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Like this article? We recommend Mission with Purpose

Mission with Purpose

It's a sad commentary that the chief goal of many organizations is simply to increase the shareholder value of the organization—that is, to increase profits and therefore returns. Although such sentiments are rarely expressed directly on the mission statement per se, for most organizations increasing profits is the understood goal. Most companies tend to have mission statements and such that sound more noble, but the reality—and in fact, for publicly traded companies, the charter, the reason for existence—is "To create shareholder value, period." This is the bottom line as stated so eloquently by "Chainsaw Al" Dunlap—ironically, as Dunlap was looting his own company.

What's Wrong with Money?

Frankly, as much as I reject almost everything for which Al Dunlap purported to stand in the 1990s, when he was popularizing the idea of creating profits by firing everyone, I did like the simplicity of mission in his statement about shareholder value. I liked it because it was in such contrast to the mission statements of that era—and for that matter, in 2009. No dishonesty about whether the company exists to make better light bulbs or to "advance the state of the art," or any such nonsense. Companies exist to make the generation of filthy lucre more efficient.

The good or ill of such a goal can be debated—and often is. But what I find striking is the fact that so few companies actually have "create sustained and ever-growing profits" as their mission statement, when in fact, that is their goal. To me, it begs the question, "Why, exactly, do we have mission statements in the first place?"

The Real Purpose of Mission Statements

Of course, when you look carefully, mission statements are not there to state the mission of the organization. In most cases, Al Dunlap's quote about shareholder value, not the text of the mission statement, actually captures the real mission. The purpose of a mission statement seems to be obscuring reality and providing the illusion that there's some purpose other than economic for a corporation to exist. In effect, such statements are a propaganda tool, designed to help create a sense of engagement among a salaried workforce.

The goal of most mission statements is to make the mission of the organization less transparent. Why would an organization that purportedly respects its people lie about the purpose of the company in the first place? Well, as a non-shareholder, would you really be motivated to work hard to make other people—people who probably don't care that much about you—rich? Of course not. Not nearly as motivated as you would be toward something with a higher purpose, such as "advancing the state of the art in technology."

'But I Can Do Charity in My Spare Time'

What argument would someone typically make in defending the idea of a good mission statement being simply "create shareholder value"? "Money itself is just an instrument that represents value." This is an argument I can respect. Money isn't evil or good; it's just a convenient and liquid form of value that individuals can use to further the ends that they deem important. Why not leave "missions" to charities, nonprofits, and others who receive donations from individuals who are successful in the for-profit side of the economy, where people work for companies, all of which have a mission statement that goes something like "We exist to generate larger and larger piles of cash."

From a human potential standpoint, there are some huge problems with this approach. Very few people (and mostly in the West) can afford to really give much to charity or invest much more than money into their work. Moreover, many people who are passionate about causes would like to participate, but simply by the nature of their day-to-day work have little left to really make much of an impact.

The Paradox of Nonprofits

Because they're starved of resources, most nonprofits don't benefit from the talent that's available in the general marketplace—the nonprofits are generally outbid by for-profit companies. What ends up happening is that the strongly motivated take the lower pay to work for the nonprofit. Anyone who is less than strongly motivated—perhaps willing to get involved in something with real purpose, but still in need of convincing—generally ends up working in a normal for-profit company by default.

Worse yet, because of the focus on the mission (remember, a nonprofit selects for more "true believers"), the staff at a nonprofit tend to be people who are not focused on financials, beyond perhaps working to get additional grant money. Over time, this relationship to money—as it is something given to them, not something earned—becomes part of the organizational culture, and most of the talent of the nonprofit ends up spending most of its time getting more funding, rather than making the organization more efficient.

The Mission of Consultopia

So, if the nonprofit model is less than optimal, what might be better? In his book Creating a World Without Poverty, Nobel Prize[nd]winning economist Muhammad Yunus describes his Grameen Bank organization. This for-profit enterprise makes a compromise: His investors get a moderated rate of return, but the bulk of the profits go into supporting the mission, which, in the case of Grameen Bank, is "To enable the poor, especially the poorest, to create a world without poverty."

This concept, which Yunus calls a social business, is a proven model that has generated massive returns on human capital in some very unexpected places—in his case, micro-lending in Bangladesh. There are noted downsides, of course, in that such businesses don't have access to capital seeking a high rate of return. However, these businesses have the advantage of having a real, principled mission that can attract talent that, while wanting to earn a market wage in a real business, has a desire to do something other than simply enrich investors. In industries that are less financial capital-intensive, and more intellectual capital-intensive, such as software and technology consulting, this is a killer advantage. Growth of a technology-consulting company is much more bound by its ability to attract human capital than economic capital.

We see this reality today in how companies such as Microsoft (through the Bill and Melinda Gates Foundation) and Google invest a lot of their profit into humanitarian causes, allowing their employees to at least have a sense that their efforts are likely to help a mission beyond simply making some rich guy even richer. Over time, it's likely that even consulting organizations will start to have the same kind of orientation, as more of them see the advantage of not just having a higher-order mission, but living it.

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