Growth is hard, but for social impact companies, it may be even harder.
Take any 101-level business class, and you’re likely to hear the common phrase that the purpose of a corporation is to maximize shareholder value. In other words, that the ultimate measure of a company’s success is the extent to which shareholder wealth is enlarged.
It’s an interesting—and arguably, erroneous—idea, but we’ll save that topic for another day.
Nonetheless, compared to companies for which shareholder value is their raison d'etre, social impact companies prize both shareholder and stakeholder benefits, making them fundamentally harder to scale.
Let’s think about that for a minute...
Although social impact entrepreneurs generally all share the belief that impact and profit can go hand-in-hand, the path to getting there can be fraught with decisions and distractions that cause one outcome to suffer at the expense of the other.
Can entrepreneurs avoid such pitfalls? Not always--but keeping your mission and values front and center invariably helps. In running our own companies and in advising dozens of others, here are three things we’ve learned about the importance of mission in company success.
1 - Don’t just have a mission. Own it.
There are missions... and then there are missions.
Spend 10 minutes reading the corporate mission statements of some of the world’s biggest brands, and you’ll see examples that are so generic and full of “corporate speak” that they seem designed for public consumption more than anything else.
For example, the mission of one well-known beverage company is “to refresh the world in mind, body and spirit.” There’s also an apparel retailer striving “to spread the power of optimism.”
It’s hard to take these seriously.
On the other hand, characteristics of a good mission statement are that they have—but transcend—a commercial purpose. In addition, they are:
Short
Specific
Measurable
Easily understood in terms of how work equates to progress
Achievable (containing some sort of “end state”)
A guiding principle against which opportunities and decisions can be evaluated
This last point is perhaps most important.
Every decision a founder makes has the potential to advance, or steer you away from, your mission, but while business models often evolve over time, the goal posts of your mission typically don’t shift all that much.
Defining a good mission—and then treating it as your unchanging business premise—is essential for keeping your eye on the prize.
2 - Define your values early (and live them out).
Founders evaluate potential hires against the hard and soft skills needed to do a job, but while skills are teachable, values and belief systems are not. Although your earliest employees are often “true believers” who fully embrace the company’s values, growth and scale can challenge this.
Because cultural values are shaped in a founder’s image, it’s critical that founders define values early on and personify them so that employees understand them to be more than corporate platitudes hanging from walls.
Inevitably, founders will face very tough decisions that may entail equally tough tradeoffs. Your mission and values will help you make the right moves.
3 - Your “how” is up for debate. Your “why” is not.
Company success is a team sport—but your teammates are more than just employees. Investors, advisors, directors, and coaches play a crucial role in helping steer the ship, and it’s these non-employee groups that are most likely (assuming you choose them wisely) to challenge your thinking and push you outside your comfort zones* (see caveat below)
To be clear, though, everyone—from investors to interns—ought to be skeptical of the tactical and of the day-to-day decisions that move the business forward. Your “how” is up for debate, but your “why” is not, making it essential to surround yourself with people who want to reach the finish line as much as you do.
* Belief in the mission is necessary, but ultimately insufficient, for success. Entrepreneurs must understand that different stages of growth pose different challenges—and require different skill sets to navigate. Among the hardest decisions a founder will face is recognizing when a team member (often a senior executive) is not prepared to carry the company through its next phase of growth.
Conclusion
More so than their profit-chasing counterparts, it’s essential that social impact entrepreneurs get mission, culture, and values right:
Mission is what you do
Culture is how you do it
Values connect everything together
Done correctly, the process of defining these can be time consuming, but done poorly (or not at all) and the results are almost always negative.
Failure happens, and among the growing number of social impact organizations around the world, there are many examples of entrepreneurs who got mission/culture/values but still failed to have the impact they originally envisioned.
On the flip side, though, there are no such companies that had the impact they imagined after getting their mission, culture, and values wrong.