BRAND PURPOSE IS JUST CSR BY ANOTHER NAME

Genuine brand purpose is not about traditional corporate social responsibility. It is an organization’s primary motivation, the reason the brand exists in the first place.

Brand purpose is one of those topics increasingly being talked about in boardrooms and at business schools. In fact, the idea of adopting a purpose appears to be in danger of becoming fashionable. This presents both an opportunity and a risk. The idea that businesses should be placing a greater emphasis on the reason ‘why’ they exist should be broadly welcomed, but as with many things that suddenly become the latest c-suite discussion topic, it is also in danger of being fundamentally misunderstood and potentially corrupted. Brand purpose is less to do with traditional corporate social responsibility (CSR), defined by the FT Lexicon as ‘a business approach that contributes to sustainable development by delivering economic, social and environmental benefits for all stakeholders’, and everything to do with running a sustainable and effective enterprise.

Brand purpose is becoming a hot topic because businesses are realizing that customers are not just interested in what a business does or how it maintains an edge over its competition. Increasingly, customers are also interested in why a business exists. What is the motivation that sits at the heart of the enterprise?

Meaning matters

In many economies customers are now faced with a plethora of choice. In any given product or service category, it is likely that several businesses will be competing for your attention and your money. Customers find it difficult to genuinely differentiate between providers and to know who to trust. There is also widespread public distrust in politics and big business. This ‘trust’ crisis means that customers are understandably placing a much greater emphasis on the authentic and are seeking brands which they perceive have real value and greater meaning than simply making money.

In 2017 Havas Group published the results of its biennial research (Meaningful Brands 2017); this research covers 1,500 global brands and garners the opinions of over 300,000 respondents globally. The research tracks and measures the different relationships that people have with brands and it has consistently and conclusively demonstrated that brands considered to be more meaningful by customers are able to generate more value for the business – typically increasing their share of wallet by nine times the average and outperforming the stock market average by 206 per cent.

Being clear about the ‘why’ is becoming an important business imperative. It demonstrates to customers and employees that there is more to your business than just the short-term pursuit of profit. It places your activity in a broader context and helps illustrate how you are building long-term sustainable value.

Of course, generating a profit and acting responsibly remain the essential prerequisites for any good business, but these are consequences, the things that flow from good business decisions and good governance. A purpose is something quite different; it is the unchanging motivation, the thing that can help you make effective decisions about what is right for your customers and your employees. A purpose is about much more than a single action or a specific CSR initiative. It is the reason behind why you do what you do. Hence it should influence all aspects of your behaviour and guide you in times of difficulty or uncertainty.

Purpose in action: Ikea, IBM, Google

Ikea is an example of a business that has developed and enacted a powerful purpose which influences all aspects of its business. Its commitment to create ‘a better everyday life for as many people as possible’ infuses every aspect of the way it operates and behaves. Its purpose is rooted in the notion that good design should be available to everyone. It is an open and democratic business that provides well-designed and affordable products within the context of an engaging and entertaining retail experience. It thinks hard about the customer experience and makes a virtue of the things that make it affordable in the first place, namely self-collection, self-assembly and long queues. The purpose is also in evidence in the way that Ikea recruits and rewards staff: today 45 per cent of its managers are female and pay is structured around employee needs rather than simply mirroring the prevailing market average. In terms of sustainability, Ikea also invests billions in the production of green energy – mitigating the negative environmental and social impact of its significant energy requirements. This is further evidence of the purpose in action helping to create a ‘a better everyday life for as many people as possible’.

For over 100 years, IBM has been influenced and guided by the purpose its inspirational President, Thomas Watson, articulated, namely the creation of ‘information technologies to benefit mankind’. IBM’s adherence to and enactment of this idea has enabled them to lead and traverse huge changes in the way technology has been utilized. From calculating machines, through to supercomputers, business consulting and the concept of the ‘smarter planet’, IBM has managed to stay relevant and in most instances ahead of the competitive set.

Google’s stated purpose is to ‘organize the world’s information and make it universally accessible and useful’. It is a focus that has driven the business since its inception and it has proved incredibly successful. While it is a lofty and (perhaps) worthy ambition it certainly wasn’t formed out of a CSR initiative. It goes to the very core of what Google does and how it makes and creates shared value.

Some important businesses have clearly seen the value in espousing and enacting a clear purpose. It can act like an operating system, shaping and guiding behaviour across the whole business. As we shall see it can also be very helpful in times of crisis.

Purpose and doing the right thing

In On Purpose, there is a story that demonstrates how purpose drives decision-making in critical times. Back in October 2012 the eastern seaboard of the United States was visited by Hurricane Sandy – this was the hurricane that was described as the storm of the century. It caused 85 deaths, left 8 million people without power, made thousands homeless and caused widespread damage to property and infrastructure.

One of the interesting aspects of this disaster was how different businesses chose to respond to the unfolding tragedy, In the book the authors explain that American Apparel, the US clothing retailer, decided that the best way to help those customers ravaged by the storm (or as they described it ‘bored by the storm’) was to offer them a 20 per cent discount on all clothing for a time-restricted period of 36 hours. American Apparel effectively saw the storm as a retail opportunity.

Contrast this with the approach taken by the Duracell and Tide brands. Neither attempted to ‘sell’ to their customers. Instead Duracell deployed a number of branded power generators that went directly into the communities worst affected. Similarly, Tide launched mobile laundry centres giving people the much-needed opportunity to wash the few clothes they had. Duracell and Tide resisted the opportunity to chase revenue and instead found ways to genuinely help customers and their communities.

These two brands are both owned by P&G (Procter & Gamble) which itself is a purpose-led business. ‘P&G’s purpose is to touch and improve more consumers’ lives with more P&G brands and products every day.’ In a time of uncertainty, these brands instinctively knew how to respond appropriately to the crisis, because they were influenced by a clear purpose. They didn’t just try to help; they knew how to help.

Finding and articulating your purpose

So how do you build or articulate a purpose that can positively influence all aspects of your business? Well, contrary to the myth, you don’t start by looking at how you can do ‘good’ or how you address the sustainability agenda (you should be doing these things anyway!). You begin by finding the things that have the potential to unite your customers and your employees. You must ask a simple question that can prompt a considerable amount of soul-searching: ‘What is it that matters most to our customers and our employees?’ If you can crack this, you will be well on your way towards uncovering your authentic purpose.

Potential sources of confusion

This is also where a lot of the confusion starts creeping in and why purpose is often mistakenly lumped together with ‘doing good’ or enacting worthy CSR initiatives. We are too used to hearing brands and businesses talk about what they want to do and how they want to do it. For example, they want ‘to be the number one’ or ‘offer great returns to investors’. But we are less familiar with hearing brands express a genuine motivation, the thing that really unites their customers and staff. So when we are finally presented with something that is expressed in more emotional terms it might feel like a worthy sentiment more befitting of a place in a sustainability report. This is to miss the point entirely. Brands that have at their heart an authentic and relevant purpose are revealing the truth about the relationship between their customers, their staff and their stakeholders. They are revealing the recipe for how value is created as well the plan for how it can be sustained.

What matters most to your customers and employees?

Nissan realized that air quality was becoming one of the most fundamental global issues for customers and employees – and that it was time for the automotive sector to take action to reduce emissions and improve air quality. While vehicles are generally becoming cleaner and more efficient, technology now offers the realistic prospect of dramatically reducing emissions and then eventually removing them all together. The same also applies to serious road accidents. Technology has the capability to make cars much safer and reduce the number of accidents. Nissan has therefore made zero emissions and zero fatalities the cornerstone of its purpose: ‘Advancing mobility towards a zero-emissions and zero-fatalities future on the roads’. This statement of intent is made credible both by its leading position in electric vehicles and its continuing investment in electric and autonomous vehicle technology, which (together with the other manufacturers) has the potential to deliver an emission-free, fatality-free world.

What matters most?

As On Purpose explains, Premier Inn is an example of another business that successfully identified what mattered most to its customers and employees. At first pass, Premier Inn’s purpose might feel less ambitious than Nissan’s, but in the context of their business (and what they can meaningfully influence) it is no less powerful. Premier Inn realized that what mattered most to their customers and their employees was simply helping customers to ‘feel brilliant’. Most guests at a Premier Inn are usually there for a specific reason, often for an important business meeting or family event. What guests value most is being made to feel great so that they can go out and be the best version of who they are; employees in turn are motivated by helping guests feel great. ‘Making their customers feel brilliant’ has been adopted as the core purpose of the organization and it has directly influenced a powerful proposition, to give every customer a ‘great night’s sleep’. Investment has been focused on delivering against this proposition with the specific introduction of Hypnos beds and the upgrading of air conditioning across all rooms. Premier Inn isn’t just in the business of being a hotel – it is in the business of making its guests feel brilliant.

An effective purpose has to be based on what matters most to your customers and employees. Sometimes (depending on the scale and reach of an organization) this will be an issue as big as global air quality but often, as with Premier Inn, it can be a more modest but no less authentic ambition based around the idea of making a guest ‘feel brilliant’. Both matter. Each purpose is an authentic expression of why that organization exists.

A cautionary tale, the perils of purpose

Sometimes a brand takes the decision to clothe itself very publicly in the mantle of a worthy purpose or a fashionable cause. It makes that purpose the centre of its brand communications, even encapsulating it in a slogan or repeated copyline.

This can prove problematic if the business operations are not always 100 per cent aligned to it. Customers are increasingly sensitive to brands that profess to stand for one thing and then do something else completely incongruent with that. BP is a case in point. In 2000 the business embarked on a $200 million rebranding programme in which it sought to reposition itself as a green energy business, looking ultimately to move ‘Beyond Petroleum’ and become a sustainable energy company. Some commentators remained unconvinced, but many more saw BP as an enlightened business, trailblazing a new, more progressive approach to energy production. For a while BP really did seem as though it was making progress. It invested heavily in solar and wind energy and sought to bring safer domestic heating and cooking fuels and micro-energy to developing economies. Even its competitors began to emulate its approach. All of this was seriously challenged in April 2010 when a BP-operated rig exploded in the Gulf of Mexico and as a result a ‘sea-floor gusher’ flowed unchecked for 87 days. During that period Deepwater Horizon (as the disaster became known) released an estimated 4.9 million barrels of oil directly into the ocean.

Of course, drilling for oil is often a perilous and technically demanding activity and however professionally it is undertaken accidents will occur. But what aggravated an already grievous situation was the perceived initial reaction of the incumbent CEO Tony Hayward, who was criticized for not sufficiently acknowledging in public the full seriousness of the situation and who was reported as complaining that his holiday had been cut short by the crisis. After an extremely long period of time and several attempts the gusher was eventually capped and the oil finally contained.

Environmental impact aside, what hurt BP was the US Supreme Court in 2014 upholding earlier rulings that BP had been ‘grossly negligent and guilty of wilful misconduct’. Transocean and Halliburton were also found to be partly culpable but the primary responsibility for the disaster was found to be BP’s. The reason for the negligence was traced back to significant levels of underinvestment, which some interpreted as effectively sweating off the assets in order to maximize profits.

If an oil business makes the decision to move ‘beyond petroleum’ then this change has to be profound and invested in profoundly. It has to be something that the whole business is behind. It cannot profess to be green and make significant investments in (albeit heavily subsidized) sustainable technology on the one hand, while simultaneously being accused of underinvesting in its core business to the point of gross negligence, placing people’s lives and the environment at risk on the other.

It is arguable that its reputational damage was greater because its ‘green conversion’ was so painfully and publically undermined. It is a particularly acute example of what happens when an initiative or proposition is elevated to that of an organizational purpose without the entire business relentlessly focused on it. Perhaps for understandable reasons, BP has retreated from its overtly green positioning. This disaster has so far cost BP billions of dollars. A less resilient business would probably have folded.

Beware the metaphor

Uber is interesting because it professes to want to ‘make transportation as reliable as running water, everywhere, for everyone’. At first glance this might seem like an honestly held motivation. Increasingly though, it feels more akin to an elegant business metaphor. There is no doubt that customers love Uber’s convenience, but do the drivers and employees join for the same reason? Is this the thing that matters most to both customers and employees? What really unites these groups? Is the lack of a clear purpose and a creeping sense that Uber is chasing commercial gain at any cost beginning to impact negatively on Uber’s growth?

By 2018 Uber was beset by a whole host of problems, many of which can arguably be traced back to culture and issues with corporate governance. Its founder and CEO; Travis Kalanick, has had to resign (although he retains a seat on the board) amid a sexual harassment scandal and reports of senior executives visiting escort bars in South Korea. Police in the UK have accused Uber of not reporting sex attacks by drivers. The Mayor of London has revoked (and temporarily restored) Uber’s operating licence, citing concerns over passenger safety and corporate governance. The business is similarly being challenged in a host of other jurisdictions. Uber has also been accused of spying on customers and is embroiled in disputes about the legal status of its drivers. Many of these issues seem symptomatic of a business that has adopted an elegant metaphor rather than an authentic purpose. It’s an example of what happens when a business pursues growth at any cost.

Power of purpose

A genuine brand purpose is not about traditional corporate and social responsibility. It is the authentic expression and enactment of an organization’s primary motivation, the reason why that brand or business exists in the first place, often found in the one thing that matters most to both customers and employees.

As we have seen, a brand purpose can be a powerful source of inspiration and guidance. It can help build meaningful relationships with customers and employees and unlock sustainable value for your business. But beware pretenders. Businesses that fail to embrace a genuine motivation, or worse seek to align themselves with a fashionable cause that they don’t really believe in, may find themselves undone. In business as in everyday life, your deeds matter as much as your words.