What's Going Wrong With Brand Purpose - And How To Fix it

Has anyone ever told you you've completely?lost the plot??

Harsh words right?

But that's what Terry Smith, manager of the ￡29bn Fundsmith Equity fund, said about Unilever last year - in response to their poor -0.2% annual return to his shareholders.

He wrote that:

“A company which feels it has to define the purpose of Hellmann’s mayonnaise has in our view clearly lost the plot.?The Hellmann’s brand has existed since 1913, so we would guess that by now consumers have figured out its purpose (spoiler alert — salads and sandwiches).”

In his annual letter to investors last month, Terry Smith was back on Unilever’s case, now in disbelief about Lux’s purpose statement.?

In his words,?"this year we are moving on to soap. When I last checked it was for washing."

Who has really lost the plot when it comes to brand purpose and how can we fix it?

It really comes down to 5 things.?

The 5 problems with purpose

1. People have forgotten what the word ‘purpose’ means.?

Purpose is ‘the reason for which something is created or for which something exists.’

No wonder Smith gets riled when he hears Alan Jope, CEO of Unilever state that, “Fighting against food waste – that’s the purpose of Hellmann’s.”?

Of course, Hellmann’s whole reason for being is not just fighting against food waste.?

It’s a condiment.?

Sold by a for-profit business.

But what if Alan Jope had said Hellmann’s purpose is real taste and less waste.??(As some of their copy states on their website)?

Hellmann’s added to a wrap of yesterday’s roast pork leftovers makes it taste better and ensures you don’t waste it.??

And Hellmann’s ESG initiatives and communications are also focused on encouraging us to waste less food.

Great.

Tick in both boxes.

Less sense of having “lost the plot.”

2.?Purpose is being driven by advertising agencies excited by an ‘advertising for good’ campaign idea.?

Not all ad agencies!??Many are truly wonderful.??

But some are overly excited by advertising a cause then overblowing its importance - convincing clients to rewrite their brand strategy to declare a new definition of why their business exists.??

This has been exacerbated by The IPA (the Institute of Practitioners in Advertising) defining purpose in?their report?as,

“The reason a commercial brand exists beyond maximising profit?to produce other meaningful forms of positive impact for individuals, societies, or the environment.?It communicates both an organising principle for action in the brand’s present and an aspiration for its future”.

What?

Unless you’re a charity, your purpose,?the reason you exist,?needs to include ways to continue to serve customers to make profit.??Any?‘organising principle for present and future action’ must have applicability?to better customer experiences, employee experiences and product innovation strategies that drive profit.

Purpose should not be the reason a brand exists BEYOND making profit. It must also help to drive profit.??

Otherwise, you quickly hit the three other problems with purpose that are rife at the moment.

3. Problems with purpose: lack of authenticity

The third problem with purpose is lack of?AUTHENTICITY.?Or just not telling the truth.

There are some great definitions of 'why we exist' out there from brands like Tesla, Warby Parker and Patagonia.

But these don’t suit every brand.??

If you’re not in business to save the planet, solve racial inequality, save the whales… then don’t pretend you are.??

The idea that your brand needs to be ALL about social mission – that 'brand purpose' trumps everything else you do - is tripping up countless CEOs and founders.??

Look instead at the sensible guidance from the Business Roundtable in 2019.??They released a?Statement on the Purpose of a Corporation?that was signed by 181 CEOs who committed?‘to lead their companies for the benefit of all stakeholders – customers, employees, suppliers, communities and shareholders’.

Note the order here.??

Customers and employees first – not the whales.??

Because if you’re a for-profit business, first and foremost you have to identify how you’re helping your customers and employees to thrive.?Without understanding this, you won’t have a business much longer.???It’s the first step in articulating how can have a positive impact on people AND make a profit.???The next step is to?also?define how your business can benefit other communities – how you can do good as you grow.

This to me is the holy grail of PURPOSE statements, and is one of things I teach people to create for their clients in?Brand Strategy Academy.?

One authentic, relevant, phrase that addresses all the people who will ensure your business thrives. A statement that identifies how customers are helped, employees grow, and society benefits.?One statement to inform marketing, HR, innovation, and ESG.?

Don't believe this is possible?

Consider Microsoft's definition of why they exist:

Their technology clearly underpins this.??Because that’s what they sell and how they will ensure they remain profitable.??

But the statement also creates a?platform for the Chairman and CEO, Satya Nadella, to focus on empowering a growth mindset in employees. Helping them understand how to achieve more.

“He’s remained consistent to his belief that this growth mindset is critical for Microsoft and that it is very powerful… We have growth mindset memes on the coffee mugs and each week Satya has a “Mindset Moment” that he broadcasts to the entire organization. Sometimes it’s about something going on with a major initiative, sometimes just an observation or anecdote he wants to share. All of these efforts act as a subtle reinforcement.”?

Cherise Mendoza, Head of HR, Microsoft Canada.

And?the same purpose statement directs their ESG, with their global skills initiative having reached?30 million learners as of March 2021 and $1.9 billion contributed to non-profits in donated or discounted technology and services.

One statement – addressing all key stakeholders in an authentic way that’s rooted in what they create and sell.

Similarly Reckitt have rooted their purpose statement in their products, customer needs and a broader societal benefit.

We exist to protect, heal and nurture in the relentless pursuit of a cleaner and healthier world. We fearlessly innovate in this pursuit across out Hygiene, Health and Nutrition businesses.

This extends to the product brand level, like the Finish dishwasher brand.

This 'Glasses of Drought' initiative was built from the customer promise that you get sparkling clean dishes first time, every time due to their advanced cleaning properties. This means that there is no need for pre-rinsing, which they realised saved the equivalent of half a lake of water a year in Turkey. This then led to a really holistic program of initiatives, that included Glasses of Drought and the Water Index (you can hear all about this in the On Strategy Showcase story here).

4. Problems with purpose: lack of coherence

Purpose statements are too often created in isolation from similar initiatives describing WHY a business exists, and, even more importantly, HOW people are expected to act in order to achieve it.???

The CEO authors a purpose statement in 2021.

Marketing created a brand promise in 2019.

HR ‘did the values’ in 2017 and what are you left with???

Writing on a PowerPoint slide – not a connected and coherent strategy.

You see some of the world’s most famous brands struggling with this (see my piece on CISCO?here).?Even Nike?have squished together their mission and purpose.

This conveniently forgets two of the most important guiding principles for creating any strategy: coherence and sacrifice.?

“A good strategy doesn’t just draw on existing strength; it creates strength through the coherence of its design.??Most organisations of any size don’t do this.?Rather, they pursue multiple objectives that are unconnected with one another or, worse, that conflict with one another.”?

Good Strategy, Bad Strategy – The difference and why it matters,?Richard Rummelt

Ultimately the?strength of this?coherence is not just about clarity or unity - it leads to results, as Pfizer's CEO, Albert Bourla?explains:

“If you stay true to your purpose and it is very clear to every person that is working in this company, then there is a very clear direction, there is a compass, there is a star that is telling you this is where we all go.?That unites the organization, creates cohesiveness, and brings results.”

So don’t just layer a purpose on top of the rest of the mess in your ‘brand onion', or 'brand key' or whatever overly-complicated model you've been saddled with.??

Do the work to define WHY you exist, and WHO you need to be and HOW you need to do things in order to live up to this WHY. Then?write this up as one cohesive strategy and retire the rest.

Articulating a purpose is making a choice about WHY your business exists, but as Willie Petersen writes in?Strategy Is an Art of Sacrifice,

“A choice is not a choice until we decide what we will give up. We must subtract first, then multiply."

5. Problems with purpose: lack of commitment

It’s not enough to hand off a purpose statement to your ad agency to create a lovely launch video and campaign.??It must guide how you act as an organisation.

"What separates a truly great brand from one that is merely good is whether the company is capable of a complete and thorough implementation of its brand as its business."

Denise Lee Yohn, What Great Brands Do

In pwc’s ‘Putting Purpose To Work’?survey, although 79% of business leaders agreed that purpose is central to business success, only 34% were actually using it as a guidepost for decision making, and only a third were aligning recruitment strategy, employee evaluations and rewards with why they said they were in business.?

When this happens it’s only a matter of time before we loop back to number three on our list. Suddenly the purpose you’re putting out into the world is not seen to be authentic. Employees aren’t being tasked to deliver it, nobody's measured on it, leadership aren’t talking about it and customers begin to call you out as ‘purpose-washing’.???

A new brand strategy is a signpost at the start of a journey, not a completed project. It doesn’t just require coherence in its articulation, it requires coherent action.

“[It’s] a journey that requires constant and relentless commitment. Not surprisingly that requires Satya, and our other leaders, to keep reinforcing it again and again in their actions and in their communications. That relentless commitment is critical. And, over time, we’ve started to see this starting to breathe and take off inside the organization.”

Cherise Mendoza, Head of HR, Microsoft Canada.

Authenticity, coherence and commitment.?

The commitment feeds the authenticity, but only if people first have clarity on what they are committing to.

In Summary

So what can you do to bring purpose back from the brink of madness?

Rein things in.?

• Define your purpose carefully – with the right research inputs and leadership engagement, and as part of a cohesive brand strategy.?
• Ensure it’s an authentic, relevant phrase that addresses all the people who will ensure your business thrives.?
• Call out people who walk into the CEO’s office and present any purpose statement that’s not rooted in their product(s) and the primary people they serve (customers and employees) FIRST.
• ALSO ensure that any purpose statement encompasses a commitment to something that has broader positive implications for society.?
• Then commit for the long term.

If you want to know how to develop an authentic, cohesive brand strategy, that clients are engaged with and committed to,?join me in Brand Strategy Academy.?