In 2015, ‘purpose’ is everywhere. It’s a key part of The Marketing Society Manifesto. The new president of the IPA made it the centrepiece of his inaugural speech. Global PR companies are falling over each other in the rush to measure purpose. The MSL Group has created the PurPle Index, designed to rank the Fortune Top 100 companies on the basis of the level of participation in those companies’ purpose-based initiatives. Burson-Marsteller has published its Power of Purpose study and identified 12 key drivers of ‘authentic purpose’. Good Relations Group has a Triple G rating based on ‘good actions’,‘good engagement’ and ‘good recommendations’. Purpose has, this year, also been the theme of an entire edition of Marketing.
Is this just faddishness, a fashionable rebranding of CSR and mission statements? Or does purpose embody a vital need for businesses to deliver more than just profit? Does purpose deliver an exciting opportunity for companies to act, as their Victorian forebears did, as ‘societies within society itself’? Should marketers give a damn about purpose, or isit just a new trick played by corporate affairs in theWell, first we need to define what true purpose is and isn’t. It isn’t simply delivering ‘a strong return to shareholders’, which is an important by-product of purpose, but not purpose itself. In a ‘monocultural’ business environment such as the UK’s, dominated as it is by the plc structure, delivering shareholder value sometimes gets in the way of achieving true societal purpose.
A number of British banks, for example, despite wanting to be ethical, have chosen not to offer banking services to the poor and unbanked because they are not profitable as customers. Creating products for them would reduce shareholder profit and thereby run contrary to the fiduciary and legal duty of the bank’s directors to maximise shareholder return. This cannot be right. In fact, the Bank of England should mandate that all the banks do their fair share for the poor as part of the banking licence. Much genuine purpose requires regulatory and constitutional change and cross-sector approaches.
This is why there is now a new kind of company called B Corps – of which there are already 1200 – in which the fiduciary and legal duty of the board is jointly to the employees, the communities it serves and the environment as well as to the shareholders. This is mutuality reborn. Co-operatives are currently starting up at the rate of one a day in the UK precisely because employee ownership is often the parent of true social purpose combined with commercial effectiveness. We needed mutual when there was no welfare state. Now we need mutuals again because the state can no longer cope alone with environmental and social problems as overwhelming as global warming and ageing populations. Business’s role is crucial.
Purpose also isn’t a mission statement crafted by an ad agency or a brand consultancy that’s then turned into an emotive ad campaign. Neither is it bolted-on CSR used to counterbalance commercial aims and patch up reputation. True purpose, which I and my partners call core purpose, expresses and strengthens a business’s entire strategy. It is bespoke to that business, central to its future, boosting company performance and delivering a return to society as well as to shareholders.
Purpose should make your employees more productive because they are able to turn it into everyday actions and are motivated to do so. Your products and services should reflect your purpose and be constantly improved by it. Your social actions should make commercial sense, not just societal sense. After all, the world thrives not on pure philanthropy but on mutual self-interest, including that between customers, communities and companies.
Marketers’ responsibility: six reasons why
Even when all this is taken on board, shouldn’t purpose be the responsibility of directors of corporate affairs, directors of strategy or CEOs? No. Purpose is vital to marketing directors and they are vital to it, for six very tangible reasons.
1 A proper core purpose is the highest-order (societal or human) benefit that derives from a specific product or service. Lord Leverhulme’s soaps were devised to ‘lessen work for women; to foster health’. ICI’s ‘responsible application of chemistry’ produced Perspex, Dulux paints, Terylene, Crimplene and Tamoxifen. IKEA’s ‘wide range of well-designed, functional home furnishing at prices so low that as many people as possible will be able to afford them’ is driven by a higher-order purpose to ‘create a better everyday life for the many’. Marketers sell products and services and purpose is the ultimate end-benefit, and best long-term selling-point, of those products and services. Think of USP as now meaning unique selling purpose.
Kotler and Lee famously segmented the societal and ethical activities of companies into five types. The least successful were those that followed conventional CSR and employee volunteering approaches: a bolted-on social cause disconnected from the mainstream commercial activities and skills of the business. The most successful theycalled ‘corporate social marketing’, where the cause fitted the business and delivered a stronger brand. Please note the inclusion of the word ‘marketing’.
2 Many products and services are of low interest, even dull, yet their end purpose rarely will be. Ergo you can grab a consumer’s attention against the odds – the essence of marketing – more cost-effectively if you are a marketer who harnesses purpose than if you are one who ignores it.
For example, an ATM machine might seem as pedestrian and functional a product as you can get. Yet, a decade ago, Circus unearthed a purpose for NCR, the leaders in cash machines, of ‘Transformingtransactions into relationships’. This became its purpose and the focus of its marketing. Now, 10 years on, web-enabled ATMs are enabling banks to deliver a stronger relationship with their customers.
Take the Digital Eagles scheme launched by Barclays, in which trained branch staff help customers to become digitally literate. This helps the customers in their lives and develops trust but also saves Barclays money when those customers know how to conduct their banking business online: mutual self-interest. Digital Eagles is integrated into the mainstream marketing of Barclays, including its ATM home screens, and helps to create customer preference and brand differentiation.
3 Product and service innovation is expensive, time-consuming and open to quick copying by competitors. Purpose can differentiate you more effectively and less expensively. It can even appropriate the highest-order generic of the category. Domestos ‘owns’ the life-and-death nature of toilet hygiene in the developing world via its global partnership with UNICEF. Nike has owned the generic purpose of sportswear for decades by relentlessly pursuing the idea that ‘If you own a body, you can be an athlete’, epitomised in everything it designs and sells.
Despite much innovation and clever marketing, Puma and Adidas have never matched this powerful high ground of a democratic enjoyment of sport. Google’s purpose ‘to organise the world’s information and make it universally accessible and useful’ is the generic benefit of a good search engine writ large. Clever marketing, such as Google’s ever-changing logo, avoids the dangers of appearing a monopolistic monolith and instead creates a brand as protean and nimble as the content that Google makes accessible. Google’s constant purpose is made eye-catching and agile by its marketing, and its marketing is given a spine by its purpose.
4 Boards and CEOs, led by the likes of Paul Polman and Antony Jenkins, are increasingly turning their attention to purpose. If marketers put themselves at the heart of shaping and expressing purpose, it will move them closer to the board.
Given that only a quarter of marketing directors sit on the board, this is an important consideration.
5 Marketing your higher-order purpose will give you a deposit account of brand trust for the times when the current account of product delivery fails. Toyota has always been famous for ‘The Toyota Way’: a creed that has had manifestations ranging from any worker being able to stop anentire production line to gather his co-workers to help him solve a problem, to modelling the individual retirement needs of individual employees. Toyota survived the product recalls that followed its relentless drive to become the world’s largest car manufacturer because it didn’t abandon the fundamental principles on which it was built.
Toyota’s purpose is not simply to design cars but to ‘lead the way to the future of mobility, enriching lives with the safest and most responsible ways of moving people’. This is a 100-year purpose. Purpose can also help to preserve your brand distinctiveness after a change of ownership. How else has Innocent preserved its particular brand of innocence post the Coca-Cola sale? Ditto Ben & Jerry retaining its eccentricity as part of Unilever.
6 Finally, core purposes need good marketers, as much as vice versa, because good marketers possess and co-ordinate the best communication skills. Purpose should provide the active framework
The litmus test of whether a company is truly developing purpose is whether its social, ethical, HR and environmental activities are integrated into, and expressed by, the marketing plan for product innovation, HR policies, choice of business partners, conditions in the supply chain, use of raw materials and much else besides. Yet all these elements of purpose will only become apparent and inspire people if they are brought alive by the best marketing, internally and externally. Look at the brilliance of the way brands, ranging from Patagonia and TOMs to IKEA and John Lewis, have marketed their core purpose.
The litmus test of whether a company is truly developing purpose is whether its social, ethical, HR and environmental activities are integrated into, and expressed by, the marketing plan. Southwest Airlines is a perennial example. Its purpose is ‘to connect people to what’s important in their lives through friendly, reliable and low-cost air travel’. Its cabin staff are recruited on the basis of keeping people happy in a giant metal tube 35,000 feet above the Earth. The airline’s marketing is an extension of this capability.
So, in a nutshell, or a bastardised film quote, anyway: “Quite frankly my dear, marketers should give a damn.”
Paul Twivy is founding partner of Core Purpose [email protected]
This article was taken from the December 2015 issue of Market Leader.