Originally found at Barron's, by Matthew Grimes

The term “mission drift” has a bad connotation: It is often used to describe a confusing or inauthentic shift from a firm’s initial focus, or to accuse a company of diverging from its core values.

Mission drift can occur among all types of organizations. For instance, the term has been used pejoratively in connection with lending at microfinance firms whose loans become larger and thus redirected away from the people who might need them most.

Facebook may have been formed with a social mission to make the world more “open and connected,” but deals it has struck with device makers—Samsung, Apple, BlackBerry, Amazon.com, Microsoft, and other technology firms—have led to privacy concerns and public criticism.

Big banks caught up in the financial crisis published mission statements that focused on integrity, competence, and building trusting relationships with customers, and yet high-risk behaviors ensued, contributing to the crisis and leading to mistrust about the firms’ authenticity.

The phrase mission drift or even “mission creep” can thus ring alarm bells among investors that a company is veering off course, based on an assumption that new directions will damage or distract an organization.

Yet this is a lazy and often false assumption. Mission drift need not be undesirable from an investor’s perspective. In recent research I conducted with Trenton A. Williams and Eric Yanfei Zhao of the Kelley School of Business at Indiana University and published in the Academy of Management Review, we found that there is both good and bad mission drift. So, mission drift shouldn’t automatically be regarded as a poor organizational outcome that flows from mismanagement.

Continue reading original article at Barron’s.

Learn more about the AOM Scholars and explore their work:

• Matthew Grimes, University of Cambridge
• Trenton A. Williams, Indiana University
• Eric Yanfei Zhao, Indiana University