Definition and structure
A vision statement is a company's road map, indicating both what the company wants to become and guiding transformational initiatives by setting a defined direction for the company's growth. Vision statements undergo minimal revisions during the life of a business, unlike operational goals which may be updated from year-to-year. Vision statements can range in length from short sentences to multiple pages. Vision statements are also formally written and referenced in company documents rather than, for example, general principles informally articulated by senior management.  A vision statement is not limited to business organizations and may also be used by non-profit or governmental entities.
A consensus does not exist on the characteristics of a "good" or "bad" vision statement. Commonly cited traits include:
- concise: able to be easily remembered and repeated
- clear: defines a prime goal
- future-oriented: describes where the company is going rather than the current state
- stable: offers a long-term perspective and is unlikely to be impacted by market or technology changes
- challenging: not something that can be easily met and discarded
- abstract: general enough to encompass all of the organization's interests and strategic direction
- inspiring: motivates employees and is something that employees view as desireable
Mission vs. Vision Statement
Mission statements and vision statements fill different purposes. A mission statement describes an organization's purpose and answers the questions "What business are we in?" and "What is our business for?" A vision statement provides strategic direction and describes what the owner or founder wants the company to achieve in the future.
Vision statements may fill the following functions for a company:
- Serve as foundations for a broader strategic plan
- Motivate existing employees and attract potential employees by clearly categorizing the company's goals and attracting like-minded individuals
- Focus company efforts and facilitate the creation of core competencies by directing the company to only focus on strategic opportunities that advance the company's vision
- Help companies differentiate from competitors. For example, profit is a common business goal, and vision statements typically describe how a company will become profitable rather than list profit directly as the long-term vision
While a consensus does not exist on the value of mission and vision statements, literature supporting the relevance of these documents to companies outweighs those opposed to them. This may be due to, among other reasons, the positive value of the tools in communicating to internal and external stakeholders or retrospective attempts to legitimize the use of these tools.
Creating and implementing vision statements presents challenges to organizations. They can be challenging to write because they must balance being forward-looking and describing an ideal state without becoming so idealistic that the vision is unattainable. Vision statements can be an employee dissatisfier when staff feel the company's vision is filled with business buzzwords unrelated to the company's services or when the vision does not match day-to-day company policy; for example, a vision statement that includes root cause problem solving while managers are rewarded for fixing problems quickly rather than resolving systemic issues. A vision statement may need to be paired with company initiatives to communicate and reinforce the vision, ensure processes align with the vision, and empower and incentivize employees to take actions that support the company vision.
- Lipton, Mark (Summer 1996). "Demystifying the Development of an Organizational Vision" (PDF). Sloan Management Review 37 (4): 83. Retrieved 2015-08-15.
- Ozdem, Guven (2011). "An Analysis of the Mission and Vision Statements on the Strategic Plans of Higher Education Institutions" (PDF). Educational Sciences: Theory and Practice: 1887–1894. Retrieved 2015-08-15.
- Kantabutra, Sooksan; Avery, Gayle (2010). "The power of vision: statements that resonate" (PDF). Journal of Business Strategy 31 (1): 37–45.
- Kofi Darbi, William Phanuel (July 2012). "Of Mission and Vision Statements and Their Potential Impact on Employee Behaviour and Attitudes: The Case of A Public But Profit-Oriented Tertiary Institution" (PDF). International Journal of Business and Social Science 3 (14). Retrieved 2015-08-15.