Do Companies Need Vision Statements?

Does It Really Matter? The answer shouldn't surprise you, authors say.

Editor’s Note: CGU prides itself on being a small, close-knit academic community that nurtures strong collaborations between professors and students. Nothing better demonstrates this than the work of Drucker Professor Bernie Jaworski with former student Virginia Cheung. In Cheung’s dissertation topic, which brings together the philosophies of Peter Drucker, Confucius, and the management styles of contemporary companies, Jaworski saw an opportunity for Cheung to publish a book that would help her establish her professional brand in the management field. The following is adapted from that new book.

Why is it so important to specify a company’s vision? Isn’t a mission statement enough? Not exactly. Like any key organizational metric, unless we specify a clear objective—or end-state—we have no way of charting progress on our mission.

Pepsi’s stated mission, for instance, is to “create more smiles with every sip and bite.”However, their vision focuses on something else to achieve this mission: to be the global leader in convenient foods and beverages by winning with a purpose. Here, captured by this seemingly simple statement, is their ambition to win sustainably in the marketplace, accelerate top-line growth, and, at the same time, make a commitment to do good for the planet and communities. The end-state—which is being the global leader—is a very clear articulation of their desire to be number one and, thus, beat out their major competitor, the Coca-Cola Company.

It may seem straightforward, but many business leaders find that developing a vision statement is very challenging. Why? Because it’s often difficult to get the organization to commit to a very specific target goal. It is much easier to make general statements instead: The company, for instance, desires to end poverty or be a “high-performing” organization. These generalized statements are fine, but they do not provide the same level of urgency or motivation that a specific number or target does.

Identifying a specific target by a specific date creates another challenge for the company: It means it must publicly commit to these goals, and making that commitment means risking publicly failing to reach them. As such, the organization can lose face. One final obstacle to crafting a vision statement is the simple fact that the executive leadership team may have very different views of what it means to achieve the company’s mission.

Getting It Right

Collectively, these challenges decrease the chances of creating a clear end-state for the organization. Our remedy is to focus on six key characteristics that are true for some of the best company vision statements.

Articulate a Clear “End-State”

What will the world look like when we are done and have accomplished our goal? The vision statement provides an answer for the company’s workforce.

Some organizations avoid committing to a specific target. Take, for example, SAP, the German multinational enterprise software firm. Their explicit vision is to “help the world run better and improve people’s lives.” Not only is the target end-state imprecise, but it’s also equally unclear what the firm does for a living. Is this an athletic shoe firm? A transportation and logics firm? A health care firm?

Create a Statement in One Concise Sentence

Marriott International manages more than 20 well-known hotel brands, including Marriott, the W Hotel, Westin, Sheraton, Ritz-Carlton, and Le Meridian. Its vision statement is quite simple: to be the World’s Favorite Travel Company.” The term “favorite” is an excellent word choice since it is defined as “preferred before all others of the same kind.” Thus, the company intends to be the top choice among all other competitors in the specific markets it serves. So, for the Ritz Carlton, it means to be the top choice relative to the Four Seasons and the Mandarin Oriental. For Westin, it means to be favored over Hilton. Thus, even though it is somewhat broad, Marriott’s vision statement can be easily translated to the circumstances of each of its divisions.

Use Image-Based Language

Compared to more abstract language, image-based language engages employee emotions and provides a shared point of reference. Being very clear about the desired long-term outcome reflects the idea that the vision is a clear, specific picture of an ideal future. For a watch company, for example, a clear picture could be evoked with a statement such as “a watch on every person’s arm.” It is easy to visualize this statement as compared with some vague appeal to excellent customer service.

Inspire Your Workforce

A great vision—much like a great mission—must inspire, motivate, and energize the company’s workforce. It should make employees proud to be part of the organization. For example, a firm in the transportation sector might focus on a message of being safe and reliable (so that everyone can get home and spend more time with their loved ones). In contrast, another firm working with consumer-packaged goods presents a message of providing the best quality food and still enhancing the planet’s sustainability. Vision statements should be crafted to inspire and drive the workforce to achieve as much as possible.

Give Challenging but Achievable Goals

Vision end-states are often “stretch goals,” which means that they can be achieved if the organization is highly focused, works hard, and is committed to the task at the end. However, these goals are hard to attain and require an unusual level of commitment from everyone.

Be Distinct from Your Competitors

Developing great strategy means developing value propositions that your competitors cannot match. Thus, one should aim for a distinctive vision statement—not one that your competitors could comfortably claim. For instance, Deloitte’s vision to be the standard of excellence, the first choice of the most sought-after clients and talent, is not very distinctive or unique: PWC or KPMG could easily say the exact same thing.

Vision Statements: Some Examples

With those criteria in mind, we discuss some vision statements that are great or could be improved.


Our vision is to create a better everyday life for the many people – for customers, but also for our co-workers and the people who work at our suppliers.”

There are several aspects of global Swedish conglomerate IKEA’s vision statement that are noteworthy.

This statement is challenging but clearly achievable. Since it is about improving the lives of individuals around the world, it is inspirational for the workforce. It is often presented as one sentence “Create a better every day for all people impacted by our business.” One can imagine what a “better every day” can look like for customers—they enjoy their home furnishings, appliances, and accessories. It is distinct from competitors in the furniture business.

The one issue that concerns us is the lack of specification of the end goal. What does the world “look like” when they’ve achieved their goal? Given that they have nearly 800 million store visits globally, one could argue that their vision statement should have a numeric target. Perhaps something like: We aim to improve the lives of over 1 billion people per year.

Habitat for Humanity

“A world where everyone has a decent place to live.”

Habitat for Humanity stacks up well against our six criteria. First, there is an end state that focuses on everyone in the world. The statement is just ten words but sends a powerful message about achieving its mission. One can easily visualize the end outcome: a home for every person.


“Toyota will lead the future mobility society, enriching lives around the world with the safest and most responsible ways of moving people.”

Toyota is one of the largest automobile companies in the world. Sales revenue exceeded $275 billion in 2020. It is frequently on the list of best places to work and most admired companies. It was one of the first firms to move into the hybrid electric vehicle market aggressively.

What we find so interesting in the vision statement is the notion that Toyota will lead the future of a mobile society and find the best and most responsible ways to “move people” around. Notice that they do not say automobile company but instead focus on “moving people.” Indeed, they do not even say transportation company, which suggests a shift away from vehicles to other modes still to be imagined. This vision statement clearly embraces a future orientation—and that’s very challenging. While it is achievable, we also believe that more tangible, focused imagery would bring this statement to life.

Assess Your Organization’s Vision Statement

Like mission and purpose statements, the vision statement should be driven from the top of the organization—with input from all ranks of employees. It should be “tested” with all key stakeholders, particularly key customers and partners.

As you evaluate your organization’s vision statement, remember these questions:

  • Does our vision statement have a clear, specific end-state or goal?
  • Is our vision statement one or two sentences in length?
  • Can our employees and other key stakeholders “visualize” the desired end goal?
  • Is the vision statement challenging – but attainable?
  • Does it inspire key stakeholders – most notably your employees?
  • Finally, is our vision statement different from our competitors’?

Vision statements go hand-in-hand with mission statements. They help rally the organization and energize its workforce to come to work every day and stay focused on turning that exciting end-target into a reality. That is why vision statements are so important and need to be embraced—not avoided.


Bernard Jaworski is Peter F. Drucker Chair in Management and the Liberal Arts in the Drucker School of Management at Claremont Graduate University; Virginia Cheung completed her doctorate in Management last winter at the Drucker School. This chapter is adapted from their book Drucker and Confucianism: Setting the Direction for Your Firm, published in China this fall.