For the last four years, NewCo Festivals have sprung up in innovation hubs all over the world, literally opening the doors of thousands of fast-growing, disruptive companies. Along the way, we’ve observed some common characteristics of these innovative businesses. Foremost is the centrality of purpose. Purpose beyond extraction of profit, or maximization of shareholder value, unlocks many benefits for nimble, fast growing businesses. Purpose helps attract talent, accelerates key partnerships, and fosters truly innovative ideas.
Pop the hood on a NewCo, and you will inevitably find a purpose-fueled engine. These can be as broad as Google’s “Organize the world’s information,” or as precise as Best Bees’ “Expand bee populations.” As my colleague In “Does your Company Know Why It Exists,” John Battelle wrote that a corporate mission should speak to solving a real problem, and ultimately, making the world a better place. A good corporate mission situates a profit generating market opportunity within a nobler cause.
And missions can’t just be slogans. They must inspire engagement in their communities of employees, investors, and customers alike. NewCos walk the talk, and align their operations so as to accomplish their stated mission. When they do, the results are extraordinary.
Here are a few key benefits of a mission-driven organization.
Attract and Motivate Talent
Businesses looking for technical talent know it’s a sellers’ market. Qualified candidates have multiple employment options. NewCos compete for top talent against more established companies by leveraging their higher purpose. Jeff Huber, the CEO of Grail, a healthcare start up seeking to cure cancer, said of his company’s mission: “It attracts the right kind of team. We’re a very mission-driven organization. Everyone knows exactly what we’re doing, and the reason that people get up in the morning excited is because they see and feel the impact of it.” As Huber points out, a NewCo’s mission motivates and retains talent in addition to attracting them in the first place.
Based in Silicon Valley, my former employer Walmart.com must compete for talent with the likes of Google and Facebook. What convinces most people to join is not just the scope of the opportunity, but rather the mission of helping regular people save money so they can live better.
Speeds Up Decision Making
The easy decisions get made in the course of normal operations. But the questions that escalate are inevitably opaque and often polarizing. Basing decisions on financial inputs alone leads to multiple rounds of business modeling, and the models are often built on a foundation of assumptions that can be easily manipulated — which leads to more paralyzing debate. A rubric grounded in a corporate mission provides another filter to make a call.
A good example of how a corporate mission has helped a company make a strategic decision is Amazon Prime. Amazon is famously customer-centric. While many retailers debate the financial benefits of unlimited free shipping, Amazon charged ahead. They prioritized the customer experience over financial risk and have now built a significant first mover advantage.
Lubricates partnerships
A recent Andreessen-Horowitz podcast featuring author Evangelos Simoudis discussed how the focus on maximizing shareholder value prevents businesses from taking a risk in a non-traditional partnership. At a time when companies need to accelerate partnering to keep pace with change, they are hamstrung by rudimentary business development capabilities. Most companies have processes and talent to handle acquisitions or to hire vendors, but they rarely have a well-honed capability for a new type of shared risk partnership. This makes it very hard for an internal champion to get a deal approved. There are many stakeholders on both sides who can raise objections that drag out and kill a proposed partnership.
When both parties have a clear corporate mission, it makes it much easier to understand the other side’s true objective. This helps overcome the Fear Uncertainty and Doubt around taking the leap together. A good example of how corporate mission can lead to productive new partnerships is the Sustainability Consortium. Manufacturers, Retailers, and Environmental Groups all came together to create a multi-stakeholder group to guide standards and best practices to make sustainability improvements in global supply chains.
Provides air cover for the seeds of innovation
True innovation can be unrecognizable. To the people outside a new project, it may seem to be a distraction — hard to understand, with no clear end game, and no obvious benefit. These fragile seedlings are easy to stamp out before they bear fruit. Aligning to the delivery of the corporate mission is a way to protect these initiatives until they reach minimum loveable status.
During his tenure as General Manager for Global Media at Microsoft, David Grubb was able to strike an innovative marketing partnership with the National Geographic’s Explorers expedition grant program that commercialized scientific grants. The idea was risky, but Grubb was able to build trust and drive alignment around Microsoft’s “Realizing Potential” corporate mission. Ultimately the program unlocked incremental value for both sides.
Conclusion: Purpose Drives Innovation
Many believe that businesses serving as a force for good is an oxymoron. The corporation’s reputation as a soulless, profit-extraction machine is often well deserved. Encouragingly, there is a growing body of evidence that answering to more than maximizing shareholder value is also good for business. Mission-driven businesses are proving to have a competitive advantage. Aligning the energy and might of talented teams inside a corporate structure with real societal problems is a win for all.
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