Turning purpose into business advantage
Purpose is becoming increasingly important in defining business success. We’re moving away from the old belief that a businesses sole purpose is to generate profit for shareholders and entering a new era where cause and purpose is not the enemy of commercialism, but perhaps the key to it.Read More…
The Havas Media ‘Meaningful Brands’ study found that purposeful brands such as Unilever, Patagonia, and Wholefoods outperform the stock market by 133%, gain 46% share of wallet, and achieve marketing results that are double those of lower-rated brands. These companies are commercially driven, but they manage to make people feel like they come first.
Creating shared value – for all
They succeed because they have courage and confidence to pursue purpose that’s beyond profit. They see their customers and employees as members of a like-minded community. They recognize that businesses can only succeed longer term if they create value for the community at large, not just shareholders.
Purpose and responsibility is not just a buzzword, or a publicity stunt. We see companies starting to embrace the economics of doing the right things right the first time, rather than facing fines or through PR backlash.
Purpose represents the new competitive advantage.
Purpose led companies attract and retain the best talent. A recent study revealed that employees are 3x more likely to stay in a purpose led company. Purpose also creates a compelling bond with customers. The 2017 Edelman earned brand study found that 65% of consumers buy on the basis of their beliefs and that 57% are buying or boycotting brands based on the brand position on a social or political issue.
It’s becoming clearer that brands that build in purpose see more solid consumer engagement, but those that neglect to do so risk to become obsolete.
Becoming a purpose led brand
According to the authors of ‘On Purpose’, there are three steps to becoming a purposeful brand:
Stand up: Purposeful brands have a clear sense of who they are and why they exist. They stand for something beyond making a profit. They represent something of value in the eyes of the consumer.
Think of Apple.
Stand Out: They’re different to competitors in a meaningful way that creates value for customers. They are intentional in their purpose through all their touchpoints. They deliver consistently and that contributes to their reputation.
Think of Lush.
Stand Firm: They create a culture that sustains them and continually innovate to stay ahead. They invest in product and service innovation and are more concerned with using profits to invest in the business and the delivery of their purpose. Rather than maximising earnings per share for their shareholders and chief executives.
Think of Patagonia.
We can see that purpose galvanises people to ignite long-lasting positive change, driving growth and innovation. But becoming a purposeful organization is not easy. You can’t force it, fake it or fudge it as recent backlashes from Tesco, VW and BP have shown. It requires commitment, leadership and rigour.
It’s worth remembering that behind every brand and organization decision is a person – whether you’re a CEO or intern, consumer or shareholder – we all have a voice. We all have a choice. Purpose mobilises people in a way that pursuing profits alone never will.
In the words of Dee Hock, the founder of Visa, “Money motivates neither the best people, nor the best in people. It can move the body and influence the mind, but it cannot touch the heart or move the spirit; that is reserved for belief, principle, and morality’’.
Photos: Joshua Earle
Outperform the stock market by 133%, gain 46% share of wallet, and achieve marketing results that are double those of lower-rated brands
Dee Hock, founder of Visa
"Money motivates neither the best people, nor the best in people. It can move the body and influence the mind, but it cannot touch the heart or move the spirit; that is reserved for belief, principle, and morality’’