MaRS Library Purpose: What it is and why it’s important for your brand
Why are you here? This is the question purpose asks.
Purpose is about social impact. It’s not about making money or being a leader in your category. Having a purpose acknowledges that you are not operating in a moral vacuum. It recognizes that your business has a social and environmental impact on your customers, your employees and the people who live in the communities in which you operate, and that you need to take responsibility for that.
This runs counter to current corporate orthodoxy, which suggests a company is an amoral actor whose only purpose is to make a profit. Even though there is no basis for this in law, 40 years of deregulation, globalization and financialization have made it gospel. The broad socio-economic impact of these policies has been increasingly negative for large parts of society: income inequality, wage stagnation, a shrinking middle class, loss of employee bargaining power, the diminution of social programs, environmental devastation and a bruised democracy struggling to survive in the face of corporate wealth and power. These are the results of a business culture with no other purpose than to make money.
Brands that have a social purpose outperform those that don’t
There are compelling business reasons to consider purpose. Brands that have a social purpose have been demonstrated to outperform those that don’t. According to a 2016 Korn Ferry study, consumer companies that focused their employees on the organization’s purpose boasted annual growth rates that were nearly triple the annual rate for the whole sector. The study claims purpose-driven companies have four times the compound annual growth rate of companies in the S&P 500 Index. Ninety percent of employees in these companies feel engaged, compared to 32% in other companies. In a separate study, Korn Ferry also reports that purpose-driven companies with humanistic values outperformed the S&P 500 14 times over 15 years.
The 2019 Edelman Trust Barometer found that employees expect prospective employers to join them in taking action on societal issues (67%), akin to their expectations of personal empowerment (74%) and job opportunity (80%). Nearly six in 10 look to their employers as trustworthy sources of information about contentious social problems and important topics like the economy (72%) and technology (58%).
How do customers view social purpose?
- Delivering on its promises (66%)
- Being transparent about where it sources its materials, how it treats employees fairly, and so on (66%)
- Having ethical values and demonstrating authenticity in everything it does (62%)
- Standing for something bigger than just the products and services it sells (52%)
These statistics reveal a good deal about customer motivation. In the face of this, if you then craft a purpose simply to be more profitable, well, you may as well not bother. When profit is your company’s sole raison d’être, your ensuing behaviour may contradict whatever your statement of purpose claims and customers will know the difference.
Purpose-driven organizations that thrive: Four main conditions
Korn Ferry identified these four key conditions that make up the foundation of thriving purpose-driven organizations:
- The CEO and others lead based on values and purpose and use these to make decisions.
- People are the top priority. Companies invest in employees and communities to drive growth.
- The business culture is reflective of human communities, as people bring their whole selves to work.
- Practices to achieve the corporate purpose exist in all parts of the organization, revealing a pervasive commitment to the purpose.
Examples from the Accenture study of companies that have thrived through purpose:
KIND Healthy Snacks has become the third-largest snack bar maker in the world, with gluten-free, non-GMO products that taste great. The company’s commitment to improving public health with nutritious snack foods, as well as to a new level of transparency to ingredient sourcing, has resonated with health-conscious consumers.
IKEA was already a leader in environmental sustainability and recently broadened its social impact by committing to employing refugees at production centres in Jordan. This effort is part of the company’s long-term goal to employ some 200,000 disadvantaged people around the world.
Unilever has seen, first-hand, the tangible value of making purpose a core driver of growth and differentiation. Nearly half of its top 40 brands focus on sustainability. These “Sustainable Living” brands, including Knorr, Dove and Lipton, are good for society. They are also good for business—growing 50% faster than the company’s other brands and delivering more than 60% of Unilever’s growth.
How to craft your company’s purpose statement
The following exercise is designed to help you craft a clear and compelling brand purpose statement.
Exercise: Discovering and defining your purpose statement
Your statement of social purpose should convey how you will improve the lives of those you serve.
Take Warby Parker, for example. They state, “We believe that everyone has the right to see.” Putting its money where its mouth is, Warby Parker’s Buy a Pair, Give a Pair program has provided over five million pairs of glasses to the 15% of the world’s population that doesn’t have access to corrective eyewear. Warby Parker partners with non-profits like VisionSpring to ensure that for every pair of glasses sold, a pair is distributed to someone in need. That’s social impact.
Here are some other examples of brand purpose—some good, some not.
|Etsy:||“To reimagine commerce in ways that build a more fulfilling and lasting world.”|
|Unilever:||“The highest standards of corporate behaviour towards everyone we work with, the communities we touch, and the environment on which we have an impact.”|
|Seventh Generation:||“To inspire a consumer revolution that nurtures the health of the next seven generations.”|
|Chobani:||“To make universal wellness happen sooner.”|
|KIND:||“To make the world a little kinder.”|
|Plum Organics:||“To deliver nourishing, organic food to our nation’s little ones and to raise awareness and advance solutions for childhood hunger and malnutrition in the United States.”|
You’ll see that some are less clear than others, and some are more compelling. Some almost seem intentionally vague.
The brand purposes listed for Etsy, Chobani and KIND are a bit too vague. Plum Organics, on the other hand, is clear about its commitment to eradicating child hunger. Seventh Generation wants to have a lasting impact on the future of world health.
Your purpose statement needs to be:
• Clear—clarity encourages accountability
• Compelling—it should stir the emotions
• Short—so people can remember it
• Authentic—whenever possible, purpose should trump profit
How to write your brand purpose statement
You need to answer one question: How will you improve the lives of those you serve?
Start with two large sheets of paper.
On the first, write a concise (repeat: concise) description of your product or service.
Across the top of the second, list who your business serves. Include customers, employees, stakeholders and other people whose lives you impact (use extra sheets if you need to). Leave room to write down as many answers as you can.
Under each group of people you serve, ask yourself how your product or service is improving their lives. Try to use sticky notes as they are handy because they can be rearranged later during the refining process. Write down as many answers as you can, but don’t worry if they don’t seem right yet. The most important thing at this stage is to keep writing for about 20 minutes. You should have dozens of answers.
Once you have filled the columns, step back. Looking at what you have written, you will find some responses are more emotionally engaging than others. Mark these.
If you have been using sticky notes, you can now cluster the answers that sound the same. You will likely generate anywhere from two to 10 clusters across all the answers. Once you’ve done this, try to reduce each cluster to a single phrase.
Look at what you’ve written. Compare it to the items you marked as emotionally compelling. Keep refining the content until you have arrived at a statement that resonates most deeply and emotionally with you and your colleagues.
Check your statement: Is it clear? Is it emotionally compelling? Is it short and to the point? And is it an authentic reflection of who you really are? You will know it’s right by how it feels. It should be stirring and inspiring. If it’s not, you’ll need to revisit the process.