Missional Alignment & Social Impact

Week #27

Hello! I’m Aaron Kardell. In this Sunday newsletter, I pick one random topic weekly to go deep on and have some disparate quick hits at the end.

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Missional alignment and social impact are not just ethical considerations for businesses but also strategic tools for long-term success. They can be critical in maintaining motivation among founders and employees, ensuring customer loyalty, and ultimately, achieving sustainable growth. Businesses will be most successful when they prioritize these elements from the outset, rather than treating them as optional or secondary concerns.

When advising new startup founders, one of the most critical pieces of advice I offer is the importance of pursuing a venture that aligns with their personal values and interests. Most businesses don't become overnight successes, and many never get acquired. Nearly all founders encounter significant setbacks along their journey. During these challenging times, staying motivated is easier when you're tackling a problem that personally resonates with you.

I have a friend who never wanted to host another live webinar and founded eWebinar to help solve that problem for others. The top metric in every eWebinar customer’s dashboard is the hours you would have spent doing webinars if you hadn’t automated them. Building this business is hard. But she has a personal connection to the company’s mission, making it easier to keep going.

I have another friend who is passionate about the fine art of Japanese knives. His business, Vivront, allows him to explore that passion by selling knives, sharpening services, and educating others. He’s also connected the company to a broader social impact. Every knife sharpening order also helps pay down school lunch debt for others. This relates to his own story and is a cause he’s committed to tackling.

While missional alignment is a key part of founder-market fit, it is also essential for employee engagement and customer loyalty as well.

As one example, customers know what to expect from Disney. Its mission statement is: “To entertain, inform and inspire people around the globe through the power of unparalleled storytelling.”

Meanwhile, only 1 in 4 employees believe in their company’s values, and many businesses are having a more challenging time recruiting and retaining employees than ever. Mission-driven workers are 54 percent more likely to stay for five years at a company and 30 percent more likely to grow into high performers than those who arrive at work with only their paycheck as the motivator.

Sometimes the primary work of a company is enough to attract a specific set of employees. For example, I would assume a majority of SpaceX employees are motivated by its mission: “To revolutionize space technology, with the ultimate goal of enabling people to live on other planets.”

But an average SaaS or consumer goods company may need something more than the product being produced to engage its workforce. An increasing number of companies are using their mission statement to also commit to a broader social impact. This can be powerful for all stakeholders when it is a core part of the company’s DNA and not just lip service.

Social impact can be defined in a lot of different ways. Some examples include:

• Favorable treatment of your employees or suppliers.

• A commitment to sustainability.

• Giving back a percentage of revenue or profits to a worthy cause.

I’ve been curious about what impact-related messaging most effectively resonates with employees and customers.

The brands that do this best have a tie back to the core product in some way. For example, most people who buy a pair of Toms shoes, Bombas socks, or Warby Parker glasses know that every purchase also results in a pair being given away to someone in need.

Other popular social impact brands include Patagonia and Ben & Jerry’s. In each case, these businesses’ founders are well known for their social causes and a desire to make a broader impact.

And yet, none of these five brands would be successful if a social cause was the only thing associated with the brand.

I find Warby Parker and Patagonia’s mission statements impactful because they connect to a broader impact that they want to drive without overlooking a focus on a critical value prop to the consumer.

• Warby Parker’s mission statement is: “Offer designer eyewear at a revolutionary price, while leading the way for socially-conscious businesses.”

• Patagonia’s mission statement is: “Build the best product, cause no unnecessary harm, use business to inspire, and implement solutions to the environmental crisis.”

When I was recently looking for new sunglasses, I considered Warby Parker first. My primary reason? I knew they had low prices. Similarly, Patagonia’s quality and success in building great products and the corresponding financial success that brings afford them the opportunity to have a greater impact.

Ben & Jerry’s take on its mission is particularly interesting:

Central to the Mission of Ben & Jerry's is the belief that all three parts of its mission must thrive equally in a manner that commands deep respect for individuals inside and outside the Company and supports the communities of which they are a part.

Our Product Mission drives us to make fantastic ice cream—for its own sake.

Our Economic Mission asks us to manage our Company for sustainable financial growth.

Our Social Mission compels us to use our Company in innovative ways to make the world a better place.

(emphasis added my own)

I really like this. It acknowledges that most consumers pick Ben & Jerry’s for their fun and unique flavors of fantastic ice cream, not their social activism. It doesn’t shy away from wanting “profitable growth, increasing value for our stakeholders, and expanding opportunities for development and career growth for our employees.” And it shows unabashed commitment to eliminating injustice as expressed in the form of 10 movements they support.

Our family has made multiple purchases from Bombas and Cotopaxi in the past year. Both brands have a solid commitment to social impact. And yet, in both cases, it wasn’t their social impact commitment that drove us to make a first purchase. It was the endorsement of people we trust in our network about the quality of the products they produce.

So if you believe, as I do, that a brand’s social impact commitments aren’t that likely to drive first purchasing decisions, why bother? Several studies clearly link a business’s commitment to social impact and positive financial results. This is because social impact initiatives can help companies to improve their reputation, attract and retain top talent, and drive loyalty over the long haul with their customers.

While I’m advocating for businesses to strive to find ways to have a broader social impact and to integrate that into their mission, it’s not for everyone. It can be far worse to pay lip service to a social cause in a way that is obviously disingenuous than it is to just stay silent. Various brands have often missed the mark. As one stark example, Pepsi’s 2017 ad starring Kendall Jenner was universally seen as trivializing the Black Lives Matter movement.

Given all this, what are some key takeaways?

If you’re founding a business, focus on founder missional alignment first. You have to care about the problem your business is solving, or you’re more likely to want to give up when times are tough. Once that is dialed in, consider how to drive missional alignment with your employees and customers. One way to do that is through aligned social impact. A social impact focus will only be successful if it’s a core part of the company’s DNA. It will inevitably fall flat if it feels like an add-on later.

If you’re operating an established business, now might be the time to take a fresh look at your mission statement. It is best to do so not as a reactionary measure to employee concerns or as a gimmick to attract new customers. Instead, consider it an opportunity to ensure alignment across your stakeholders and inspire a better future. Done right, this should also lead to better financial results.

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This Week’s Quick Hits

• Have you played with Google Bard yet? Unlike ChatGPT, Google Bard can also mix in inputs by searching the web. It’s good to have side-by-side with ChatGPT to test what kind of outputs you get. What both tools continue to lack, though, is the ability to readily cite sources with hyperlinks or to indicate a confidence level in its response. You simply don’t know when they’re hallucinating.

Photo by Edz Norton on Unsplash