Beyond Dollars""""""

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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 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 way to growing your business.

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