Startups – this is the phrase you need to grow
If you walk into an Airbnb office, you might see a prominent sign proclaiming: “belong anywhere”. This is the statement of intent that the Airbnb team used to achieve their mission of creating a world where everyone can feel at home anywhere. And it’s visibly plastered in their desks for a reason: having a clear goal boosts performance.
This is not just a public relations exercise; according to a study by the Boston Advisory Group (BCG), companies with leaders aligned around a well-articulated goal are twice as likely to achieve above-average shareholder returns. And a goal beyond profit is a magnet for the best employees: companies with a clear goal report 40% higher levels workforce retention than their competitors.
The objective encompasses what are often also called mission or vision statements, which are often ill-defined and for startups often unnecessary. Rather, talking about a goal gives a clear sense of direction and is part of the “North Star” that every startup should have at some point.
What defines a goal statement?
A good goal aligns leaders, creates meaning, and builds bonds based on pride and emotional attachment between the workforce and the company. It is generally defined by three qualities:
First, it describes a timeless social good that goes beyond employees, customers and investors. For example, if the company contributes to climate neutrality, equal opportunities, universal access to knowledge, the fight against food waste or human creativity, it addresses society in as a whole, ideally to humanity. Google’s “Organizing Global Information and Making It Universally Accessible” is a good example.
It describes a timeless social good that goes beyond employees, customers and investors.
Second, the goal is independent of profit or growth and therefore generally cannot describe a quantitative (business) goal. When fintechs like N26 or Monzo aim to reach millions of financially active monthly customers, they define a business ambition – which is necessary, but cannot replace the goal. Monzo’s goal is a prime example: like “making money work for everyone” and they have a good explanation how they got there.
Zurich-based deeptech startup Synthara.ai also aligns team with purpose beyond financial goals. This “Activates and enriches the human senses through intelligent devices linked to the body, such as hearing aids and virtual voice assistants”.
Third, the goal is never completely achievable. Its time horizon is infinite. When Spotify talks about unleashing the potential of human creativity, it will never be over. Or when Wise fintech targets “money without borders – instant, convenient, transparent and ultimately free”, this will never be fully achieved either.
Finding an attractive goal is more difficult when you are selling to companies. US B2B payment provider Square has come up with an interesting solution. Its aim is to enable “everyone to participate and prosper in the economy”. Thus, the company seeks to give the electrician the means to send invoices, help the clothing store to pay its employees and give capital to the coffee chain for a second, third and fourth. site. For B2B companies, it is often useful to consider the societal contribution of their products and services, whether in the form of safer jobs or reducing the carbon footprint with higher energy efficiency.
How do you actually create a goal statement?
As a good first step, leaders can initiate the “Startup Raider Thought Experiment”. Imagine that an investor offers to buy the business at a multiple of the given market value. All founders and shareholders are happy and all employees will receive fulfilling jobs at equal or higher pay. However, all services and products will be terminated and the trademark erased. Why would you decline the offer? This answer leads to the theme of the company’s raison d’être, such as carbon neutrality, access to knowledge or health.
As a next step, it is often helpful to write a one-page manifesto around this theme – ideally providing an authentic rationale why the founders or management team care about the goal. An offsite leadership presence that is away from the office is often a great place to do this. An external author, consultant or agency could also help here.
If your goal is compelling, [your employees] will be able to say in simple words why it is precious to get up every morning to work for your business.
Finally, you can refine the subject with your employees by giving them the opportunity to comment on the manifesto. Taking the “grandmother’s test” with your employees is a good way to see if they are concerned. What story about why they work for the startup can a front office worker tell that will turn their grandmother on over a Sunday afternoon coffee? If your goal is compelling, they’ll be able to say in simple words why it’s important to get up every morning to work for your business.
Smiling grandmother guard
It’s critical for startups to take these milestones as soon as they surpass 30-40 employees and start hiring more senior executives (usually for Series A at the latest), as a clear goal helps them set the direction of their business. their teams.
Building a business just to enrich its leaders and investors will no longer be enough – you must also pay your employees in meaningful currency. Doing this will not only unleash their potential for performance and growth in your business, but will inspire them – and might even put a smile on your grandmother’s face.
This article is an abridged version of a chapter in the book “The Builder’s Guide to the Tech Galaxy – 99 Practices for Making Startups Evolve in Unicorn Corporations”.
Martin Schilling is author, investor, entrepreneur and former COO of N26 fintech. Thomas Klugkist is an author, media and communications manager, and scale-up consultant.