I’ve been doing a bit of research on mission statements over the last few days. It’s been inspired by some M&A work we’re focussed on. My personal view has always been that companies with a clearly defined (and often simple) mission do much better, in the long term, than those without this compass. In many ways the mission sets the strategic direction, and as we’ve discussed here before, my view is that getting the direction right is step one on the road to a successful outcome.
At Lough Shore, we live by our own rhetoric on this front, and defined our mission from day one:
“Our mission is to invest in high potential management teams and partner with them to build great businesses. Our goal is to bring ten great companies to exit or IPO by 2025”.
Twelve months later and I don’t see a need to tweak or change the mission. I’m happy with the direction, and the 2025 time horizon gives plenty of time to make a few blunders, figure them out and ensure lasting success. The rhetoric in this statement also gives us enough wriggle room to allow the operating model to evolve and mature; for example, while it highlights that our business is focused on “investing” in high potential teams and partners, there is also some latitude in there. It doesn’t specify whether we intend to invest time, effort, our own hard earned cash, or manage a fund investing money from institutions, government or from other angels and high-net-worth individual. We can figure that out as we’re going along.
For me, the benchmark mission statement over the last decade has to be Google’s:
“Google’s mission is to organize the world’s information and make it universally accessible and useful.”
I also like the approach to defining a mission taken by consumer products company ZAGG:
“ZAGG is committed to offering innovative ways to improve the relationship between people and their beloved gadgets-that they love and rely upon. We get it!”
Full disclosure, I liked ZAGG’s mission so much that I bought some shares in the company for my personal portfolio!
After the mission comes the constitution. Great companies tend to have a well-defined (& thought out) constitution and code of ethics. If the mission alludes to what the company is trying to achieve, the constitution lays out some ground rules on how it intends to get there. Done right these become the foundation for consistent day-to-day decision making across the company.
Innocent (the smoothie company) is another great example, their philosophy and ethics define their entire opeation and has done so from the very beginning:
“It might make us sound a bit like a Miss World contestant, but we want to leave things a little bit better than we find them. We strive to do business in a more enlightened way, where we take responsibility for the impact of our business on society and the environment, and move these impacts from negative to neutral, or better still, positive.”
From my own perspective, defining a strong constitution at the start and sticking to it was a key cornerstone in the success of Wombat. It was presented on the company website as a set of initiatives for all to see.
Here’s an excerpt from the Wombat website on Initiatives:
This section outlines the seven key initiatives for the Wombat group of companies in 2005-2008. These initiatives focus on key areas we believe to be critical to the growth of the group to continue on its path to becoming a global player within the market data, messaging and trading infrastructure sectors.
Our company wide initiatives are to:
1. Build, recruit and retain exceptional software engineering and business talent.
2. Develop an enjoyable workplace where talent and innovation flourish, learning and personal development is paramount, with strong communication where everyone pulls together as a team, the individual is respected, and results are rewarded.
3. Achieve cost reduction combined with increased nimbleness and productivity through automation, the development of world class engineering and business processes, templates, innovation, and the application of new technology.
4. Create new products and new lines of business around the central vision and core competences.
5. Exceed profitability targets by developing the sales function and business concepts to exceed targets in market penetration and grow market share.
6. Expand margin by increasing penetration in existing accounts through the delivery of exceptional quality, service and customer satisfaction.
7. Achieve excellence in generalship to out-think, out-maneuver, out-innovate, out-perform and out-deliver competitors and incumbents to win market share.
At a glance, these do reflect Google to a certain extent, though the approach was borrowed from the CEO who had only just transformed New York and Company.
In many ways Wombat did turn out to be an exceptional company and I have no doubt this success was built firmly on initiative one listed above. From day one, we set out to “Build, recruit and retain exceptional software engineering and business talent”. It was a simple formula: Exceptional people = An Exceptional Company. That was our mission, what’s yours?