It’s difficult to miss the extraordinary number of books, research studies and conference speeches about ‘Purpose’ over the last few years.
There are almost 60,000 books on the subject on Amazon (and over 7,000 specifically on ‘Business Purpose’). Even Justin Bieber appeared in London last weekend on his ‘Purpose’ world tour. It’s almost as though it’s a new idea.
It’s also difficult to disagree with the findings and conclusions of the various sources about its importance in business. The evidence is truly compelling.
Brands with strong ideals grew three times faster over a 10-year period than ‘less ideal’ competitors.
An investment in them would have been 400% more profitable than an investment in the S&P 500, according to the Grow study by Jim Stengel Co.
Research by the advertising giant the Havas Group found that ‘meaningful’ brands have outperformed the stock market by 206% over the last ten years.
“Brands with strongly stated purposes reported three-year revenue growth of more than 10%”
Brands with strongly stated purposes reported three-year revenue growth of more than 10% versus flatlines for those without, according to Ernst & Young and the Harvard Business Review data.
Unilever says that the highest-performing brands in its portfolio – growing at twice the speed of the others – are purpose-driven brands.
You hardly want to remind people that there was already a 70-year study named Built to Last, showing that companies driven by strong ideology outperformed the market average by a factor of 15.
You might also be forgiven for looking at other studies that suggest in a world of increasingly infinite choice, where product and price are laid bare, surely this means that you just need to hustle in there, get your head down and drive on those grounds?
Trusting brands as guides
But here’s the thing. In this messy and bombarded world, human beings aren’t going to stay awake for much longer to absorb ever more information.
Every day sees 500 million tweets, over 4 billion Facebook messages, circa 500 million hours of YouTube footage uploaded.
“Purpose is not just a marginal advantage … it’s a stronger platform for innovation”
People need help to navigate and edit this stuff to stop going mad – and they gravitate to those brands they know and trust. In these challenging times, every marginal advantage counts.
And purpose is not just a marginal advantage. Apart from the business case above, it’s a stronger platform for innovation – Apple is the best example.
Purpose is an extraordinary attraction and retention generator for employees. Google gets two-million people apply every year for 5,000 vacancies.
In a survey, 75% of young people think work should be more than a paycheck. As the late Body Shop founder Anita Roddick once said: “We were searching for employees, but people turned up instead”.
Where is the purpose in retail?
What’s interesting is that retail is not a great purpose-driven sector. Out of ten key categories, it comes ninth.
This does not bode well bearing in mind the changes in the industry that demands ever-stronger relationships with customer, with staff and with broader stakeholders and the need for step changes in performance.
Why is that? Talking to a range of retail businesses, there seem to be a number of reasons.
Primarily that because of the pace of change, particularly more traditional retailers who struggle to run profitable stores alongside digital channels, this higher level thinking is just not a priority for time or thought.
“Life is about surviving and driving. Staff turnover means investment in engagement looks extravagant”
Life is about surviving and driving. Staff turnover means investment in engagement looks extravagant. But also, there is definitely an element of purpose talk being ‘softy and lofty’ for hard businesses.
Soft or hard business?
Well, you would hardly call Amazon a ‘soft business’. Its purpose of ‘the earth;s most customer-centric company’ is the ultimate, purpose-driven Terminator machine for other sectors.
As with Ikea (who aim ‘To create a better everyday life for the many people’), this sense of purpose was built in from outset. And has driven the respective businesses across all operations, innovation and behaviour.
“It’s also possible to re-inject purpose into businesses that have drifted or diluted”
But it’s also possible to re-inject purpose into businesses that have drifted or diluted, or have grown and need to be taken to a new level.
Airbnb has graduated from a couch-surfing, low-cost stay-over business to one which says that it ‘Makes people around the world feel like they could belong anywhere’.
Equally, Tesla has moved beyond transport to energy, and are changing their business trajectory.
Big. Simple. True
But obviously, it has to adhere to a few principles.
Big, Simple, True. Big as in higher level. Simple so you can remember it and say it with feeling and a straight face. And true, because in a digital world, phonies get found out with a speed that will take your breath away.
That means doing some archaeology on your business to dig up its origins. Best to discover than to artificially construct a purpose.
There is usually some truth that has got lost in the mists of business time.
“There will need to be symbolic actions to demonstrate and substantiate the purpose”
If not, talking to your people, talking to customers and thinking about the fundamental needs, principles and broader benefits of your business, some truths will emerge that can be crafted and used.
There will need to be symbolic actions to demonstrate and substantiate the purpose so it’s not just a form of nice words, cynically received. And perhaps leave out the capital letter attached to ‘Purpose’.
Doing some purpose on purpose can be just the ticket to change the game.