Where Is Why Going? The State of Brand Purpose - Branding Roundtable 35
Where Is Why Going? The State of Brand Purpose - Branding Roundtable 35
Where Is Why Going? The State of Brand Purpose - Branding Roundtable 35
Where Is Why
Going? The
State of Brand
Purpose.
David Aaker
Prophet
DECEMBER
2017
Flavia Anghel
Editor-in-Chief
[email protected]
#35
Where Is Why Going? The State of It’s been just over a decade since
Brand Purpose. author and TED talk favorite Simon
Sinek first encouraged the world
to “Start with Why,” triggering
an avalanche of corporate soul
searching and countless quests to
discover, define and activate purpose,
for organizations and the brands
they own. In fact, it’s been such a
dominant trend in management and
brand philosophy that it’s begun to
attract the ultimate validation of
importance – naysayers (as we’ll
touch on later in the Roundtable).
4
To assess just where “why” may be going as it enters
its second decade at center stage of corporate
consciousness, we reached out to four notable thinkers,
authors and practitioners in the realm of purpose. You’ll
hear from:
David Aaker
Vice Chairman of Prophet
Sara Roberts
Executive Director in the Advisory Services practice of
Ernst & Young
Jim Stengel
President/CEO of The Jim Stengel Company, former
Chief Marketing Officer of Procter & Gamble
Chuck Kent
Creator and Moderator of the Branding Roundtable
NOTE:
In two instances, not all participants elected to answer a given question.
5
Q. How do you define purpose today,
relative to brands and the businesses
they support?
Sara Roberts, EY
Purpose, or an organization’s “why,” is the fundamen-
tal reason why you do what you do as a company. In this
transformative age of unprecedented business com-
David Aaker, Prophet plexity and rapid change, purpose serves as your “North
I prefer the term “higher purpose,” because growing Star,” an ever-inspirational guide that allows your enter-
sales or profits can be a purpose. To me, higher pur- prise to stand securely on its foundation while constantly
pose means some goal beyond short-term financials or striving to create more impact. I believe tapping into each
their surrogates. There are contexts in which “purpose” company’s purpose, more so than its mission, strategies
is assumed to mean higher purpose of course, but the or markets, has the power to focus an entire organiza-
term higher purpose is less ambiguous in my view. I also tion, from the C-suite to the frontline.
distinguish between an offering-driven higher purpose
(for instance Apple – building insanely great products), a KoAnn Vikoren Skrzyniarz, Sustainable Brands
social higher purpose (expanding access to clean water) Brand purpose relates to the driving value proposition
and an environmental higher purpose (reducing carbon underlying a brand’s core “reason for being” beyond just
emissions of your firm and those that it touches). driving profits for the brand owner. In today’s connected,
informed and aware society, the longing for a refresh
on Madison Avenue’s version of the good life (which has
been sold to us since the 1950s), of having the bigger
Sara Roberts
EY “Purpose, or an house, faster car, whiter teeth and flashier persona, is
organization’s ‘why,’ is growing.
Our recent research within the general US population,
the fundamental reason executed in collaboration with Harris Poll, turned up the
why you do what you do fact that, across gender, generation and geography, as
as a company.” well as political or faith-based affiliation, we are collec-
tively shifting away from prioritizing the pursuit of money,
status and personal achievement. Rather, people now
favor the pursuit of what we call “Balanced Simplicity,”
and “Meaningful Connections” to one’s family, communi-
ty and the environment. Finding a way to deliver to these
new, mainstream aspirations will set a brand on the path
to sustainable success in the coming decades.
BRANDINGMAG 6 DECEMBER
Branding Roundtable 2017
Q. Must purpose apply to an entire
brand organization or is it possible
for individual brands to pursue distinctly
KoAnn Vikoren Skrzyniarz, Sustainable Brands
As a systems thinker who believes in the strength that
comes from integrity of design and design thinking, I be-
different individual purposes (if you will, lieve the biggest upside possible for a “House of Brands”
must it be a “Purposed House” versus a is to have a corporate brand purpose that serves as an
“House of Purposes” approach)? umbrella for the individual brands underneath it. This is
not to say that each individual product or service brand
Sara Roberts, EY should have the same purpose. But each brand in a
I believe there is a bigger purpose that sits at the macro house of brands should have a purpose that supports the
level of an organization. This is what acts as the guide higher-level corporate brand purpose.
and glue for all their businesses or brands. However, we For instance, Unilever’s purpose to “Make Sustainable
encourage each brand to articulate its nested purpose Living Commonplace” offers a strong signal to its family
(or, nested why), so they can help guide their own busi- of brands to weave long-term thinking about environ-
ness as to how they uniquely fulfill the overall organiza- mental and social value into each of its brands. The win
tion’s aim. is that those Unilever brands that are effectively embed-
ding a sustainable living purpose into their brand DNA
are growing twice as fast as the rest of Unilever’s portfo-
lio, and delivering 60% of the growth at Unilever world-
Jim Stengel
The Stengel
“With purpose-driven wide.
Company icons like Dove, Lifebuoy,
and Ben & Jerry’s, David Aaker, Prophet
It can and should be both. Look at Unilever. There is
Unilever is a ‘House of a rather broad purpose around sustainable living that
Purpose,’ yet each ties comes to life with programs around “improving health
together to support the and well-being,” “reducing environmental impact,.”
and “enhancing livelihoods,” all of which have a series
Unilever purpose.” of quantitative objectives. In addition, their brands are
encouraged to have their own higher purpose. Knorr
is about “enriching lives through flavor,” Dove has ad-
Jim Stengel, The Jim Stengel Company dressed women’s self-confidence with the long running
Every brand is simply the collective intent of the peo- “Real Beauty” campaign, and Lifebuoy has set out to get
ple who work on the brand. It’s not only possible for an one billion people to wash their hands better under the
individual brand to have its own distinct purpose within a “Help a child reach five” program.
larger enterprise, it’s a mandate. That’s the way the best
brand-building organizations run. With purpose-driven
icons like Dove, Lifebuoy, and Ben & Jerry’s, Unilever is a
“House of Purpose,” yet each tie together to support the
Unilever purpose.
To illustrate this concept, I like to use the metaphor of
a prism. The values and purpose of the parent compa-
ny refract into individual rays of brand meaning. It’s the
same light source, but each brand has its own unique
purpose. You must have both: the source of light and the
separate, beautiful expressions of that light.
BRANDINGMAG 7 DECEMBER
Branding Roundtable 2017
Q. Do you see a substantive business
difference between “functionally-
driven purpose” brands (see Clorox’s recent
KoAnn Vikoren Skrzyniarz, Sustainable Brands
Not really. There needs to be a functional benefit of
some sort to every brand as well, ideally that aligns
attempt at a purpose repositioning) and with its deeper purpose. Both are aiming the conver-
“higher-purpose-driven” brands seeking sation and engagement around a deeper human de-
social benefit (ala the usual suspects such sire that is connected to their functional benefit. Pa-
as Patagonia)? tagonia wants you to be warm and stylish, guilt-free,
knowing that pursuing this functional benefit through
Jim Stengel, The Jim Stengel Company their brand delivers the added benefit of a healthier,
I don’t fully subscribe to the delineation between purpose more sustainable planet. Clorox is making a deeper
“types.” In order for any brand to be purposeful, it must connection with us by pointing out that cleaning helps
advocate for a high-order ideal and put itself in service us create a sense of control and even a meditative
to people and the world. So, by definition, every pur- state that can be good for us beyond just killing germs
pose-driven brand yields social or societal benefits. The (which is an outdated need, at least in the developed
key is that this benefit must be authentic to the brand world where we generally now know that keeping a
and what it stands for. Barbie does it by inspiring possi- clean environment is good for our health and family).
bilities for young girls. Lowe’s does it by helping people
love where they live. Pampers does it by caring for ba- David Aaker, Prophet
bies’ happy, healthy development. The new Clorox posi- Yes. The offering-driven higher purpose, like Tesla’s
tioning is beautiful and insightful – clean is the beginning electric cars or GE’s energy group, can justify the in-
of new possibilities. Everyone has goals and dreams, and vestment and communicate the purpose in the context
for most of them, being clean is an important first step. of a business. The business itself delivers that higher
purpose.
KoAnn Vikoren
Skrzyniarz
“There needs to be a The most respected “purpose” brands in Japan
Sustainable
Brands
functional benefit of are Toyota and Panasonic. Both earned that position
because of the visible parts of their business (Toyota’s
some sort to every Prius and Panasonic’s energy conserving products).
brand as well, ideally Those with a social or environmental higher purpose
that aligns with its must justify the investment on the basis of being
the “right thing to do,” uniquely capable of making a
deeper purpose.” difference, able to create meaning for employees, the
basis of a relationship with customers, or the source
of energy and visibility for their brand. With share-
holders breathing down their necks, this task is not so
easy.
Sara Roberts, EY
I really cringe at the idea of companies using purpose as
“positioning” or as a marketing gimmick. It’s truly inau-
thentic – and most times you can tell when they are trying
to talk the talk but really don’t walk the walk. To quote
Lady Gaga, I think the truly authentic companies were
“born that way.” They came up from this desire to be a
force for good in the world, along with making money.
BRANDINGMAG 8 DECEMBER
Branding Roundtable 2017
I fervently believe, though, that the best leaders use terested in more than just short-term financials. They
their influence and action to extend the power of purpose need more than that for their professional life, plus
beyond corporate social responsibility — that is, beyond they don’t have a lot of respect for firms perceived as
compliance and into the operating model and decision simply greedy. In certain industries, where the compe-
making of each of their brands. tition for talent is intense, having a meaningful higher
purpose is an imperative. The impact of the attitudes
of millennials also extends to customers and inves-
Thus, one of the big values authentically positive brands Jim Stengel, The Stengel Company
find is a competitive advantage in attracting and retain- This is a phenomenon that transcends generations. Pur-
ing consumers. We believe respect for our planet and all pose and values are here to stay. Millennials and Gen Z
people, near and far, is an emerging part of our global are pushing us to be authentic in how we operate brands
ethos. We’re finally starting to understand (despite what with purpose.
we read in the news) that we all sink or swim together. A nicely crafted purpose communication campaign is
Again, we have lovely data that reinforces this, in our insufficient. A truly authentic business running on pur-
Emerging Good Life study that will be released at the end pose will activate its purpose in every way, from recruit-
of November, 2017. ing talent, to how it sources materials, to how it rewards
employees, to how it speaks to consumers. Everything is
David Aaker, Prophet tightly aligned with its purpose. And Millennials and Gen
There is a large subset of millennials that have a Z aren’t afraid to call out companies publicly for not living
strong bias to working for organizations that are in- up to their purpose — and that is a good thing.
BRANDINGMAG 9 DECEMBER
Branding Roundtable 2017
Q. Most purpose-related surveys report Experiments are harder to find. In my book on Cre-
results in terms of what people believe, ating Signature Stories, due out next year, I tell the sto-
say or intend. Can you point to research that ry of one experiment, Barclays. At the time it was the
is more thoroughly based in business results least-trusted brand in the least- trusted industry – but
or behaviors than in business attitudes or it developed a higher purpose which spawned some 40
intent? programs. Stories around those programs created a
dramatic impact on their image, and on measures of
David Aaker, Prophet business success as well.
There are a host of studies that show that higher-pur-
pose firms have a superior financial performance than Sara Roberts, EY
others. These studies are correlational rather that ex- Two of our most recent EY Beacon Institute research
perimental but still are eye-opening. Look, for example, studies points to business results: “How Can Purpose
at Fortune magazine’s annual account of 50 companies Revel a Path Through Disruption?” and The Business
changing the world. Case for Purpose.”
From books we have, for example, the Firms of En-
dearment list of 55 US companies ranked high on be- Jim Stengel, The Stengel Company
ing sensitive to all stakeholders, and performing much In late 2011, when I published my book Grow, How Ideals
better than the S&P over 5, 10 and 15 years. There are Power Growth and Profit at the World’s Greatest Compa-
individual firm quasi-experiments. Unilever, for example, nies, I partnered with Millward Brown Optimor to study
shows that their “sustainable brands” grow 50 percent purpose and business results. We conducted a 10-year
faster than their other brands. growth study involving 50,000 brands. We selected the
top 50 brands — with extraordinary financial and con-
David Aaker
Prophet “There are a host of sumer results from 2000 to 2010 – and benchmarked
them against their competition. The Stengel 50, as we
studies that show that dubbed them, grew three times faster over that 10-year
higher-purpose firms period than their competitors. There was a clear and
BRANDINGMAG 10 DECEMBER
Branding Roundtable 2017
Q. Bloomberg Businessweek recently took
corporate purpose and its poster child,
Unilever, to task in the article “If Unilever
KoAnn Vikoren Skrzyniarz, Sustainable Brands
Hmmm, I guess I didn’t read the piece that way. My
sense is that the jury is still out as to whether Unilever
Can’t Make Feel-Good Capitalism Work, Who will be a pioneer or an outlier. I can tell you from what
Can?” Do you see that commentary as the we see around the world, Unilever is a pioneer, along-
inevitable counter-trend criticism or do you side many other companies who are steadily moving in
share the concern that purpose won’t work this direction — from P&G to Nestle to Campbell Soup to
in a shareholder-first world? Clorox to Ford to Dell and so many others.
BRANDINGMAG 11 DECEMBER
Branding Roundtable 2017
power of ownership. If they buy a company, they can do ing its heritage to move beyond the hotel industry to – in
anything they want. Look at what 3G Capital did to the their words – “turn every dinner table, gaming table,
people and strategy of Kraft when they took over. shop, venue and view into an entertaining experience that
blows people’s minds.” MGM’s stock price is up over 70%
Unless the power of shareholders is reduced or other- in the last 17 months and its staff friendliness metric is
wise neutralized, there is risk that this momentum could at an all-time high.
be slowed or reversed — especially if there is a dip in the Another example is from India, in a totally different
economy and shareholders become even less patient. category that is near to my heart. The brand is P&G’s Ari-
I think that it is not too dramatic to say that there is a el, a laundry brand, and its purpose is to set women free.
battle for the soul of capitalism and the outcome is still This purpose inspired a social media-fueled effort called
unclear. #ShareTheLoad, which resulted in 76% increase in sales
by encouraging both men and women to share the load of
household chores.
BRANDINGMAG 12 DECEMBER
Branding Roundtable 2017
David Aaker, Prophet
Probably the most successful purpose firms are those
with a CEO and board of directors that are on board with
Q. Conversely, what companies or
categories are struggling most with
purpose (either ignoring it or failing to live up
a higher purpose and who have the talent and strategic to its promise)?
focus to develop programs that are well thought out and
implemented. Fortunately, there are many such firms. David Aaker, Prophet
One good role model is SalesForce.com, with their 1-1-1 Firms that have financial measures dominate their mis-
model that has been adopted by over 70 other firms. sion and strategy. Look at the track record of 3G Capital
with their purchase of Kraft and Heinz. Among the stake-
Sara Roberts, EY holders that suffered were employees. I suspect, given
I do think that Unilever is a very good example – because the stated 3G mission, that any higher-purpose programs
Paul Polman isn’t just thinking about it from a CSR or then in place were reduced in priority.
marketing and branding perspective, but extending it into
everything they do as a business. The impact is consis- Sara Roberts, EY
tent through all of Unilever’s brands. Dove has set out to The companies that are struggling the most are the ones
strengthen women’s self-esteem through its campaign that are giving it short shrift (believing it’s the “soft” stuff
for Real Beauty, including setting up a self-esteem fund made from unicorns and rainbows), or who are ‘saying
and project that has reached more than 1.5 million Cana- but not doing.’ There are hundreds, even thousands of
dian girls with workshops and online resources. Lifebuoy companies (not naming names but they know who they
soap, a hand-hygiene product, has kept its focus on pre- are) that are using purpose as a marketing ploy – and not
venting the death of about 2 million children before the as a guiding light or decision factor inside their business-
age of five due to diarrhea and pneumonia by promoting es.
hand-washing.
Southwest Airlines, for example, is a highly recog- “The companies that Sara Roberts
EY
nizable and meaningful brand for consumers, but that
brand is actually an expression of the airline’s clarity of
are struggling the most
purpose. In turn, that clarity has guided some of South- [with purpose] are the
west’s biggest strategic decisions. Southwest Airline’s ones that are giving it
purpose is to “democratize the skies.” This is consistent
with their business model, which holds that success in
short shrift.”
the competition for airline customers is achieved not just
by winning share in the existing market but by making The companies who activate and operationalize it
the market itself bigger. When more people fly – because throughout their strategies and operating model are the
costs are low, convenience is high, and people are com- ones who are truly purpose-led companies. In these
fortable – there are more customers for Southwest. companies, leaders use their purpose as the primary
It’s easy to see how this purpose is embodied in the lens for making the critical decisions. They constantly
Southwest Airline’s brand. Much of what makes South- ask, “Will this solution, action, or strategy help serve our
west distinctive is the company’s willingness to buck purpose?”
conventional approaches to treating customers in a very
staid and regulation-heavy industry. Everything they KoAnn Vikoren Skrzyniarz, Sustainable Brands
do is in line with that unconventional attitude – from Anywhere that ‘cheap’ is the leading value proposition is
open-seating, to the informal jokes that put customers going to struggle, because, of course, doing things right
at ease, to the low cost airfares – reflecting both South- – not polluting, not exploiting workers, whether in retail
west’s brand and its purpose. or in the supply, using materials that are non-toxic – all
BRANDINGMAG 13 DECEMBER
Branding Roundtable 2017
of these things do cost more money. So, aspiring to afford there’s really a choice anymore), you must be prepared to
products and experiences that offer up this new, healthi- not only talk about how you’re a purposeful company, but
er, simpler, more meaningful, connected life, rather than to actually be it and do it.
stacking your closets with crap, is going to be the ‘Ameri- The most productive, effective, and authentic way to
can Dream’ of this century. operationalize purpose in an organization is to figure out
I have been saying for years (who wants to work with how to support and drive value for the customer in line
us on this?) that we need to break free of selling on with your purpose. When key questions are asked, deci-
price, and start presenting total value instead. Our New sions made, and actions taken accordingly, the organiza-
Metrics work and conference is all about building a new tion can be said to be leading with purpose. That clarity
discipline around how we define and measure these new not only connects the business to the customer in a
forms of environmental and social value business can deeper way, but it drives innovation in service of custom-
generate. er value, leads to more sustainable growth and profitabil-
ity, infuses authenticity into marketing and brand, brings
Jim Stengel, The Stengel Company employees and stakeholders together – and helps the
While companies with high employee turnover face par- world become a better place.
ticular challenges, there is not one category or company
that struggles more or less with purpose.
Brands that see purpose as a separate component to “Leaders are only Sara Roberts
EY
their company strategy or as a social-cause effort, do beginning to grasp
not appreciate the full advantages of a purpose-driven
that purpose must be
company. The key to success is how brands create and
activate their purpose. Purpose needs to be intrinsical- activated and embedded
ly tied to the brand heritage and the customers’ wants in the organization’s
and desires. It also needs to inspire how the brand and
people, processes,
entire organization thinks and acts across their systems
and processes. It needs to be driven by the leadership to strategy, and culture.”
become part of the company DNA.
KoAnn Vikoren Skrzyniarz, Sustainable Brands
I would recommend getting on board quickly, because
BRANDINGMAG 14 DECEMBER
Branding Roundtable 2017
discussion with their teams about their purpose – and to ners and losers. The good news is, to the degree that we
have the same kinds of discussions with people through- collectively support those brands that are helping deliver
out their organizations. Once this conversation starts a better life for all, we will all benefit, and that has all the
it always leads to good places. And helping leaders and makings of the good news story we so desperately need
brands pursue those conversations, and discover and at this moment in history.
activate their purpose in all they do, is our purpose.
Q.
indicator of a broader need for meaning and a response
Finally, during this era in which regard to it.
for traditional institutions of belief
and purpose (especially government and Jim Stengel, The Jim Stengel Company
religion) is arguably in decline, how far can As Holocaust survivor Viktor Frankl taught us, “We’re all
purpose-driven brands credibly step up to on a quest to find deeper meaning.” That quest touches
support the human search for meaning? every aspect of our lives. Brands can play a pivotal role
in their categories, whether it is energy, social media or
KoAnn Vikoren Skrzyniarz, Sustainable Brands health care. But the power of purpose is not limited to
Oh heavens, I’m sure I’ve written a few complete blogs brands. Embracing purpose would be a powerful way for
on this. The short story is that the institutions of the past institutions to find their true voices, engage with their
that have held our trust have lost it, but that doesn’t constituencies, and create a better world.
erase our human search for meaning, which is an indeli-
ble part of what defines our species. Our interaction with
our economic system is pervasive for all of us, whether
you’re buying or selling sachets in the favelas in Rio, or
buying luxury styles from Eileen Fisher. It is natural for
us to be turning to brands that are an indelible part of
our lives in hope of finding an outlet for this yearning.
Our economy is supposed to be in service to our hu-
manity – helping enable all of us to live healthier, happier
lives. We’ve just gotten off track with that. The opportu-
nity to right our course is huge, and there will be win-
BRANDINGMAG 15 DECEMBER
Branding Roundtable 2017
This Month’s Branding Roundtable Members
David Aaker David, often referred to as “the father of modern branding,” is the Vice Chair-
man of Prophet, Professor of Marketing Strategy at Berkley Haas School of
Business, an inaugural inductee into the Marketing Hall of Fame, and the
author of numerous books, including the forthcoming Creating Signature
Stories: Strategic Messaging that Persuades, Energizes and Inspires.
Sara Roberts Sara is an Executive Director in the Advisory Services practice of Ernst &
Young, with a focus in strategy, organizational culture, and purpose-led
transformation. She is also a speaker and author whose latest book is Nim-
ble, Focused, Feisty: Organizational Cultures that Win in the New Era and
How to Create Them.
KoAnn Vikoren Skrzyniarz KoAnn is Founder and Chief Executive of Sustainable Life Media, producers
and conveners of Sustainable Brands, the leading global learning, collabora-
tion and commerce community of innovators focused on advancing the role of
brand in shaping a flourishing future.
Jim Stengel Jim Stengel, the former Chief Marketing Officer of Proctor & Gamble, is the
President/CEO of The Jim Stengel Company, advisor to leading brands, a
popular speaker, and the author of multiple books, including his most re-
cent, Unleashing the Innovators: How Mature Companies Find New Life with
Startups.
Chuck Kent Chuck is the Chief Conversation Officer for Lead the Conversation. He works
with top executives to develop more authentic thought leadership content,
and create meaningful industry conversations that can, in turn, create re-
lationships. A prolific writer, brand strategist and content creator, Chuck is
also a Contributing Editor for Brandingmag and the creator and moderator of
Branding Roundtable.
BRANDINGMAG 16 DECEMBER
Branding Roundtable 2017
NEXT MONTH
on Branding Roundtable:
Change Management in
Rebranding
Moderator:
Flavia Anghel
Editor-In-Chief, Brandingmag
[email protected]
BRANDINGMAG 17 DECEMBER
Branding Roundtable 2017
Read this and future issues with the
Brandingmag
iPad App
BRANDINGMAG DECEMBER
Branding Roundtable 2017
DISCLAIMER © 2017 Brandingmag. Some Rights Reserved
No part of this publication may be used or reproduced in any manner without written
permission from the publisher, except in the context of reviews.
Opinions contained in the editorial content are those of the contributors and not
necessarily those of the publisher of Brandingmag.
Despite careful control Brandingmag accepts no liability for the content of external
links.
All images contained in this book are copyrighted property of their respective owners.
www.brandingmag.com