Beyond Dollars

There’s no question a business needs to turn a profit. That’s how capitalism works—consumers vote with their dollars on the value of a company’s products. If the sum of what consumers will pay is greater than the cost to produce the goods, the company earns a profit. Society has given a “thumbs up” to the business.

Truly great businesses, though, exist to do more than simply earn a profit. They are rooted in a mission and are as much a cause as a for-profit enterprise. At Morningstar, our cause is to help people achieve better investing outcomes. We think we have a noble mission—our work helps people save for retirement, buy their first home, and put their kids through school. While many of our competitors see themselves as software or data vendors, we have an overarching purpose that differentiates us and defines us.

There are many other examples of mission-driven companies. Patagonia strives to create great outdoor clothing while minimizing environmental impact. Facebook’s mission is to make the world more connected. Nike’s is to inspire athletes. These firms make decisions in the context of their mission, not only from a profit and loss perspective.

If a mission is genuine, it creates a strong bond with a company’s customers. They trust the company will do the right thing in creating its products, that it won’t take shortcuts that lessen quality in order to maximize profits. Customers who believe in a company’s mission are more likely to become loyal and enthusiastic supporters. The company-customer relationship becomes larger than an exchange of dollars for product.

The mission is also something company employees rally around. People want to work for more than a paycheck. Yes, they want the opportunity to grow, develop, and be fairly paid. But they also want to contribute to a meaningful cause. As a result, employee engagement and job satisfaction rise.

But the mission needs to be authentic—a company’s actions must be in keeping with the mission. That’s the really hard part. Customers or employees will quickly surface any missteps. When they do, the company loses credibility and is actually worse off by having a mission and not following it.

Every day, managers make many decisions—and it’s not always a black-and-white call about what’s on mission and what’s not. Managers must be open to listening to dissenting views about whether their decisions are in line with the company’s mission. That’s not easy for some managers who prefer to forge ahead with their pet projects.

A company’s mission is at the core of a company’s brand and identity. It’s the single most important thing to get right in growing a business. It provides a compass for making decisions and clarity to your customers and employees about why you exist. If you can articulate it in simple terms and have the discipline to follow it, you’ll be well on your way to growing your business.

Photo: ILYA AKINSHIN / Shutterstock

Sara Wallon

Sr Director, Global HSE Compliance Performance

9y

A compass for making decisions...I like that.

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Well said, Joe. And as a former colleague, thanks for always walking the walk.

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Mohamed Zumry

Full stack | iOS | Android | Flutter | Swift | Kotlin | Dart | Firebase

9y

Specially IT/Software guys have to be very careful ..... 1) Use your bicycle every day . 2) Use the gym next to your door . 3) Beach is free for marathon. 4) Give some pretty penny to Fruit shop salesman . (to keep some fresh fruits.) 5) Stop consuming Kilo-Bytes of chalories . cheers..

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Sounds like more influencing and marketing. While this is an admirable sentiment, it does not reflect the real market economics which drive both trade "business" and government "politics". Both rely 100% on the quality and type of participation of the consumer/citizen. Consumers must "demand" products and services by translating their "needs", what they feel is valueable, into choices. These choices, driven by necessity, research and/or impulse (need, ration and/or emotion), are the consumers "vote" so to speak. By purchasing a product or service, the consumer trades owned value (money he/she has received for services, i.e. work and value delivered and paid for) for something else, product or service. The "price" the consumer is willing to pay depends on the "value" they perceive the product or service to have, it's ROI, or return on investment. A consumers' ROI is measured by "satisfaction", a company's by profit margin. Two very different measures. Especially since "satisfaction" is highly subjective and impossible to measure in a highly differentiated society such as todays, while "profit" is perceived as a "rational", equal measure applicable to all. Influencing what consumers find important and are therefore willing to make that trade of their "owned" value for the product or service drives the economy. Businesses are hgighly aware of this. The marketing spend is often a huge % of the costs a company spends it's own owned value, money, on. Consumers have the theoretical power to change our economy by changing their purchasing behaviour but like voters, choose to let themselves and their buying decisions be driven by other, personal values which allow them to ignore the negative value aspects of their purchasing decision. A poor mother buying shoes for her child doesn't care if they are made by slave labor on Mars, she cares more for her childs feet and needs to buy the most shoe for what she can afford (her income being the measure of how important society values her). And humans tend to rely on their gut feelings for most purchases, disregarding the product or services real impact. Only for large expenditures do we even try to calculate what we really need and which product/service meets that need and at what price we are willing to pay. So TRUST becomes critical to the buying process. It's instinctive and "easy" and you someone to blame. The commercial variant of TRUST is BRAND loyalty, allowing people to "join" in what they perceive is a valueable lifestyle, at the cost of personal choice BUT also of accountability. Popular consciousness must be transformed by information transparancy and education and made real by "mass" action. Informed, rational, altruistic purchasing, and voting, decisions colored by personal values but not driven by them 100%. Consumers must do the work to change the economy, not rely on governments and businesses to define what that is for them!

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Onaefe Edebi

Software Architect (C#/ASP.NET, Python, NodeJS, Java)

10y

Nice post Joe. While companies need to make profit to stay afloat, it's also very necessary that they have a mission that is beyond dollars; a mission that they abide by, whether in times of loss, profit or break-even. I'm certainly tweeting this.

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