Purpose over profit

Vail Resorts which operates 40 ski resorts worldwide, cut their ski pass prices, resulting in the largest sales of passes in their history. An increase of 700,000 passes from 2020-2021, resulting in a 21% increase in revenue from the passes. Sounds good, huh? Not when you look closer. Their stock price was $372.51 on November 1, 2021 and is currently trading around $280. That’s a 33% drop in their stock price.

That massive influx of new skiers and a focus on cost savings to improve profits have resulted in a backlash. Vail Resorts has been getting a lot of negative news and social media posts over their long lift lines, employee complaints, and an overall degradation of the skiing experience for their customers. Yet, the company mission is that you will have an experience of a lifetime.

So, what happened?

The pursuit of profit over purpose is what happened. The right levers were pulled to increase demand, lower expenses, and streamline operations. But in that process, Vail also apparently lost sight of their mission which became just words approved by a board and/or marketing committee. Their true mission seemed to be more about shareholder return. And how many times have we now seen what an imbalance on that one factor of success can do to a company? Take Enron, Wells Fargo, and Volkswagen for example.

Vail Resorts mission is – to create the Experience of a Lifetime for our employees, so they can, in turn, provide exceptional experiences for our guests. Vail Resorts is dedicated to delivering seamless guest service by continuously investing in our team and the infrastructure, systems and training programs that support the employee experience.

Having purpose is at the core of why a company exists.

It comes down to balance and ensuring that a company’s mission is truly followed and not a token of their brand. This is not to say that profits or meeting earnings expectations are not important, otherwise everyone loses. But the end does not justify the means. What a company does is not as important as why and how they do it. And there is a lot of data that have demonstrated how purpose driven companies financially outperform their peers. Customers want to shop and be loyal with purpose driven companies, employees are more engaged, and there is more innovation.

If your organization has a mission statement, and you don’t know what it is, or it is not considered when making material decisions, it’s time to start. A powerful mission and vision statement supported by real and unique values that only belong to your company are powerful tools and guides to create a strong brand. See them as just nice words and risk becoming another example of what not to do.