interest, profit alone isn't a very good motivator. If it were, then companies wouldn't need mission statements, those noble declarations of corporate purpose that -- at their best -- strive to provide that deeper sense of purpose we all crave. "Mission provides an orientation, not a checklist of accomplishments. It defines a direction, not a destination. It tells the members of an organization why they are working together, how they intend to contribute to the world," writes Peter M. Senge, well-known author of "The Fifth Discipline" (1990, Doubleday, Currency) in an essay on the subject. The problem with many mission statements is that they are only that, nice words that employees wear around their necks on laminated cards but which really don't mean much. Enron Corp., for example, had an admirable statement of values, which included, "We treat others as we would like to be treated ourselves." And, "We work with customers and prospects openly, honestly and sincerely." The average employee might have taken these values to heart, but they obviously meant little to the company's corporate officers. There's a big difference between having a mission statement and being mission-based. As Senge notes, in a mission-based organization, key decisions refer back to the mission, and people feel free to object to management edicts that do not connect to that mission. The power in such an organization resides not in the few positions of authority at the top of the corporate hierarchy but in the organization's "guiding ideas." The founder of Daimaru Inc. -- one of Japan's oldest department stores, which has survived almost three centuries -- put it simply, "Service before profit." Taken from Xun Zi, a third century Confucian philosopher, Daimaru's policy says what many corporate declarations of purpose struggle so earnestly to express: that by putting the customer first, profits will almost inevitably follow. So how does a mission-based organization balance its core values with the need to make profit? It's a well-worn clich, but like so many critical business strategies, it comes down to people and how people are recognized and rewarded. Randall Tobias, former chairman, president and CEO of pharmaceutical giant Eli Lilly & Co., explains how he evaluated future leaders in his upcoming book, "Put the Moose on the Table" (2003, Indiana University Press). Tobias plotted managers' performance on a classic 2-by-2 matrix, with quantitative achievement (delivery of financial objectives) on the vertical axis and softer proficiencies on the horizontal axis. The latter included such factors as fostering a learning environment, inspiring confidence and trust, and communicating effectively. Managers who were effective at getting results in accordance with the company's values, who didn't "use people up," would be marked in the upper right quadrant. As you might expect, it was those individuals who Tobias singled out for senior leadership positions at Lilly. As a company that has not only survived but thrived, that's been a pretty good way to keep score. David Drickhamer, IndustryWeek editorial research director, recently went back to school in pursuit of his core purpose.