Why brand purpose needs a purpose.
For some time, there has been something of a narrative that suggests brands with a highly refined, or at least clearly defined, purpose — that is relevant to a given audience — will reflect positively on brand preference, and in turn, increase sales. Upon further analysis, however, there seem to be a couple of issues with the discourse.
For starters, finding examples of brands with an authentic purpose is in itself challenging. On the largest part, what is typically offered to us as ‘brand purpose’ by many large corporations are at best platitudes, and at worst, a load of bollocks that fail to reflect the way in which the company in question conducts itself. World-renowned marketing professor Mark Ritson has famously made this point numerous times, and has highlighted the common disparity between brand purpose and actual business conduct. Just two of his many examples:
Starbucks: “To inspire and nurture the human spirit one community at a time”.
Yet paid no tax of any kind in Australia for a decade, paid a tiny fraction in the UK.
Google: “To organize the world’s information and make it universally accessible”.
Yet Google will not reveal its actual full revenues in Australia.
Ritson also makes a strong case for purpose leading to an ethical Catch 22. Purpose is altruistic by nature, yet the moment it is motivated by profit, any and all altruism goes out the window and the purpose is automatically undermined. It also implicitly means that brands would do the opposite if it were better for business, something JP Hanson has pointed out also demonstrably is the case when it comes to brands paying their taxes (or not paying their taxes, to be precise).
Another part of the trouble with the conversation seems to be the ease at which conflicting “data” can be amassed and used to “refute” (I use this term lightly) what is more commonly observed in the real world. Every now and then, a report arises that states something to the tone of “X percentage of consumers said they would buy a brand that represents Y.” — giving credence to the idea that brands do in fact need to stand for something greater than themselves. I am not for a second suggesting that respondents to such questions are lying — it is just that what consumers say in response to surveys isn’t always a true reflection of how they typically behave.
In April last year Richard Shotton published a top-line overview of a piece of research he had undertaken examining the statistics that are regularly regurgitated to support brand purpose — those from Jim Stengel’s Grow. The basic premise of Grow being that companies with an ideal at their heart see share price growth far in excess of those lacking such values. In summary, Shotton’s research highlighted several flaws in the methodology of the original study, which in turn, called into question many of the proposed ‘findings’. To paraphrase, despite Grow’s popularity, there is no proof that ideals deliver success.
Where purpose might be useful
Personally, I agree with the sentiment of brand purpose, but caveat this by saying that I agree in a strictly organizational sense — when a brand purpose is used as a guiding philosophy for a business, and not as something that is intended to be communicated to its customers in literal terms.
In Obliquity, economist Jon Kay provides numerous examples of business that have managed to achieve a set goal obliquely , i.e. by approaching the problem indirectly , in contrast to the more explicit ‘maximize shareholder value’ approach.
His book is excellent, and I am probably doing it a major disservice by simplifying it so much, but the general principle is that by approaching problems indirectly, it allows businesses to distill a High Level Objective (brand purpose/mission/vision, for the sake of this discussion) into a series of Intermittent Goals (which they can, to some degree, influence) and Specific Tasks (that are achievable). In this respect, I see the value of brand purpose in its ability to help a business focus on common high level objective.
To illustrate with a very basic example:
- High Level Objective: make high quality, nutritious food accessible to all children across Sweden.
- Intermittent Goal: increase distribution to outlets that reach young people.
- Specific Task: source potential retail partners.
In this respect, perhaps having a ‘purpose/mission’ at the heart of a corporate strategy is not necessarily a bad thing. However, having a purpose isn’t in and of itself enough to guarantee success, despite how refined/ambitious it might be. The means by which the purpose/vision is achieved takes far, far more work.
Where I do edge on the side of caution is when brand purpose is intended to be communicated (and understood) by a consumer. The ‘golden circles’, an idea popularized by Simon Sinek, famously suggested that “people don’t buy what you do, they buy why you do it.” A statement that makes the assumption that consumers purchase a given brand because of their their stated purpose. Suffice to say, this is very easy to infer post hoc.
For example, if the purpose of my brand was to make high quality, nutritious food accessible to all children across Sweden, it would be wrong to assume that my customers primarily would buy my brand because I make high quality, nutritious food accessible to all children across Sweden — by doing so I am just assuming causation. They could in fact buy my brand because it is an easily available, high quality product, offered at a competitive price . And that in itself is okay.
I don’t personally believe that hundreds of millions of consumers purchased a Windows based computer because it was once Bill Gate’s aspiration to have a “computer on every desk and in every home”. However, one can see how such a statement could be useful to guide a business strategy – it outlines a high level objective that can be broken down into intermittent goals and specific tasks.
Lastly, I think there is a distinction to be made between what I would call a ‘top-down’ vs ‘bottom-up’ approach to brand purpose. The former is an overarching philosophy that originates in the C-suite, and is used to guide a company’s strategies. In contrast, a ‘bottom-up’ purpose is one that is retrofitted to an existing business as a method for increasing revenues. Brands that have recently taken social and political stances are a demonstration of this — an upcoming blog post will discuss this idea in a little more detail.
In conclusion (for now)
If you put purpose in your business strategy ahead of profit, it is not necessarily a bad thing as it can help a business focus on a common, high level objective.
If you introduce a purpose because it’s supposedly good for profit, it is best approached with a fair degree of skepticism.
If you have a purpose because it’s supposedly good for profit, but don’t pay your taxes or live up to the purpose, then don’t be surprised if you are called out on it.