This post originally appeared on the Forbes Finance Council
Does your company have a mission statement? Chevron has one. So does Kraft, makers of delicious American singles for your burgers and grilled cheese sandwiches. Tesla, predictably, has a pretty solid mission statement. But we all know what Kraft and Tesla make. Chevron’s line of business is no secret to anyone who’s ever driven a car or been on a road in the U.S. So why does it seem like every company, no matter how obvious their “mission” is, has a carefully worded mission statement?
Now more than ever, people want to do meaningful work. But we live in a capitalistic society that demands growth, profits, and shareholder returns. And capitalism doesn’t particularly care if you’re fulfilled at the end of the day. Mission statements serve as a middle ground between these realities. They leverage peoples’ desire to make the world a better place and translate that into corporate gains.
However, some mission statements are more authentic than others. Businesses are increasingly leading the charge when it comes to social change, and many companies have mission statements that are far more than a creative spin on “Sell a lot of the thing we make.” But they’re still for-profit businesses that are on the hook for (you guessed it) growth, profits, and shareholder returns. So is there a way for companies to reconcile the tension between their stated missions and the demands of capitalism? The hard truth is: Some aren’t really trying in the first place. But many are trying, and failing. And I think I know why.
As human beings, we have a flaw that hinders us from pursuing long-term goals: We’re fundamentally motivated by rewards, and we naturally value rewards now over rewards in the future. This tendency, known as temporal discounting, causes us optimize for short-term goals, because they produce rewards quickly. This is a problem for mission-driven companies, because missions are a long-term game.
Early on, you can hire people who care about your mission and trust those employees to prioritize the mission over their perfectly human reward-seeking behavior. People can only fight against their natural inclinations for so long. So after two years of slogging through mission-driven startup life, those people who prioritized the mission so effectively are going to need a win. So they’re going to refocus on short-term activities to maximize growth for the business — even if those activities are in direct opposition to your mission.
So how do you get humans who are wired for short-term rewards to optimize for the long term instead? You have to ensure that the way your business makes money — its short-term rewards — is not in conflict with your mission.
This company’s mission is to even the playing field for creating a better life. The majority of Americans are living paycheck to paycheck, unable to save. Because they don’t have money in the bank, they often need urgent cash infusions when “life happens.”
Our product offers tools to help people make progress financially, by paying down debt and saving toward their goals. We also offer a feature that lets people get paid on demand. We’re careful with this one, though; we recognized early on that if we made money when people use on-demand pay, that would lead us to optimize for people taking their pay on demand as much as possible. That would mean our short-term rewards would be in direct conflict with our mission. Because if people are only using on-demand pay, that means they’re consistently in a state of not having enough money — which means they aren’t making progress. We knew we needed to find a way to make money as a result of helping people make progress.
To do this, we developed our product to offer ways of making progress by saving money, paying off debt, and avoiding overspending — tactics defined by the Financial Health Network as being fundamental to financial wellness. We also built our revenue model around a flat monthly subscription instead of per-use fees. In fact, the on-demand pay feature is a loss leader for us, meaning we’re directly incentivized to keep people subscribed but using that tool as infrequently as possible.
But developing and sticking to a meaningful mission doesn’t apply to only aggressively mission-driven companies. Optimizing your business to stay in line with your mission serves a practical, profit-enhancing purpose, too.
Look at Apple: Its Jobs-era mission statement was, “To make a contribution to the world by making tools for the mind that advance humankind.” That’s a pretty long-term mission, if you ask me. And Apple didn’t have success in spite of its mission — it was successful because of it. In service of its mission, Apple found a thousand ways to become obsessed with quality, improving peoples’ lives and making product decisions that both achieved its goal and added up to a very valuable and successful company.
Gusto is another example of a financial services company operating in the spirit of its mission: “We’re making work meaningful for everyone, everywhere.” The company’s values are clearly outlined for the world to see, from “Be transparent” to “Do what’s right.” Perhaps most important is their value of “Don’t optimize for the short term.” Assuming they have integrated this into every part of their company, this value will naturally work against the worst of short-term impulses: maximizing profits by compromising on the mission.
The Apple and Gusto examples show that beyond giving you the good feelings of having a positive impact on the world, having an ambitious mission forces you to take a long-term approach to doing business. If you’re intentional about defining your long-term goal and equally intentional when it comes to aligning your short-term rewards with that goal, you can build a more valuable company.
*We’re hiring. Our mission is to even the playing field for a better life. If you’d like to join us, check out our open roles.*
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