Is it important to have a social mission in your small business? Our Guest Contributor Jeff Zhou explains how having a social mission in your small business can help you optimize your business returns by aligning your social mission with your business model. What he calls “You can have your cake and eat it too.” Welcome, Jeff!
As a founder, I am always optimizing our limited dollars between competing goals. One area I have never had to compromise is social mission. We are fortunate to have mission alignment: at my company, Fig, our business return is maximized when our customers achieve the highest possible credit score.
What is mission alignment? Simply put, it is the level to which a company’s social mission is baked into its business mission. A company’s business mission will always be to generate return, while the social mission can be anything from improving access to drinking water to making it easier to get a reasonable loan.
When these two missions are not aligned, it can cause internal conflict because social mission activities have real costs, and companies have limited dollars.
With complete alignment, a company no longer has to make trade offs: there is a single path forward.
Let’s look at an example:
It is a fantastic model that provides many shoes to those who need it, but it is not completely mission aligned because giving shoes away is a cost to the company. While the marketing, sales, and other benefits could ultimately outweigh costs, I would argue there is room for more alignment because BOGO is not a core business activity.
TOMS’ core business is making and selling shoes. TOMS then uses a portion of the proceeds to buy shoes / clean water / medical supplies for in-need groups. I can break out these two distinct activities because, from the start, the mission is not baked into the core business.
What if the societal benefits could be irrevocably tied to selling shoes? What if TOMS’ shoes were only made and sold via companies owned by the people that they are giving shoes to today? What if TOMS’ process of making higher quality shoes naturally created clean water as a byproduct?
My ideas might be farfetched, but I am hoping to demonstrate that it is possible to improve TOMS’ mission alignment. If TOMS’ shoes were made and sold by the people they’re giving shoes to today… then TOMS core business of making and selling shoes would no longer be separated from their social mission to support communities in need! In 2013, TOMS started producing shoes in Haiti, a region they were giving shoes to… mission alignment!
How can you find social mission alignment?
The worst (and best) part about finding alignment is that there is no silver bullet: every company is unique. For the little that it is worth, here are the three questions we asked ourselves repeatedly at Fig to get to mission alignment.
1) What is success for our customer?
2) How can we build a business that creates this success?
3) If we do everything (be honest with yourself, everything means everything) to drive business return, how does that impact our customer success outcome?
At Fig, we ultimately found alignment through business model innovation. TOMS achieved alignment through operations. Finding alignment is not easy, but it has allowed us to operate more efficiently and grow without fear of losing our core mission.
Working on social mission alignment or think it is a waste of air? I would love to hear your thoughts and share ideas! Reach out at firstname.lastname@example.org.
Jeff Zhou is founder of FigLoans, which changes the way people with low credit experience banking by offering emergency loans and financial stability products in a socially responsible way. He was a peer-selected winner of Village Capital: FinTech US 2016.
- Martin Luther King’s Day: Which “DREAM” is dying in America? - January 18, 2021
- PPP Loan forgiveness: $50,000 loans for small business and self-employed - January 13, 2021
- Second round of PPP loans: Why you should act now and where to go - January 11, 2021
- Ted Cruz behavior damages the Latino brand and leadership - January 7, 2021
- Latinas in Business all hands in for a brighter future - December 24, 2020