Recent research impressively documents what we instinctively feel: brands that represent an ideal have more-committed employees and a markedly better financial outcome. Nick Cooper explains
Have you ever reflected on the fact that great businesses own great brands, and great brands belong to great businesses? It’s no coincidence, and there are few exceptions. Perhaps one exception is the British car industry, which is littered with fabulous, sought-after brands. But in the past few years they have been brought into expertly run businesses, and the business results – with Land Rover making more profit proportionate to its size than any other car maker in the world – are clear to see.
Why do businesses own brands? When you boil everything down, brands exist for one reason and one reason only: to enhance the ability to make profit. Otherwise every business would be churning out commoditised products and services and everyone would be competing purely on price.
As it is self-evident that great businesses that own great brands compete on many levels other than price, it is clear that brands are performing a valuable role in delivering enhanced profitability. The trick is to understand how to build great brands that deliver worldclass levels of profit.
So, over the past three years, Millward Brown has been working with Jim Stengel (who made his name as the highly successful Global CMO of Procter & Gamble) to produce GROW, a definitive study of business growth that seeks to unearth the underlying factors that characterise the unparalleled growth of the world’s 50 highest-growth brands. We call this the Stengel Study.
This growth was measured in two ways: firstly, we identified those brands that have created and grown the strongest brand equity; and secondly, we looked at those brands that have grown their financial value the fastest, relative to their respective categories. Both of these metrics were investigated over a 10-year time span to ensure that both economic boom and bust were taken into account.
The outstanding evidence behind this group of companies is demonstrated by the fact that their combined business value has outperformed the S&P 500 by almost 400%.
The secret of success
The core discovery of this work was that the brands that made the Stengel 50 were all driven by a clearly identifiable brand ideal, that is: a business’s essential reason for being, a shared goal of improving people’s lives that defines the higher-order benefit it brings to the world.
The brand ideal of improving people’s lives is the unifying idea that enables the Stengel 50 businesses to recruit, unite and inspire all those they touch, from employees to customers. It is the brand ideal that connects the core beliefs of the people inside a business with the fundamental values of the people the business serves.
It is the brand ideal that enables these businesses to excel in terms of growth and ultimately deliver superior profit. This principle extends across all boundaries – industry categories, B2B, fmcg, online, retail, services, geography, scale and age of business.
For example, if we take the most valuable brand in the world today according to Millward Brown Optimor’s BrandZ top100 ranking, Apple, we can see that the success of the brand is intimately connected to the growth in business performance. More particularly, it is clear that the brand is not built on the need to manufacture the latest and trendiest consumer gadgets in a fiercely competitive market. Its brand ideal has a much higher purpose: it empowers people to express themselves. As a result, Apple has created new categories for self-expression, and these are markets that it largely dominates.
Similarly, IBM exists to help build a smarter planet, and everything it does is routed towards achieving this purpose. IBM invites consumers, thought leaders, and employees to rethink how we can make the planet smarter, whether it’s by addressing traffic congestion or using energy more efficiently.
Or take Red Bull, where its brand ideal is to uplift mind and body, and in doing so energise the world. This brand ideal is felt throughout the organisation and is manifested in the company culture, its offices and vehicles, the company values and the behaviour it rewards as well as in all its marketing and consumer activation.
Above all, the Red Bull brand ideal is manifested in its people, where it has set unique hiring guidelines: instead of recruiting people with beverage industry experience, the focus is on athletes, DJs, and former Red Bull student ambassadors – people who believe in the ideal.
Brand ideals such as these are enabling organisations to grow and outperform their competitors. Companies that are devoted to a brand ideal establish a more important purpose which transcends purely product or service function considerations. It provides an overarching purpose for everything it does.
Millward Brown’s research shows that brands that adjust their thinking as to ‘why’ they are in business rather than ‘what’ they are in business for, experience higher financial growth and increased equity value. In other words, rather than businesses asking ‘what product or service do we need to create or maintain to ensure customer loyalty?’ questions such as ‘why does our brand exist and what impact are we seeking to make in the world?’ and ‘what is our inspirational reason for being?’ are perhaps far more relevant.
Having a clear and compelling brand ideal that speaks to universal human hopes and values allows an organisation to communicate its beliefs and messages both internally to employees and externally to customers and consumers. This shapes the perception and desire to work for such companies, driving productivity, ideas, enthusiasm and ultimately profit.
Perhaps even more intriguingly, not only was the concept of a brand ideal common to all in the Stengel 50, but these ideals all fell into one of five areas. These are: eliciting joy; enabling connection; inspiring exploration; evoking pride; and impacting society.
Significantly, the relationship between the brands and the fields is not constrained by industry category, geography, age or size. For example, Jack Daniel’s is rooted in ‘evoking pride’ while Johnnie Walker is about ‘inspiring exploration’ – same category, same adherence to an ideal, but very different heritages and perspectives on the world.
What our research shows is, for many, a validation of common sense but the solid evidence is reassuring. And there are other advantages: positioning a brand towards a higher purpose opens up opportunities to plan in a more expansive field create new product and service offers, and move up the value chain and justify a more premium price.
That may be true. However, I would emphasise that the study looks at not just high-performing brands but at the highest-growth brands in terms of equity and financial performance.
Within the Stengel 50 there are three examples that stand out because they represent the transformative power of a brand ideal. Wonderful though it is to start from a brand ideal and pull it off from day one – and there are plenty of examples from Apple to Zappos – it is even more impressive to change the direction of an established brand and take it to another level of success. Moreover, some of these examples come from categories that are really quite mundane; there is no innate category ‘sex appeal’ that means the task of creating a brand ideal is in some way easy.
Transforming Brand Ideals
The first example of a brand that used its brand ideal to transform the brand and the business is Pampers. What could be more prosaic than nappies? The fact is that Pampers, while already being a highly successful brand, shifted its focus from trying to sell the best paper technology and the most disposable nappies to helping mothers care for their babies’ and toddlers’ happy, healthy development.
In so doing – by looking beyond product performance and a transactional relationship with the consumer – Pampers opened up a series of almost limitless possibilities to strengthen the bond between the brand and consumers and, at the same time, almost endless possibilities for growth and profit.
Secondly, Dove. Again, personal care is not the highest interest category ever and Dove had already made a considerable impact on its market through positioning itself on the basis of gentle but effective care for your skin. But, as with Pampers, Dove moved forward to create a new brand ideal, which is ‘to celebrate every woman’s unique beauty’. By using this ideal, the brand has succeeded in going beyond individual consumers to help bring about an evolution in how society as a whole thinks about beauty.
Thirdly, Emirates. I think air travel still has sex appeal, but Emirates has emerged from a very crowded market to evolve from being a good regional player into one of the pre-eminent global carriers in terms of product and customer service offer, value, destinations and comfort.
Given its location, and the everincreasing range of modern jets, there was every reason to suppose that the Gulf would be permanently by-passed on routes between America, Europe and Asia. But the vision of Emirates saw past these challenges and its brand ideal of ‘connecting people with the world through a new lens of perception’ has helped create a truly exceptional business.
What does this mean for you?
The highest-growth brands have always used their ideals. Some brands were organised around an ideal from their inception, while others chose to consciously and deliberately reorientate their businesses around a higher purpose. We believe that all brands and businesses, whether they are presently driven by the loftiest ideals or the most mundane purposes, can learn from studying brands like those in the Stengel 50.
Consider the following questions: Why are you in business? Does your company operate around a brand ideal? If not, did it ever? Your company may have been founded on an ideal that will still be relevant once it’s unearthed. Consider your company’s heritage. What did your founders believe in? Why did they get into business? What need did they set out to address?
Is your purpose clear? Whether or not your company offers a higher-order benefit to the world, everyone in your organisation should have a clear understanding of your brand’s purpose. What functional and emotional benefits do you convey to your users? Why does your brand exist in a category where customers and consumers have other options?
Is your organisation aligned around your ideal? Take a look at your organisation’s structure. Does it facilitate the expression of your brand ideal? Do employees in all functions understand it? And what help do they receive in order to live it? Is the achievement of short-term goals balanced against the long-term fulfilment of the ideal?
Brand Ideals Drive Business Performance
The results of our work always come back to the same key findings: that brand ideals drive the performance of the highestgrowth businesses; and these are rooted in one of five fields that address fundamental human values.
Millward Brown’s research provides solid evidence of what many of us intuitively understand – that a brand ideal, aiming high, is an essential element in focusing and harnessing the efforts of an organisation to achieve world-beating outcomes. It is what helps set apart a great business from a good business.
Above all, our work highlights many learnings around that most elusive of goals – growth. And the most attractive facet is that it can apply to any business, irrespective of longevity, category, geography or size.
In an era where growth is hard to come by, particularly in more mature economies, shining a light on one of the critical drivers of growth is something that can only be of help to brand owners everywhere.
Nick Cooper is managing director of Millward Brown Optimor, the consultancy division of Millward Brown.
‘Grow: How Ideals Power Growth and Profit at the World’s Greatest Companies’,
Jim Stengel, Crown Business, 2012.