The company mission, when used properly, makes a profound impact on business results. But, like everything else, it comes at a cost.
It takes time to shape and communicate it. It takes the form of a more tangible financial opportunity cost when a company decides to not pursue certain clients or projects because they are not in line with its purpose – says Wiktor Schmidt, Executive Chairman at Netguru.
“Netguru’s take on…” is a series explaining how Netguru approaches important subjects that are often overhyped or misunderstood within the industry, such as strategy, sustainability, or business ecosystem. We break them down to shift the discussion from abstract concepts to tangible actions that influence our everyday work. This article provides our take on the company mission.
The mission is a tool
Wiktor Schmidt has seen a fair share of organizations struggle to define and solidify their mission. He experienced it first-hand when he co-founded Netguru 13 years ago, then serving as its longtime CEO and recently as the Executive Chairman. Over the years, he has also advised many companies as an angel investor, board member, and mentor.
“The mission is one of the most important tools to figure out what a company is actually striving to achieve.”
“When used properly it makes a profound impact on business results,” says Wiktor.
First of all, the company mission is a tool that helps focus efforts and speed up the decision making process. As the organization grows, leaders face the dilemma to either maintain centralized control over its course and slow everyone down or distribute the authority and risk that people steer in different directions.
“Having a mission expedites tough decisions at every level of a company and helps to align the resulting choices. It’s a kind of compass that everyone can use as a guide when making day-to-day judgments."
The company mission is also a psychological tool that can provide answers to important existential questions. “We spend almost half of our waking hours working. At some point you ask yourself: why am I doing this? Is there a higher purpose beyond making a living? Why did I choose this job over a thousand others I could have chosen?” explains Wiktor.
Such questions are easier to answer when a company has articulated its mission and vision. Additionally, communicating it broadly might attract employees and clients whose goals are compatible with the company’s, making the cooperation frictionless.
Creating a mission statement
Many companies have an origin myth, where founders knew exactly what they were trying to accomplish from day one. Those stories might put pressure on clearly stating the company mission early on.
“I think most of them are at least a stretch. From my experience, many founders have a rough idea that crystalizes over time. Forcing a mission statement too early typically ends up with something superficial that doesn’t really resonate with people,” warns Wiktor.
Sometimes founders give in to the temptation to create a mission just to please other people – appeal to potential employees or clients but not necessarily reflect true aspirations of the company.
“In the long term, it never works. Once people realize that words on the company wall’s do not match its actual culture and purpose, it’s very hard for leaders to turn it around."
"The company mission is something that needs to be discovered rather than designed."
Netguru hasn’t had a written mission statement for years. It took some time to distill the right words but eventually it has found the way to convey its purpose.
“We knew this is an embodiment of our organization because it was as true then as it had been 10 years earlier when we were just starting up,” Wiktor recalls. “We asked ourselves: would it make sense to put it on our website on the first day of a company? If the answer had been no, it would have meant we needed to go back to square one.”
Measuring the impact
It’s easy to track financial measurements. It might explain why so many businesses become attracted to the idea that profit should be the only thing used to evaluate their performance.
“Measuring what impact the company mission has is one of the tricky things. Especially when a company, like Netguru, defines its purpose as larger than just making money.”
One needs to look at different aspects of the social, economic, and environmental footprint of a company. With so many variables, it’s easy to get distracted, so selecting the right input is crucial.
This led Netguru to undergo the B Corp Certification process and benchmark the company’s positive impact on employees, community, environment, and clients. The benchmark distils a company's performance in those different domains into a single number and shows the commitment to improving it in the future.
“It’s still not easy, but it gives us a better idea of where we are with the realization of our mission and what we can do to move forward,” Wiktor explains. There are also specific KPIs for tracking the social or environmental impact of specific projects, but it’s still much more indirect when compared with the standard profit and loss statement.
While quantifying the impact might be difficult, one can immediately feel whether the mission is working out for a company or not. The most critical, and therefore meaningful, evaluation is performed by new employees and clients.
“Within the first 7 days, they decide if we believe in what we preach. Their first impression of interaction with various people in the organization says a lot about how true we stay to our purpose and how strong our culture is,” says Wiktor.
The ROI of having a mission
It takes the form of a more tangible financial opportunity cost when a company decides to not pursue certain clients or projects because they are not in line with its purpose. But in the long term, staying true to the company mission paid off for Netguru, also in a financial sense. There is a lot of discussion around this.
The company mission, when used properly, makes a profound impact on business results. But, like everything else, it comes at a cost. It takes time to shape and communicate it.
"Some people say ‘well, if the ROI is positive, then you’re not doing it for a greater good but for profit!’ But it’s a false dichotomy."
"If you make a positive impact on people and turn a profit at the same time, it gives you a sustainable way to grow your impact. It’s a win-win,” Wiktor explains.
The benefits of having a strong organizational culture were especially visible during the COVID-19 outbreak. Many companies rushed decisions on cost-cutting and preserving financial results. Netguru while also cutting and freezing some non-essential costs also doubled down on its core and increased spending to provide value to the community of innovators, sharing the best remote work practices and reaching out to its clients to support them in this difficult moment.
“It definitely helped us go through this crisis. Knowing precisely who we are and why we are here gave us confidence in our actions. As a result, we were able to keep our morale high and stay composed when making tough decisions,” Wiktor sums up.