Does a strong purpose grow business?

Engels artikel over het opkomende “purposeful business”. De vraag die ik probeer te beantwoorden is of dit ook bijdraagt aan je merk.

[English – Published at LinkedIn]

Last week I witnessed a presentation where a recent article of Michelle Keaney in Marketing Week was used as an example of the economic power of purposeful brands.

Michelle Keaney quotes a European study from IRI and the Boston Consulting Group which found that Responsible Consumption (RC) products experienced a higher growth than conventional products. And that RC products are able to command a higher price point.

I was triggered by that remark and investigated a little bit more on this subject. In this article I will reflect my thoughts on the True Purpose, the Triangle of Trust and opportunities that are arising.

1. The True Purpose

In a previous article Michelle Keaney asks the question: “What do we really mean by ‘purposeful’ business?” She answers the question herself:

I see a difference between ‘having a business purpose’ and ‘being a purposeful business’. The former outlines the reason a business exists over and above simply ‘making money’ and is also sometimes known as the ‘Why’ or ‘Core Ideology’. A purposeful business is something quite different. It is a business that exists primarily to tackle a problem or challenge in the world in some specific way, and sees the sale of products and services as a vehicle for this positive change.

Reading a lot of different statements online, the confusion started in my head:

  • Responsible consumption (RC) brands—those that use organic, natural, ecological, local, or fair-trade claims to differentiate themselves” (IRI/BCG study)
  • Purposeful brands grow faster than conventional brands” (Michelle Keaney)
  • Having a business purpose is not the same as being a purposeful business.” (Michelle Keaney)
  • Why Purpose-Driven Companies Are Often More Successful.” Article by Sherry Hakimi

The IRI/BCG study does not even mention purpose or purposeful at all. In fact, the study: “concentrated on four popular grocery categories: coffee, fruit juice, hand and body lotions, and household cleaners.

And I don’t think Responsible Consumption goods are the same as purposeful goods.

So, the question remains: “are consumers willing to pay more for purposeful brands?”

2. The Triangle of Trust

Instead of purpose I tend to use the word promise, which is for me the true purpose: live up to the promises you make. Promise is an often used word with a very clear task: do what you say you will do. But a promise can be hard work and challenging. Break a promise to your best friend and you know what will happen.

Now, picture yourself as a consumer and your favorite brand does not live up to it’s promise. If you really love that brand, you will give it another chance. But also a second or third chance?

I am intrigued about the influence of a strong purpose or promise to the success of businesses. I am involved with two gentlemen, Stephan Fellinger and Joost Schrage from De Zaak van Vertrouwen (a matter of trust) who have the same believe as I that a healthy business can accelerate with a clear consumer promise. These gentlemen created a model they call the Triangle of Trust with the experience that any organization is in charge of three elements:

  1. What do you promise?
  2. Which true product is connected to this promise?
  3. What Human Talent do you need to create your true product to be able to live up to your promise?

These three elements are visualized as wheels that are connected with elastic bands. When these elements are in harmony the tension on the bands is strong enough to withstand external pressure and consumers will trust you as an authentic organization.

If you turn one wheel (eg. change your promise) tension will come to the bands connected to that wheel. The other wheels will have to move with the promise otherwise the bands will break and external pressure can easily influence your organization in a way you cannot influence yourselves.  

Where Simon Sinek’s golden circle is focused on “why” an organization does what it does, a promise is focused on what consumers and employees can expect from that organization. And more than that: a promise is not only what a consumer can expect from you but also how you live up to the promise you make. What do you promise to the people who buy your product or service?

3. Purposeful and promising examples

The true purpose of successful businesses derives from the strong conviction in core of their existence. Let’s look at three successful examples and see what made their success.

3a. TOMS shoes

In her article Michelle Keaney also writes about Toms Shoes, which is a great example. This company is founded by Blake Mycoskie based upon his experience in South America. He saw what the effect was of bare feed due to poverty. Bare feet were a barrier to go to work, school or even medical help. Mycoskie started his company with the “one for one” strategy. Buy one pair of shoes and they will give a pair to poor people. Mycoskie wrote a very good article in the Harvard Business Review beginning this year. The brand promise of Toms:

“Using business to improve lives!”

A clear statement where profitability joins sustainability. This is also what Mycoskie refers to in the HBR article.

3b. Chobani

Another beautiful example is Chobani. The founder, Hamdi Ulukaya, thought that American yogurt was too sweet and expensive. So, he lent some money and bought an empty yogurt factory to produce Turkish style yogurt he knew from his cultural background. He paid his employees far more than what was normal in the market because he felt that it was his moral duty. Ulukaya in an interview: “Businessmen should promote a sense of purpose in their corporate culture to create a climate of positive change in business and the world. He stated that companies should focus on humanity and not just on their bottom lines.”Chobani’s promise:

“Better food for more people.”

Mr. Ulukaya wanted to make Turkish style yoghurt (which was seen as a luxury product at that time) accessible for a larger group. This purposeful way of doing business didn’t do him any harm, Chobani is now valued at a minimum of 3 billion dollar.

And one of the latest purposeful acts of Mr. Ulukaya: earlier this year he donated 10% of his own Chobani shares to his employees. The goal, he said, is to pass along the wealth they have helped build in the decade since the company started.

3c. Google

Google, you might wonder? Yes! This is an example that a purpose does not have to have a direct visible higher human goal, but in the end it has. Google’s purpose:

“to organize the world’s information, and make it universally accessible and useful”

In general the large public is using Google as their port towards the inscrutable internet. But we also tend to distrust Google because they know all about us and make money with that knowledge. Looking at the purpose of Google it could make room for experimentation in new products, technologies, and services. And this is exactly what the Google founders were aiming at in the beginning: make Google a truly great place to work.

We all know now, in the Big Data era, that Information is power. Google is making information accessible on a global scale, this could be seen as a way to achieve more equality in the world. If you look at it in that way, Google’s purpose is creating a solid business, a fresh way to look at employment and a way to make a difference in the world.

4. Big opportunities are there.

great global survey  (PDF) done by Globescan and BBMP identified 5 aspirations of the major group of influential consumers that could point the direction of the marketplace of the future.

This group of consumers, called Aspirationals, represent 40% of the global public and are most likely Millennials (1982 – 1998).

The five aspirations rooted in deep human needs and desires that define the identity, priorities and behaviors of this new generation are:

  1. Abundance Without Waste (more experiences, fewer resources)
  2. Truly as you are (welcome imperfection as honest and beautiful)
  3. Get Closer (connecting with the people behind the brand promise)
  4. All of it (experiencing freedom beyond binaries and finish lines)
  5. Do some good (agency and impact in the everyday)

Looking at this research I am positive that a purpose can grow your business, especially with the growing consciousness of consumers. But what do both Keaney and Hakimi also write in their articles? Consumers want honesty, transparency and authenticity. And according to IRI/BCG that is where one of the challenges lie with RC products: in trusting the trustworthiness of the claims brands make.

The promise (or purpose) should be one of the whole company and not of a small few in the top.

5. Your challenge

Conducting this small research and having the experience in working with the Triangle of Trust, my challenge to you as a reader would be to determine:

  1. the promise of your company and is this clear to everybody in your organization?
  2. what your true product is and is this connected to your promise?

And if these are clear the hardest part starts: is your current staff suitable to reach your business goals? If not you need to make choices.

If so, start your engines and find your greatness, it’s time to accelerate!

Pictures from: TOMS Shoes, Nicole Cammorata, Google, IRI/BCG, BBMG and Nike.

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