Purpose
matters
to
your
business.
Purpose-driven organisations build more meaningful,
sustainable
relationships
with their customers and employees, transform their categories and grow their bottom line. By connecting with the universal human need for meaning, they breathe life into undifferentiated brands, motivate their employees to do better, and inspire their consumers to care about them. Finding your organisation’s
purpose
and
aligning
your business behind it will transform not only how you operate and innovate, but the impact you make in the world.
A Guide to Purpose
2013 | Vol 2
By Dhatchani Christian, Nicole Velleman & Al Mackay
Purpose
matters
to
your
business.
Purpose-driven organisations build more meaningful,
sustainable
relationships
with their customers and employees, transform their categories and grow their bottom line. By connecting with the universal human need for meaning, they breathe life into undifferentiated brands, motivate their employees to do better, and inspire their consumers to care about them. Finding your organisation’s
purpose
and
aligning
your business behind it will transform not only how you operate and innovate, but the impact you make in the world.
A Guide to Purpose
Legend has it that Sony founder and CEO Akio Morita met with a small group of men in a burned-out Tokyo department store in the wake of World War II. Morita’s advisors presented a strategy for building a fledgling Sony. The plan would “make Sony the number 1 technology company in Japan”. However, Morita didn’t see this as the company’s goal. He changed the mission to “make Japan the number 1 technology country in the world”; an intent that saw beyond the financial success of Sony alone, but was firmly rooted in the purpose of lifting Japan out the ashes of World War II and restoring the country’s national pride and place on the global stage. Visionary leaders such as Sony’s Akio Morita, Apple’s Steve Jobs and Whole Foods Markets’ John Mackey have proven the business nirvana that can follow when an organisation is lined up behind a principle that lights its way forward. Joey Reiman calls it being ‘purpose driven’, Jim Stengel calls it ‘being led by ideals’ and Michael Porter calls it ‘creating shared value’. But they are all part of a changing paradigm in business – a sentiment that sees more and more of the world’s most powerful brands talking about their purpose in the world. Not merely as an afterthought or a marketing idea - but as a new way of being successful.
pur·pose / noun 1. A business’ reason for being – the higher order benefit it brings to the world 2. A powerful motivator for purchase externally and action internally 3. A potentially powerful competitive advantage 4. The new path to the bottom line
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A first look at the concept of ‘purpose’ conjures images of philosophers, tree huggers and other enlightened souls trying to figure out their ‘reason I am here’. A little esoteric perhaps, but for many, a guiding purpose is fundamental to human life: it directs us, inspires us, and gives us reason to strive for something greater than ourselves.
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The business version of purpose is no less fundamental, bold or impactful, but is perhaps a little more grounded in practicality. The earliest notions of purpose were steeped in talk of responsibility, environmental sustainability, social need, and the ‘greater good’. Taking a stand and saving the world became trendy, and ‘greenwashing’, ‘goodwashing’ and ‘purposewashing’ became part of a marketer’s vocabulary. Today, many brands aggressively attach themselves to causes and plaster their names with social goodness. The problem is that many do not have a meaningful and relevant reason for doing what they’re doing. And cluttered, unsubstantiated claims about responsibility have resulted in confusion, apathy and a lack of confidence as consumers struggle to differentiate between companies, non-profit organisations, independent watchdogs and endorsers. The purpose we’d like to talk about is more authentic, true and sustainable. It talks to business and marketing recognising a transition in societal ideals and values, and the need for businesses to re-evaluate the value they deliver as citizens – and to citizens – of that society. This value has gone beyond mere products that address basic functional needs, to a more holistic calculation of where a business is producing or reducing value through its practices and citizenship.
Purpose is your ‘why’ Your brand’s purpose should answer the question of why the world is better off with you in it. It goes beyond profit alone, articulating and committing to the change your company wants to make to its customers, your industry, your community or the world at large. It goes beyond the technical aspects of the things you produce, or who you produce them for. It’s about asking yourself why you do what you’re doing, and why that matters. Delivering on this enables you to play a more important and relevant role in your customers’ lives, rendering the traditional concept of product or service differentiation meaningless. It’s easy for organisations to lose focus of their why, allowing the continuing churning of product and sales targets to drive their daily realities, because why they are doing it is seemingly disconnected from profitability. Many business leaders don’t realise that the why makes doing the what and how that much easier, and translates into more meaningful customer relationships. Purpose should be treated as an organising thought that provides direction for brand behaviour. Purpose is about understanding your role in addressing the needs and aspirations of your customers. These may not necessarily be about changing the world, but as consumers become more conscious and actively involved, their needs may well be linked to societal progress and sustainable development. Having a purpose is really about having something bigger to work for. It means bringing about social good in a way that is unique and resonates with your organisation and your stakeholders. It is your starting point for differentiation and engagement.
EXAMPLES OF WINNING PURPOSE STATEMENTS To empower creative exploration and self-expression
To help mothers care for their babies’ and toddlers’ healthy, happy, development
To help build a smarter planet
To deliver happiness through ‘wow’ service
To immediately satisfy any curiosity
To celebrate every woman’s unique beauty
To inspire and nurture the human spirit, one cup, one person and one neighbour- hood at a time.
Source: GROW, by Jim Stengel
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We’re not all sewing arms back onto babies There is no Holy Grail for finding the ‘right’ type of purpose It’s not a statement buried in some document. It has to be to have. Purpose exists on many levels on many levels and entrenched in your culture; because the purpose you define can address a range of individual and societal needs. for your business will have important implications for your operating model and the value propositions you offer. It What is critical is that your purpose resonates with will require taking an honest look at how your organisation your customers, inspires your people, and is true to and staff work together to deliver the promised value. The your organisational strengths. closer your defined purpose lies to the ideals of delivering social good, the higher up Maslow’s hierarchy of needs It’s important to appreciate that the type of purpose that your brand value propositions lie, and the broader the shift focuses and energises business and translates into required for your operating model to sustain the purpose. bottom line benefit is not an add-on to organisational goals.
What kind of purpose is right for your business?
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MYTH: PURPOSE IS FOR NON-PROFITS, NGOS AND CSI INITIATIVES FACT: Many of the world’s most powerful organisations, irrespective
of industry, are talking about their purpose in the world, not merely as a driver of CSI or philanthropy, but as a viable way of doing business. Corporate citizenship is taking on new meaning, as business is beginning to acknowledge its role as one of the most powerful forces for driving social change. And this meaning is resonating with its key stakeholders, irrespective of industry.
MYTH: PURPOSE HAS TO BE GRANDIOSE AND LIFE CHANGING FACT: Purpose takes many forms, and is not necessarily about
having a large-scale impact or trying to save the world. Rather, it is about identifying your role in addressing the needs and aspirations of your key stakeholders. This means figuring out what matters to them and finding ways of making a meaningful difference in their lives, however big or small this may be. Small changes are effective and often simple to implement, allowing the task of building purpose into your brand to become far less intimidating.
MYTH: PURPOSE AND PROFIT ARE MUTUALLY EXCLUSIVE FACT: Purpose isn’t to be taken lightly. Doing it right, so that it is
represented in your product, service, culture, communication and brand experience takes time and effort. But when it’s done correctly, your brand and the organisation it represents will resonate so strongly with its target stakeholders that it will be felt on the bottom line.
MYTH: PURPOSE ONLY APPEALS TO TREE HUGGERS FACT: Tree huggers form part of the set of consumers who would
find purpose appealing, but they’re not alone. Nielsen’s 2012 report on The Global Socially Conscious Consumer suggests that two thirds (66%) of consumers around the world say they prefer to buy products and services from companies that have implemented programs to give back to society. 62% of consumers also claimed that they prefer to work for companies like these, and 59% would invest in them. It seems, therefore, that purpose is not reserved for the select idealistic few, but resonates with a changing global mindset that welcomes a greater social conscience and responsibility from business.
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1. PURPOSE IS DEMANDED BY TODAY’S CONTEXT Leading from purpose is clearly not as new as it seems, if companies such as Wal-Mart, IBM, Sony and Apple have been doing it for decades. Why is making a change in the world particularly relevant now? We live in incredibly complex times, characterised by hyper-connectivity, consumer empowerment and sophistication, and the blurring of roles. The collision of such factors has made the concept of purpose more broadly relevant in business today, where previously it may have been reserved for the truly self-actualised.
How did we get here?
Shareholders take a number and get in line The Milton Friedman view that organisations exist only to maximise shareholder value has held as a guiding principle in business for years, but recent scandals such as Enron, Lehman Brothers and the global financial crisis have proven that a single-minded focus on maximising shareholder benefits can, in fact, be detrimental to broader society on a grand scale. It can lead to accounting manipulation, cutting ethical and legal corners, and short termism. The world is too complex for such a narrow view of business intent. The issues of broader society are not tangential to the business of business - they are fundamental to it. And profits are not an end in themselves, but a signal from society that a business is providing something that people want. Business now recognises the equal importance of many stakeholders - employee, customer, shareholders, suppliers, society – and when their concerns conflict, it is organisational purpose, and not shareholder value, that helps decide which direction to take.
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“What is increasingly happening is the placement of future generations as a stakeholder on the stakeholder map.” Nicola Kleyn, Associate Professor, GIBS
A more informed and demanding consumer Consumers are more empowered and demanding than ever before. They are wary of marketing spin and empty promises, and trust in business is at an all-time low. With so much choice, if you’re not saying something meaningful to consumers you’re lost in the clutter. Features and benefits are now the table stakes, and competing on these elements alone renders differentiation
near impossible. Consumers are turning to brands that align with their values and that have a rich story behind the scenes to inspire them in some way. Living these values and delivering this experience requires an organisation to be consistently genuine across all touchpoints. Everyone in the business needs to be singing from the same ‘hymn sheet’.
The We/Me age The ‘60s and ‘70s were a time when the needs of collective society were considered first. The ‘80s and ‘90s brought greed, conspicuous consumption and a focus on individual needs. The current era places importance on balancing the needs of the individual and of the collective. Pace and stimulation are enjoyed on one hand, but the feeling of emptiness that has come with our hyper-consuming, hyper-connected society results in many people seeking new meaning in their lives. They want to connect to ideas, people, activities, causes, products, and businesses that make their lives matter. They want the time they spend, the money they invest, and the energy they expend to have a positive result across the personal, social, and environmental spectrum. Businesses need to be more responsive to this social consciousness to succeed into the future.
Business vs. Society 87% of consumers globally believe business should place at least equal weight on business and society
Business is now expected to have active engagement in social and environmental issues; a sentiment proven in the 2012 Edelman goodpurpose® global consumer study which shows that 87% of global consumers expect businesses to place at least equal interest on social interests as on business interests.
Ne UK th er la nd Si s ng ap or e In di a Ja pa n
UA E
US
Ita Be ly lg iu m
Ch in a
94% 91% 90% 90% 89% 87% 87% 87% 87% 86% 85% 84% 84% 84% 83% 79%
G lo ba In l do ne si a Br az i Fr l an ce M al ay si a Ca na da G er m an y
87%
Business as a citizen in society with role to play
Edelman goodpurpose®
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“People want to work for an organisation that’s responsible. It costs less to retain great staff than it does to find them.” Justin Smith, Head of Sustainability and Good Business Journey, Woolworths Business, as a community, has the single largest capacity to impact the major challenges that the world faces. This places some responsibility at the door of business to engage and do more. According to Joey Reiman, CEO and founder of global consultancy Brighthouse, approximately 40 percent of world trade is done by large multi-national companies. Together they have annual sales that are larger than the gross national product of more than one-third of the countries in the world. Because of this power organisations have the opportunity to transform society by addressing its needs and challenges, while still serving the business bottom line.
Employee engagement is critical As business grapples with a scarcity of talent, attracting and retaining talent has become critical - and it requires something greater than pay packages or company benefits. A purpose that showcases an organisation’s contribution to society is becoming increasingly important to graduates and young employees. In South Africa, where our struggling education system has historically limited the flow of talent into the business sphere, creating talent has become as important as attracting it and businesses are increasingly getting involved in education - making a purposeful perspective a natural fit for South African employers.
“Of all the events that deeply engage people in their jobs, the single most important is making progress in meaningful work.” How leaders kill meaning at work, McKinsey Quarterly, January 2012
Our globally competitive marketplace requires employees to do more than go through the motions. They need to be productive to deliver results. For this they need to be engaged, and to be engaged they need something to believe in. Meaning matters to employees, who need to feel inspired and know that what they spend the majority of their time doing matters to others. In the fast-paced, uncertain world of business today, purpose can act as an anchor of meaning. Without it, organisations risk not mattering enough to the people that they depend on. They cannot thrive if their people feel neutral and uncommitted.
A 2011 report by online career portal Careerbuilder.com shows that “76% of full-time workers, while not actively looking for a new job, would leave their current workplace if the right opportunity came along”. http://knowledge.wharton.upenn.edu/article.cfm?articleid=2995
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This convergence of factors influencing society today is playing out in how businesses and brands think about their relationship with their key audiences, and how they choose to engage with those that they impact. Marketing thinking has evolved, as organisations begin to recognise that that in order to remain relevant they need to define the value that they deliver much more broadly than the products and services that they offer.
Evolution of Marketing Thinking
2. IT’S ESPECIALLY RELEVANT IN AFRICA Purpose may seem more suited to developed societies, where concepts such as sustainability and environmental conservation first took root. Research shows, in fact, that consumers in various emerging markets (China, Brazil, India, Indonesia, Malaysia and the UAE) respond considerably more favourably to purposeful brands than their counterparts in the US, Western Europe and Japan do.
The Edelman goodpurpose® 2012 survey reports that these consumers: Trust a brand that is ethically and socially responsible 83% vs. 66% Recommend a brand that supports a good cause 82% vs. 64%
Switch brands to a different one supporting a good cause 80% vs. 67%
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The foremost reason for this: these consumers are more attuned to the social issues that impact their quality of life, such as education, healthcare and clean water – and they are more aware of (and responsive to) the organisations that help them solve these issues. African markets have a broader set of needs than those in the developed world, and businesses looking to expand and connect with these new customers would do well to factor in these broad needs. As Benjamin Mophatlane, CEO of Business Connexion, explained it: defining their purpose was a requirement for their panAfrican strategy. In their case ‘making the impossible possible through technology’ resonated across the needs of African markets and inspired employees to get up in the morning.
In South Africa, we face a large range of societal issues that cannot be addressed by government alone. Interviews with local organisations indicate that there is a swing in business psyche towards accepting that business progress has to be rooted in something greater than profit; something that impacts employees’ lives, communities and the country as a whole. Nicola Kleyn, Associate Professor at the Gordon Institute of Business Science (GIBS), points out that the frame of reference for business as to who to add value to has shifted. This is partly influenced by South Africa’s highly progressive King Code of Governance that obliges businesses to consider their impact across a broader spectrum of stakeholders. The challenge comes in making this contribution broader than an ‘organisational alter ego’ of CSI.
“Business has the opportunity to make more of an impact in the South African context. It is absolutely critical if we look at the situation that we find in our country, that business defines its purpose beyond making money for its shareholders.” Nicola Kleyn, Associate Professor, GIBS South African businesses have the unique opportunity to facilitate real progress at a country level. This doesn’t mean trying to solve everything at once, but there are many opportunities for brands to play an active role by doing small things to help create a better society. The South African marketing community seems to agree. A recent Brand Council SA survey amongst key industry suppliers, academic institutions and brand owners echoes the sentiment that businesses need to find their purpose, and indicates that marketing has a role to play in the social development of the country.
Business needs to create a balance between business imperatives and a higher purpose BRAND BRAND INFLUENCER
OWNER
BRAND MEASUREMENT
100 90 80 70 60
87
90
86 71
91
86
96
88
90
81
71
93 76
70
50
74
53
45
40
75
30 20 10 0 Marketers have an obligation to positively influence social change & progress (social attitude & norms)
Marketing has an important role to play in the social development of this country
Marketing has an important role to play in the economic development of this country
Marketers actively invest more in brand marketing initiatives that have a positive impact on a sustainable future for our planet
Marketers actively invest more in brand marketing initiatives that have a positive impact on a sustainable future for people of our country
Marketers have the responsibility to build the national culture and pride, through their brand initiatives
Source: BCSA Brand Barometer Survey, 2013
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3. PURPOSE DRIVES BUSINESS On paper, the case for purpose is growing stronger and stronger. But as Justin Smith, Head of Sustainability and the Good Business Journey at Woolworths says, “you have to convince the finance department”. When it is strategically developed and smartly deployed, purpose has the potential to impact the business bottom line in three powerful ways:
1. Purpose drives growth Apple is an example of the business growth that follows when an organisation is aligned to a common purpose. Apple’s growth in the last decade has been meteoric – the company did not feature in the top 100 US companies (by market capitalisation) in the preceding decade, yet tops the list now. They achieved this through repeating a long process of product design, introduction and success – all driven by a deep commitment to make innovative, robust, beautiful products that delighted customers (Apple’s purpose is ‘to empower creative exploration and self-expression’). Apple’s shareholders have never been their primary focus, but the shareholders have not suffered. Apple is an example of an organisation ‘led by ideals’, a term coined by Jim Stengel in his book, GROW. Stengel shows through a ten year growth study of more than 50 000 brands around the world that the companies with ideals of improving people’s lives at the centre of all they do outperform the market by a huge margin – of nearly 400%. This is powerful evidence that doing the right thing in your business is doing the right thing for your business.
“Our customers want to know who Apple is and what do we stand for? Where do we fit in this world? What we’re about isn’t about making boxes, although we do that well. What Apple is about at the core, its core value, is that we believe people with passion can change the world for the better. That’s what we believe. And we believe that those people who are crazy enough to think they can change the world are the ones that actually do.” Steve Jobs in an employee address, 1997
The Stengel 50 vs. S&P 500 Stengel Top 50
S&P Top 500
382.3%
400.0% 300.0% 200.0%
-7.9%
100.0% 0.0% -100.0%
Jan 00 Jan 01 Jan 02 Jan 03 Jan 04 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11
Source: Millward Brown Optimor *The 42 publicly traded brands within the top 50 were included
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2. Purpose enables meaningful engagement with all stakeholders, from employees to consumers to communities The bottom line effects of an engaged workforce speak for themselves. Companies like Google, Genentech, the Ritz Carlton (and Apple) are examples of how galvanising employees around a shared mission can give companies a competitive advantage. Walmart presents the perfect case for how purpose - and not simply a brand promise – helps customers understand what the brand stands for, and helps employees answer the question ‘why are we here?’. Doing so has created a stronger, more motivated workforce, which, in turn, has made Wal-Mart a stronger, more valuable brand.
3. Purpose inspires innovation Purpose helps organisations be clear about who they are and, perhaps more importantly, who they are not. This strategic clarity enables easier trade-offs and decisions within the organisation. One such decision is when, how and where to innovate. Innovation is an organisational demand these days, required for continued success and growth. But what do we innovate around? Where should the emphasis sit? When an organisation’s purpose and identity are clear, the benefit is focus: Innovation for a reason. Decide what your organisation stands for and believes in, what makes you different, and what difference you are trying to make in your field, for your customers and for your employees. This decision allows you the freedom to resist mimicking the stale ideas and outmoded practices of the competition, and to innovate purposefully.
CASE STUDY At an Association of National Advertisers conference in 2009, Stephen Quinn, then CMO of Wal-Mart explained the difference purpose has made at Wal-Mart. Built on the promise of ‘everyday low prices’, Wal-Mart had grown dramatically. However, after a period during which these ‘low prices’ were seen as a liability by the media and some consumers, Wal-Mart management recognised that its promise was as good as empty without its purpose as support. The company leaders looked back to the original intent of its founder Sam Walton, and decided to make clear that the purpose of Sam’s original offer of lower prices was to help people provide better lives for their families. Paying less for prescriptions meant money left over for longer, more relaxing vacations; paying less for groceries meant more in the bank for a happier birthday party; less for household goods, more visits with grandparents. The ‘everyday low prices’ messaging was removed and replaced with strong brand communications that asserted the company’s purpose. This clear messaging not only helped Wal-Mart employees understand their reason for being, and clarify their roles, but also signified their inherent value to the organisation and its reputation as a brand. Employees knew that as a result of their work, they were making it easier for mums to dress their children in style without sacrificing after-school ballet or karate class, or that food gets put on the table with money left over for family outings. They can directly experience how the company’s purpose pays off, not in profits, but in customer satisfaction, and can see how their jobs affect people’s lives for the better.
CASE STUDY Safaricom’s M-PESA is an example of innovation that is fit for purpose, rather than being a reaction to competitor moves. M-PESA pioneered commercial mobile money transfer globally, and in the process transformed the lives of Kenya’s unbanked with a simple, compelling message: send money home. From its beginnings as a basic text service that allowed people to transfer money to loved ones in remote areas through their handsets, M-PESA has grown to be the most successful money transfer service in the world, and now processes more transactions domestically than Western Union does globally, says GSMA. Kenyans use M-PESA for everything from paying electricity bills to school fees. Those without formal bank accounts can not only transfer money, but also save, invest, insure, pay bills, shop and apply for credit through M-Shwari. Enabling 15 million subscribers, and now handling transactions responsible for 31% of Kenya’s GDP, Safaricom is proof that purpose and profit are not mutually exclusive, and that purpose has the potential to lift your sights higher than the competitive arena, to be a source of real competitive advantage.
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We are at the helm of some of the most progressive legislation around stakeholder impact in South Africa, and many of the organisations we spoke with mentioned a shift in thinking around business responsibility and intent. But the reality is that many organisations are still getting to grips with the idea of being stakeholder-centric, and taking a step further than this takes courage in an economy where the dominant logic is still the bottom line above all else. The belief still remains among many businesses that purpose is a cost, and cannot drive bottom line improvement. While great good can be done through a focused and purposeful application of corporate social funds, we believe that CSI can be a red herring in the challenge to getting the C-suite to think more purposefully. Purpose is by no means something that can be implemented lightly. To change the game requires deep introspection, and a commitment to making real operational changes. Our assessment is that organisations in South Africa and Africa are at various levels of adoption of the idea.
Purpose & Profit are mutually REINFORCING
Purpose & Profit are mutually EXCLUSIVE PAGE 13
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1. Those for whom Purpose = Profit At the top of the pyramid are the organisations for whom purpose and profit are not trade-offs, where the idea that a profit can be made from purposeful action is not only comfortable, but part of the DNA of the organisation.
2. Those for whom purpose is a new way to engage These organisations view purpose as a more meaningful way to engage with consumers. They recognise that consumers are aligning their purchasing decisions with brands that support their values and aspirations, and are gravitating towards brands they can engage with on a human level, brands they can relate to.
CASE STUDY ‘It is our belief that anyone can succeed and we can help everyone succeed, through the use of technology, innovation and human capital’. Jamii Bora Bank began as an initiative of 50 street families who came together to find a solution to their financial problems. With the help of a number of investors, they evolved from a charitable trust, providing micro-finance solutions to Kenya’s low income earners, to become Jamii Bora Bank Ltd. Today Jamii Bora is Kenya’s fastest growing bank, with a dedicated customer base of over 300,000 and 28 outlets countrywide, of which 14 are already fully-fledged Central Bank of Kenya-approved branches. The bank’s main focus is to leverage technology to enable customers and stakeholders to have access to a truly robust financial service that will enhance and transform their lifestyles. As Kenya’s fastest growing bank, they have set ambitious targets, aiming to be one of Kenya’s middle tier banks by the end of 2013. Their goal is to eventually become a pan-African micro financier, and to grow with their customers as they move towards financial prosperity.
CASE STUDY MTN has recently renewed its company vision, having already made great progress in achieving its previous goal of being the leading telecommunication provider in emerging markets .The new company mission ‘to make our customer’s lives a whole lot brighter’, speaks to a more purposeful approach of enriching lives through the connectivity that technology brings. The new vision ‘to lead the delivery of a bold, new digital world to our customers’ supports this sentiment. While not letting go of performance based sentiment that pushes MTN to stay ahead of competition, the new vision and mission reflect a more customer focused mindset that is about understanding needs and aspirations and delivering accordingly.
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3. Those committed to change through CSI Many of the continent’s large corporates fall within this space, where a stakeholder-centric perspective is becoming embedded, but the expression is still through a CSI focus. This kind of purposeful activity benefits society, but is treated as a bolt-on tactic rather than part of the organisation’s broader strategy.
CASE STUDY While community building is not explicitly described as SPAR’s purpose, the retailer achieves an enormous amount of social good through their various community-building initiatives, which is amplified through their brand idea of ‘MySPAR’. Local sourcing is prioritised to preserve jobs and stores are encouraged to participate in social initiatives in their communities. Initiatives are showcased throughout the group to inspire other stores to do the same. The SPAR model of independently owned retail stores means that retail owners are an integral part of the communities that they serve. This translates into social upliftment initiatives that address local needs and have specific relevance to those particular communities. PAGE 15
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“Where your unique talents and the needs of your world intersect, therein lies your purpose.” Aristotle
When comparing yourself to global giants like Apple, IBM and Wal-Mart, finding and living your purpose may seem like a daunting task. But the process is similar to how you’re probably thinking about your business already. At its heart, it is about orientating your business to what drives its environment and employees, and activating accordingly. Finding your purpose requires you to Assess, Align and Activate.
Connect with and understand the higher order needs of your environment and customers
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Check against your heritage, beliefs, drivers, values and strengths internally
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Execute your chosen purpose across employee and customer touchpoints, partnerships, communications, platforms for engagement
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Your purpose needs to be relevant to your environment. In order for purpose to translate into the all-important bottom line benefits you have to be selling something that people want to buy. It requires that you be ‘wired in’ to what’s driving the world, your customers and their communities forward. It also requires an understanding of what your competitors are doing, and what areas you can impact. Even with the best of intentions, you can’t solve all the world’s problems. The nature of purpose requires you to focus and commit to making an impact on one thing, one area where you can concentrate your energies. Ask yourself these questions:
1. What are the most important needs, aspirations and values of your consumers? A powerful purpose is derived from key insights about your category, social context, product and customer. So the first step in determining your purpose is ensuring that you have a clear understanding of the people you are choosing to impact, and the need that you are ideally placed to address.
Ask yourself: i) ii) iii) iv)
What frustrations and setbacks do my customers and employees struggle with every day? Could your business be the one to make them feel safer or better nourished? What communities do I impact through my business, my customers and my employees? The average employed South African supports three unemployed dependants. Is there a way your business could ease that financial and emotional load for your employees and customers? What societal issues negatively impact on my business? There is business benefit in helping to fix the education system, or in innovating to ameliorate labour relations. What unique gifts, skills, opportunities and abilities do my stakeholders and context possess? Woolworths celebrates South Africa’s unique biodiversity in their conservation efforts, for example. There are numerous local crafts, talents and characteristics that can be championed by purposeful brands too.
Bernice Samuels, Chief Marketing Officer at FNB explains that while their social conscience extends beyond their industry to helping the country as a whole, their commitment starts with being excellent in terms of banking, answering customer and community needs and allowing FNB to play a role in enabling efficiency in modern life, which in itself has an impact in terms of social context.
2. Is it sustainable? A brand purpose should connect to real issues that you see in your community or society.
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Think in terms of:
• • • •
Long term societal issues NOT quick wins Genuine stakeholder needs NOT marketing buzz and trendy causes The business journey NOT PR blitzes Measurable impact NOT vague goals and intentions
3. What kind of a difference do you want to make? This is a particularly important question to ask, as it requires you to be honest about your intentions as an organisation, as well as your ability to deliver on those intentions. Deciding how far you would like to move the needle on a particular issue also helps to guide your decisions when it comes to activating your purpose, for example: I. II. III.
What is the level of investment you’re prepared to put in? Which partners should you align with to leverage your impact? What metrics will you use to measure your success?
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4. Is it ownable? Owning your purpose means bringing meaning to life in unique and interesting ways which could only be you. Finding the purpose that sets your business alight will lead away from generic category delivery. Companies in the same industry should express their purpose platforms in different ways because it connects with their core strength and intent. For example Amazon exists to ‘enable freedom of choice, exploration and discovery’, where Zappos exists to ‘deliver happiness through ‘wow’ service’, Calvin Klein exists to ‘define modern luxury’, where Diesel exists to ‘inspire imagination and endless possibilities in style’. A winning purpose is about understanding the multifaceted nature, motivations and needs of your customers and their environments, leveraging your unique abilities to address these in a meaningful way, and then stretching your organisation to achieve a bigger business intent.
CASE STUDY PURPOSE BASED ON INSIGHT OMO is a great example of a brand that understands the values of its target sectors effectively and has developed a brilliant strategy for creating the right value in the minds of its consumers. The detergent category, in general, takes the stance that ‘dirt is bad’ and the reason for the existence of washing powder is to banish dirt. Based on a great consumer insight, OMO, however, has taken the stance that ‘dirt is good’. Consumer research revealed that one of the most important values for human beings worldwide is that they want to create better opportunities for their children than they were given in life. People want their children to be wellbalanced, outgoing and proactive so that they can go out into the world and become successful. Because children learn through play, it is important to encourage them to go out and learn about the world and life so that they can mature into inquisitive, friendly adults. OMO used this valuable insight about their consumer, identified their key strengths, and found an interesting way to leverage them into social good. Their communication suggests that being dirty is, in fact, a good thing, because it means your child is learning and growing. This isn’t what you’d expect from a detergent brand, but makes a lot of sense when engaging with people on a more human level, and promotes the healthy development of young children. Cultivating a generation of inquisitive children is an extremely meaningful purpose and is relevant to the brand’s strengths.
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The right purpose allows you to tell a story that will encourage people to connect with your brand. However you choose to define your overarching purpose, it should be rooted in what you do best from a business perspective, and what you hold dear as an organisation. The old marketing adage remains true; ‘promising something that you are not geared to deliver is a recipe for disaster’. The right purpose for your organisation means identifying your present strengths and values, and delving into the past of your organisation to figure out your strongest reasons for existence.
1. Rediscovering your history and heritage In the race to understand the ever-changing consumer, out-compete the competition, grow the business and increase the number on the bottom line, it is typical for an organisation to make decisions that lead it down paths different from what was originally intended when it was conceived. At this point, amid the layers of marketing messages, and internal rallying cries, it becomes difficult for the organisation to recognise who it is separate from the competition. At times like this, and in fact at any point when things seem vague or difficult, it’s useful to delve back into the history of the company and see what the motivation for starting the company was. Often there is something inspiring and insightful there, an ideal that needs to be dusted off and re-assessed in the current context, and that can prove useful in helping to define your organisational purpose now. Liberty is a great example of this in the South African environment; back in 1957 Donald Gordon’s belief was that everyone had the right to retire with dignity, and Liberty was born with the intention of providing guidance to people to allow them to make the right choices that got them to a secure retirement. This sentiment is particularly relevant in today’s times, and has been used as a guide for the modern day Liberty as it expands its portfolio of services.
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2. Uncovering your values and passions Authenticity is critical for purposeful business. Writing down organisational values that sound good achieves nothing even Enron had those. Purpose needs to come from the real character, values and philosophy of the company or it will not serve the company in the long term. Identify the genuine core values and beliefs in your business. Ask yourself: What motivates our people? What are our people passionate about? The difference between an allocation on your corporate social investment budget, and a driving, motivating guide for your organisation’s action, is passion.
“All too often marketers make up a brand’s purpose based on what they think the market wants. What the marketplace wants is honesty and genuineness. When you are real, people know it, feel it, and buy it.” Joey Reiman
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3. Mapping your organisational strengths Purpose will only have impact if it achieves social good through competitive advantage. Answering the following questions will help define a purpose that is right for your business: •
WHAT ARE OUR GREATEST STRENGTHS? This could involve anything from distribution networks to quality products to an unbeatable price point.
•
WHAT DO WE OFFER AND HOW DO WE PROVIDE VALUE? What is it about your products and services that your customers enjoy? How do you currently delight them?
•
WHY DO CUSTOMERS CURRENTLY BUY FROM US? Try to think beyond the narrow functional benefit you offer to your customers, and discover what real need you are meeting. For example, are customers buying your data bundles or are they buying a chance to stay informed, stay connected with friends? Having this kind of simple insight as reference will help direct relevant innovation.
CASE STUDY MAPPING TO ORGANISATIONAL STRENGTHS Philips’ purpose is to improve the quality of life through meaningful innovation. They address the characteristic of an increasingly complex world with a brand promise of ‘sense and simplicity’, which combines customer insight with a capability for technology integration and product design, to develop easy to understand and easy to use solutions that make people’s lives easier. Their ‘social good’ of increasing the quality and simplifying the complexity of modern life can be interpreted across customer sets and industries, from technologically advanced solutions such as their HeartStart defibrillator to simple innovations such as their solar powered lighting centres, to be introduced across rural Africa by 2015. Philips saw opportunity in the fact that over 500 million people in Africa have no access to electricity, and that a basic solution has the potential to strengthen Africa’s economic, social, educational and cultural activities. The LED lighting centres are about 1000 squared metres in size, operating using highly efficient battery and solar technology. Focused on schools linked to villages and towns, the centres will provide communities with powered areas that can be used for sports, education, healthcare and commerce. Phillips already sells these centres as temporary lighting solutions in the developed world.
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Once you have found the right purpose for your business, aligned to your organisation and your environment, it’s time to activate it inside and out – so that you can use it to drive change in your business, the category and the world.
INTERNALLY The downfall of many brands is the difference between promise making and promise keeping. Delivering a powerful purpose requires employees to understand it, feel it and believe it.
1. Lead from the front The role of leadership in embedding purpose can’t be overstated. Without leadership passion and action, a message about purpose is simply another internal campaign or mission statement. Powerful leaders have inspired purposeful organisations – as evidenced by Steve Jobs’ Apple, Akio Morita’s Sony or Donald Gordon’s Liberty – but often this purpose is overly reliant on the personal dreams and charisma of the founder. This historical legacy is important when defining an organisation’s purpose, but to avoid the trap of the strong personality ‘carrying’ the purpose, it needs to be embedded in the organisation, and embraced and lived by the leadership, whether the business was grown from scratch or inherited from an outgoing CEO. To do this requires capturing the purpose in a simple, artful and inspiring way and ensuring that new leaders live, breathe and love it. Belief in the organisational purpose needs to be a key requirement for leadership appointments, and it is the role of leadership to keep this purpose alive throughout the organisation, driving innovation and creating powerful cultures that outlive any singular person. Lead by example to enlist loyalty and motivate people to be a part of the culture. Employees will better understand their role in delivering the purpose and will feel that what they are doing really matters.
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CASE STUDY LEADING FROM THE FRONT Bob McDonald, the previous CEO of P&G believes that purpose is what has made their business successful. McDonald himself joined the company because its values - “to touch and improve lives” - resonated with him and his aspirations. He was raised to believe that a person is measured by what they do for others, and this is how he measures his brands and employees. McDonald believes in investing in a future profit despite what it may mean in the short term - to choose “the harder right instead of the easier wrong.” He believes that multi-national companies like P&G are in the privileged position of being capable of solving societal problems, and that there should be a sense of responsibility amongst global business leaders to find a way to do more. This philosophy is extended throughout the organisation, and P&G’s individual brands are driven by purpose as much as the corporate brand is – each with their own unique way of improving lives.
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CASE STUDY TRACK AND MEASURE TO EMBED PURPOSE Woolworths’ Good Business Journey aims to ‘make a real difference in key areas affecting South Africa and the world’ (energy, water, waste, sustainable farming, sustainable fishing, transformation, social development). In 2007, a 5 year plan for the journey was formalised, which outlined clear goals and objectives that would track and measure the implementation of their strategy to become a more sustainable, more responsible organisation.
2. Inspire employees to make it real For purpose to make a difference to the organisation and be noticed externally it has to motivate people, give them something to strive for and to bind them together. Getting this right requires articulating it in a rallying call or a ‘statement with a verb’ that is easy to understand, and engaging to employees. It should be knitted into all ongoing communication that highlights the importance of the work they do, celebrates their contributions, and reports back on progress on the defined intentions.
3. Look for value-fit when hiring Training can help staff deliver on functional values, but it isn’t easy to change their emotional values to fit your business. You can’t force employees to act on something they don’t believe in. • • • • • • •
Woolworths understood that the success of the Good Business Journey was dependent on whether it became a driving force of internal culture: if employees can understand the purpose of the programme, and their role in bringing it to life, they become passionate living testaments of the journey itself. The Good Business Journey breaks down into 220 objectives with big programmes for each department, along with scorecards to evaluate employees’ performance in delivering on the strategy. One of the ways store managers are measured, for example, is according to how many plastic bags are sold in their stores. In every store, a passionate individual is nominated as a Good Business Journey champion, and equipped with the knowledge they need to advocate the programme and drive its progress internally. The company is also very clever about keeping its consumer base appraised about the ways in which it is delivering on its sustainability commitment communication around its importance and how they are progressing against these goals is subtly woven into every aspect of the brand experience (in store displays, pack descriptors, mass communication). Woolworths is constantly measuring external perceptions of their Good Business Journey success through customer feedback systems and third party validation, partnering with other organisations who can objectively and credibly track their progress. They act with transparency, openly sharing their challenges and failures with one another so that they can continue winning at the things they’re doing right, and grow in the areas where they’re under-delivering. A conscious monitoring and communication of progress has embedded the programme into the organisation – a recent review of the 2007 Good Business Journey objectives revealed that 80% of the goals had been met.
Challenge recruitment processes Be clear on values required for all positions Give equal weighting to value-alignment and skills alignment when assessing applicants Pay close attention to their motivation for applying Look for demonstrated commitment to the values that align with your business Be clear on the business purpose in job interviews Hire people who want to know how their role contributes to the purpose and meaning of the organisation
4. Track and measure to embed purpose in the culture Purpose needs to become a natural part of how your organisation does business. But for that to occur it needs to become part of how you measure the organisation’s success. Determine the metrics to measure if you are behaving purposefully. Build these metrics into individual and departmental assessments and reviews, and reward those whose activities and achievements help deliver on the purpose. Regular feedback on how you are doing as an organisation shows that purpose isn’t just a passing fad, but there to stay.
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EXTERNALLY Communicating externally around purpose can be tricky water. With ‘doing good’ being a common base for messaging these days, it’s difficult for customers to sift through what’s real and what’s not. It’s not what you tell customers that matters, but what you do. Do first, and then talk about it. Strike a balance between being humble and committed at the same time.
1. Show purpose at every touchpoint The most obvious, tangible and important means of communicating externally is through the range of touchpoints where your stakeholders interact with your company. If your purpose isn’t evident here, even your best intentions can be labelled as superficial. Communicate your intent with consistency across all touchpoints. Purposeful brands integrate functional benefits (price, performance and convenience) with social and collective benefits to craft consistent brand messages, images and experiences, and live this brand in every action, product, service and interaction with customers.
2. Prove you’re making progress Showing tangible manifestations of purpose is important. Track and measure your impact, and choose interventions that will get communities talking. As Justin Smith from Woolworths says, “it’s crucial that you are able to show progress to gain people’s trust.” Woolworths practices this by being transparent about what works and what doesn’t, and by using third parties to validate their results to show credibility.
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“It’s crucial that you are able to show progress to gain people’s trust.” Justin Smith, Head of Sustainability and Good Business Journey, Woolworths
3. Collaborate for higher impact Partnering can be a strategic tool for achieving impact. It provides the opportunity to amplify your intent beyond what is capable by your company alone, and many companies are even working with ‘frenemies’ (businesses with which you sometimes compete and sometimes support) to help achieve something greater in the world. Partners can bring expertise, resources, creativity and reach that you might not possess alone, and can enable the impact of your investment to be multiplied. Your employees and customers might also be considered partners, and are the key to getting purpose right. Tapping into their realities, and their experience of the most important needs of society will bring rich insight which you might not have considered. Collaborate with your staff and encourage them to share their individual opinions to engage them in brand purpose.
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CASE STUDY COLLABORATING FOR GREATER IMPACT Pampers, P&G’s brand of diapers, is about caring for the happy, healthy development of babies. It has extended its ability to make an impact in the healthy development of babies by partnering with UNICEF to run a “1 pack = 1 vaccine” programme that raises funds for tetanus vaccines with each purchase of a pack of Pampers. So far, the brand has raised funds for 300 million vaccines in 32 countries, reaching 100 million mothers and their babies to help eliminate maternal and neonatal tetanus. Pampers is confident that by 2015, neonatal tetanus will be a thing of the past. According to the Harvard Business Review, the campaign has delivered year-on-year growth for P&G’s brand, even in its toughest markets. The Pampers story illustrates how being purpose-driven can transform brands to make a difference in the world without losing out financially.
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“At the heart of branding is the ability to listen, to respond, to communicate back, to show that you’ve heard; and this is what makes purpose about brand – facilitating the dialogue.” Nicola Kleyn, Associate Professor, GIBS
4. Think engagement, not ads The name of the marketing game today is engagement. Successful brands are those that engage customers in conversation and recognise that they are players in the customer’s world rather than the other way around. Brands are characters that customers choose to interact with, or not. They are no longer avatars for the corporate profile. Engage customers by facilitating experiences, real interaction and relationship-building activities, rather than focusing on messaging or transactions. Engagement platforms such as digital media, feedback systems, crowdsourcing projects and experiences are incredibly important channels for communication about purpose, as they can engage customers outside the purchase process and help to package the value being offered beyond the product being sold.
CASE STUDY ENGAGEMENT EMBEDS PURPOSE FNB is an inspiring local example of the clever use of external communication and engagement platforms to communicate and involve communities of customers in their purpose. FNB’s purpose stems from their vision and business intent; ‘to be a good business, helping to create a better world’. The platform of ‘help’ is central to how value and social good is delivered at FNB, be this through innovation in banking to deliver an excellent functional service, or through the application of the concept of help in the social context to enable the vision of contributing to a better world. FNB has understood the value of participation amongst today’s customers, in this case particularly in demonstrating the power of help to drive positive social change. The recent ‘You can help’ campaign cleverly used engagement platforms to bring like-minded people together to do great things through a shared vision that ‘help’ can build bridges, create hope, drive change, and build a more passionate nation. The campaign linked viewers to an online site that crowdsources inspiration and encourages collaboration for good. Leveraging the power of online communities, FNB inspired people to support one another by providing a space for ordinary South Africans to share their stories of help - A Mentor Can Help, Soap Can Help, Dancing Can Help, for example - stories that demonstrate how powerful we can be when we work together for something we believe in. The collection of stories, videos and images encourages South Africans to come together in their communities for a common purpose. The blog also encourages first-hand involvement by sharing invitations to events, programs and charity drives where people can get actively involved in making a difference.
Bernice Samuels, FNB Chief Marketing Officer
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Characteristics of a well thought through purpose platform MEANINGFUL & COMPELLING Your purpose should be meaningful and compelling to all stakeholders. Consumers are paying attention to how their brand decisions can improve their lives in a meaningful way, aligning their purchasing decisions with brands that support their values and aspirations, and gravitating towards brands they can engage with on a human level.
UNIQUE Differentiation is a fundamental objective in marketing as it allows consumers to distinguish your brand from others in your category. A meaningful and compelling purpose becomes less powerful if it doesn’t stand out. Your brand purpose should be based on something ownable and distinctive.
RELEVANT TO YOUR MARKET In order to connect with your consumer, your brand has to be focused on understanding people and what is going on in their lives. It is imperative that you are not only relevant in a culturally complex nation, but that you delve into individual mindsets and perspectives that cause people to feel and act the way that they do. Relevance is key for ensuring your brand resonates with consumers.
RELEVANT TO YOUR CATEGORY, PRODUCT OR SERVICE Brand purpose should amplify the strengths of your organisation, and be believable in the context of your category and product or service. Purpose only makes sense if it can be seamlessly integrated into your brand and business identity. In order to be seen as a trustworthy brand, purpose cannot be force fit – it has to feel right.
AUTHENTIC A brand purpose needs to be built around an authentic brand truth. If your purpose is inauthentic and does not come alive beyond a philosophy, you will not connect. It’s about being real and genuine so that people trust your brand and feel compelled to build a relationship with it. Brands need to connect with themselves first.
DELIVERABLE A brand is a promise kept. It is critical that your purpose is something that can be delivered across all points of contact with your stakeholders. It’s no good having a meaningful and purposeful brand culture if it is contradicted in your internal behaviour or your engagement with the outside world. It’s about having real brand proof points that are aligned with your purpose.
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Purpose isn’t a fluffy nice-to-have for the marketing department; it’s a sound business principle. The context of today’s marketplace demands it – from expanding into emerging markets, to connecting with meaning-starved consumers, to motivating and attracting top talent. Acting ‘on purpose’ enables businesses to deliver more value to their stakeholders, and this is ultimately evident in the growth of their bottom line. Finding your organisational purpose, and aligning your business behind it, will transform what you do, give meaning to your work and turn your brands into something that the world actually cares about. The process for articulating it and bringing it to life throughout your business might be intensive, but the benefits are potentially great. We hope we have provided a useful guide to getting purpose right. By assessing your environment, aligning your organisation behind its purpose and activating it inside and out, you can catapult your business into the realm of purpose. At the end of the day, it’s about rediscovering why you do what you do, and the difference you hope to make in the world.
Good luck!
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References • Interview with Benjamin Mophatlane: CEO of Business Connexion, June 2013 • Interview with Bernice Samuels: Chief Marketing Officer FNB, May 2013 •
Interview with Justin Smith: Head of Sustainability and the Good Business Journey, Woolworths, April 2013
• Interview with Mike Prentice: Group Marketing Executive at SPAR, June 2013 • Interview with Nicola Kleyn: Associate Professor at GIBS, May 2013
• Hewitt, A. (2013). GameChangers 500. Available: http://gamechangers500.com/ Last accessed 2 April 2013. • Johnson, J. (2012). A Brand with Purpose: Pampers. Available: http:// thinkseedodifferently.blogspot.com /2012/06/brand-with-purpose-pampers. html Last accessed 1 April 2013 •
Knowledge @ Wharton (2012) Declining Employee Loyalty: A Casualty of the New Workplace Available:http://knowledge.wharton. upenn.edu/article.cfm?articleid=2995 Last accessed 6 March 2013
•
Baldoni, J (2011). How to Instil Purpose : Harvard Business Review Network. Available: http://blogs.hbr.org/ cs/2011/11/why_purpose_matters. html Last accessed 6 March 2013
* McLeod, L.E. (2012) How P&G, Southwest, And Google Learned To Sell With Noble Purpose. URL: http:// www.fastcompany.com/3003452/how-pg southwest-and-google-learned-sell-noble- purpose
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Bonchek, M (2012) Three Steps to Generating Social Gravity: Harvard Business Review Network. Available: http://blogs.hbr.org/cs/2012/04/ three_steps_to_generating_soci.html Last accessed 6 March 2013
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Porter, M and Kramer, M. (2011). Creating Shared Value. Harvard Business Review. January and February 2011 (1), 62-77.
• Cone, C (2013) An Argument For Purpose-Driven Business: Here to Stay? Available: http://purpose.edelman. com/an-argument-for-purpose-driven business-here-to-stay/ •
Edelman goodpurpose® 2012 Global Consumer Survey. Available: http:// www.slideshare.net/secret/4FBiBICpOi DK3r
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• Reiman, J. (2012) Purpose: How Truly Great Leaders Measure Their Companies. URL: http://www. fastcompany.com/3003775/purpose-how truly-great-leaders-measure-their companies Last accessed 3 April 2013 • Reiman, J (2013). The Story of Purpose. New Jersey: John Wiley & Sons, Inc.
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Dhatchani Christian
Strategy Director Yellowwood Johannesburg Dhatchani is the Strategy Director at Yellowwood’s Johannesburg Office. She is a strong supporter of the notion that business can help to change the world for the better, and sees purpose as a means to do so. She hopes to be part of the journey that sees South African business leaders realise that purpose and profit need not be mutually exclusive.
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Nicole Velleman Strategy Analyst Yellowwood Johannesburg
Al Mackay Content Strategist Yellowwood Cape Town
Nicole joined Yellowwood as a Strategy Analyst in 2012. She has become increasingly sensitive to our continent’s enormous unmet societal needs, but remains optimistic that these challenges present wonderful opportunities for purposeful thinkers to solve them in a way that is also commercially advantageous. Nicole is always on the search for meaning, and believes that purpose is one of the most powerful tools for growth and sustainability in a meaningstarved marketplace.
Al is a massive believer in the power of purpose to motivate people and drive organisations forward, and is excited to be part of a changing sentiment in business towards doing well by doing good. He is Content Strategist for Yellowwood, based in the Cape Town Office.
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