The rise of the purpose-driven brand should come as no surprise: Beat the drum loudly enough, and long enough, and change is inevitable.
While some brands have placed purpose over profit, soul over selling, for decades (think Timberland and Ben & Jerry’s), the sea change many pundits saw coming is now within view: 85% of American business executives agree that companies must do more than make money, and 85% say a focus on purpose increases profits, according to a study by PR firm Porter Novelli.
Research also shows that brands with meaning outperform the stock market, overperform on revenue growth, and positively impact society. With more consumers embracing purpose with their actions, they expect brands to follow suit by associating themselves with social causes. Equally important, people want to work for, associate with, and buy from brands that advocate on their behalf.
Even so, it’s not all rainbows and unicorns on the purpose front. Getting a brand’s purpose right is tricky, and it needs time to develop a deep root system, like a great bottle of wine needs time to breathe. If purpose isn’t fully embraced or understood within an organization, or it’s not baked into the brand’s DNA, it’s doomed to fail. Here are some thoughts brands need to keep in mind on their purpose journey:
A brand’s purpose is not the same as a corporate mission.
There is a distinct difference between the two terms. A mission is business-centric — What are we going to do, and how are we going to do it? — while purpose addresses why an organization exists. Walmart’s purpose, for example, is to “save people money so they can live better.” Purpose is the embodiment of a brand’s ethos, guiding every strategic business decision, from marketing and product development to hiring and operations. And it should tie to an economic, societal, or environmental benefit. Philanthropy, cause marketing, corporate social responsibility, and sustainability are ways brands bring purpose to life.
“Purpose must have some real legs to it, and it has to relate to the significant stakeholders of a business,” said Daryl Brewster, CEO at Chief Executives for Corporate Purpose. “Purpose is more than a marketing slogan — it’s the essence of the enterprise.”
The CEO needs to lead purpose.There is a line of thinking that because marketing and human resources are in the best position to communicate a brand’s purpose initiatives, they should consequently lead the effort.
Not exactly. The purpose flag must be carried, held high, and continually waved by the CEO. It’s not about holding a yearly rally for employees, taking part in a community event, or donating to a charity; it’s about wearing purpose on one’s sleeve and leading by example so others will follow. CEOs with a purpose at the heart of their organization are 8% less likely to think it is a challenge to get leaders to support their strategy, compared to those CEOs without a clearly defined purpose, a study by the agency BrandPie found.
“[Purpose] really does start with the CEO and the board,” said Paul Alexander, chief marketing and communications officer at Eastern Bank. “They have to endorse it, and if you have their support, you have a fighting chance of sustaining your purpose.”
Activating purpose takes time and effort.Nothing confounds businesses quite like the process of embedding purpose internally and advancing it externally. It can take years for a global organization to get a purpose strategy right across regions and countries, and over time the consistency and intent of the strategy can wane without constant innovation. While 80 percent of purpose-led CEOs agree that business leaders need to be more focused on long-term value creation rather than short-term profit delivery, only 28 percent are integrating purpose into their decision-making and strategy, according to the BrandPie study.
A separate study on B2B companies by the ANA, Carol Cone On Purpose, and The Harris Poll, uncovered a subset of internal ambassadors called “Believers,” who agree that the more a company focuses on purpose, the more successful it will be. Identifying and activating these purpose ambassadors can help ignite and sustain purpose throughout an organization.
Jim Stengel, a former global marketing officer at P&G and president and CEO of The Jim Stengel Company, suggests companies discuss purpose during performance reviews and one-on-one meetings. “Start by saying, ‘Here’s what the company is trying to be, here’s our purpose, and here’s how we’re bringing it to life. What have you done this week, this month, this quarter yourself for our customers and our employees?’ That simple question makes purpose important,” he said.
A brand’s purpose won’t please everyone.Consumers and customers want brands to not only drive societal change by addressing today’s most pressing issues but operate ethically and with greater transparency. As more brands align their purpose with a social issue, such as racial injustice or inequality, it becomes increasingly difficult to please the masses. Sometimes, brands will make moves to be more in concert with a wider swath of society — and that’s OK, as long as employees and other key stakeholders feel the brand’s heart is in the right place and can make a positive impact in the world.
“Because consumers are in control, you need to have policies and an offering that is relevant to the average person, not to a particular sector,” said Norm de Greve, chief marketing officer at CVS Health. “In some ways it’s getting easier, but no matter what you do, there are groups of people who will say, ‘That’s not me.’ So, you need to make choices.”