Morningstar at 40: A Why Company

All
companies
choose
what
they
do,
how
they
do
it,
and
why
they
do
it.
But
in
any
given
enterprise,
one
of
these
vectors
dominates.
Hence,
there
are

What
companies, How
companies,
and

Why
companies.
Morningstar
from
its
founding
has
been
a

Why company,
a
company
defined
by
its
mission
of
investor
success.

When
Morningstar
started
in
1984,
most
companies
in
the
investment
space
were

What
companies.
If
asked
to
define
themselves,
the
big
asset-management
players
of
the
time
would
say
that
they
managed
active
mutual
funds
sold
through
brokers.
These
firms
enjoyed
powerful
tailwinds
through
the
1980s
and
1990s,
but
when
the
winds
turned
against
active
management,
against
funds,
and
against
brokers,
most
of
these

What
companies
couldn’t
pivot.
Their
defining
characteristics
locked
them
into
an
identity
that
resonated
increasingly
less
well.
Many
of
these
firms
have
been
consolidated
in
recent
years
at
prices
a
fraction
of
their
peak
value.

What companies
resist
change
and
are
prone
to
irrelevance
or
extinction.

How companies
have
even
shorter
shelf
lives.
Think
of
Pets.com
and
other
mercurial
entities
whose
defining
characteristic
is
how
they
deliver
their
service,
not
what
they
do
or
why
they
do
it.
Unless
protected
by
a
patent,
being
first
in
a
new

How
leaves
a
company
ever
prone
to
stronger
followers.

A
Mission-Driven
Company

Why
companies,
on
the
other
hand,
have
flexibility
to
adapt.
They
view
change
not
as
a
threat
to
what
they
do
or
how
they
do
things,
but
as
an
opportunity
to
better
fulfil
their
mission.

Why
companies
can
adapt
with
the
times
yet
stay
true
to
their
purpose.
This
healthy
approach
improves
their
odds
of
success
and
longevity.

In
our
early
years,
Morningstar’s

What
and

How
were
print
products
about
US
funds
delivered
and
largely
marketed
by
mail.
Today,
print
products
make
up
less
than
2%
of
our
revenues,
US
funds
are
just
the
tip
of
our
coverage,
and
virtually
none
of
our
services
are
sold
or
delivered
by
mail.
We’ve
pivoted
repeatedly
throughout
our
history,
shedding
old
behaviours
and
developing
new
skills,
but
we’ve
never
deviated
from
our
mission.
It
has
been
our
North
Star,
giving
purpose
and
direction
to
our
efforts.

The
biggest
advantage
of
being
mission-driven,
however,
is
that
it
attracts
and
retains
great
people.
Everyone
wants
to
be
a
part
of
something
they
believe
in,
something
that
gives
them
the
satisfaction
of
making
a
difference
in
the
world.
The
best
people
want
a
purpose,
not
just
a
paycheck.

For
Morningstar
staffers,
empowering
investors
is
a
quest
we
take
pride
in.
It
motivates
and
inspires
us.
A
firm’s
employees
are
its
greatest
asset.

Why
companies
attract
and
retain
the
best.

As
I
reflect
on
40
years,
I
believe
that
Morningstar’s

Why
is
the
reason
that
Morningstar
has
endured,
and
the
investors
we
serve
and
staff
we
have
assembled
have
prospered.
The
mission
makes
the
difference.

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