Putting brand purpose at the core of your strategy – not just as a slogan on your website – is a driver of performance as well as an increasingly important leadership issue.

All change

It’s an interesting time for brand purpose.

While the world wrestles with the pandemic, under the surface some seismic shifts have taken place – not new ones but doubling down on that analogy the tectonic plates have been rumbling along for a while and the pandemic has caused a sudden jolt forwards in the speed and direction of travel.

The debates on how to tackle climate change along with racial and social inequality are two high-profile examples where the pandemic has radically changed the conversation and thrust the issues (which were there already) into the spotlight, demanding reappraisal and more urgent action from “we the people.”

Closer to the world of business – and admittedly less existential – we’ve seen this in the issue of ‘wfh’. Very much a live issue pre-pandemic but now suddenly and probably irreversibly mainstream (from an ‘optional, nice to have’ to a ‘vital, must-have’ in only a few short months).

The pandemic has thrust purpose up the CEO’s agenda from ‘an optional, nice to have’ to much more of a ‘vital, must have’ in only a few months.

What’s it all for?

Another business issue that I believe will have a much greater long-term impact on the world is what’s increasingly being called ‘corporate or brand purpose.’

This idea has been bubbling for a while of course – and some pioneering organisations have been engaging seriously with it for some years – but the pandemic has thrust it up the CEO’s agenda from ‘an optional, nice to have’ to much more of a ‘vital, must-have’ in only a few months – but I think it’s still not properly acknowledged yet because understandably there’s been a lot going on!

Microsoft’s CEO, Satya Nadella, recently captured the challenge saying that in the future “you’ll only have permission to profit as a business if you have the consent of customers.”

In the knowledge-led industries that I pay most attention to, commentary around the unveiling of Accenture’s new brand purpose statement as part of their $90m new brand campaign highlighted the change.

Many commentators observed that Accenture’s was the most recent in a long line of purpose statements from other similar businesses.

And it’s true.

Over recent years, more and more firms have begun a push-and-pull process on purpose in a similar way that companies first began to wrestle with complicated issues of sustainability and diversity/inclusion.

The reason I say ‘push-and-pull’ is because I think it’s fair to say that on these issues, beyond a few pioneering organisations, most initially adopted a ‘good intentions’ approach.

Not a cynical one – at least not for the vast majority – but in the sense that they wanted to do the right thing, but found it much much easier to take a light-handed approach because as soon as they began to peel back the layers and even begin to engage on a more consequent level they quickly realised that this wasn’t easy and it involved new and uncertain tensions and tradeoffs – it wasn’t just a one-way street.

A recent survey among employees of US companies, for example, found that whilst 82% said they thought brand purpose was important, only 62% said their company had a brand purpose statement and even fewer, 42% said their organisation’s brand purpose had any day-to-day impact on their work.

Some businesses have the relative advantage of having been “invented” with a sense of purpose – to make the world a better place and make money doing it.

Déjà vu

For leaders of knowledge-led businesses, the parallels with D&I and sustainability today vs. a few years ago are useful to think about when it comes to purpose. The vast majority of organisations today have highly sophisticated D&I strategies and climate change policies and have begun to seriously engage with the long-term and systematic challenges that these issues demand.

Leaders today know that a line at the back of the annual report making a “commitment to diversity and inclusion” or a “consciousness of environmental impact” no longer cuts the mustard.

So it is with purpose.

Initially, the brands that found it easier to go further with purpose were the quirky pioneers. The Patagonia brand purpose example is one of the clearest, along with brands like Ben & Jerry’s and Tom’s Shoes. At a similar time, other large organisations happily discovered that what they ‘did for a living’ lent itself readily to brand purpose. The Tesla brand purpose ‘to accelerate the world’s transition to sustainable energy’ is on par with the Google brand purpose ‘to organize the world’s information and make it universally accessible and useful’. The Ikea brand purpose to democratise good design is a similarly attractive concept.

That’s not to undermine the genuine commitment these and many other brands make to their stated purpose, it’s just that it’s an easier start if you only make electric cars because you’re already fairly close to the zeitgeist when it comes to developing your purpose strategy.

Some businesses have the relative advantage of having been “invented” with a sense of purpose – to make the world a better place and make money doing it.

In knowledge-led businesses, developing a purpose-led strategy quickly becomes much more complicated and complex.

What’s the purpose of services?

But what about the rest of us – CEOs and CMOs leading organisations that sell services and knowledge to other businesses – that may have been ‘invented’ decades or even centuries ago when it was perfectly fine to have a business strategy simply to make money doing something other people wanted to buy? Simpler times.

At the same time, knowledge workers are the most likely to demand that their organisation contributes to the world beyond making money and paying taxes – and the pandemic has accelerated this trend.

In knowledge-led businesses, developing a purpose-led strategy quickly becomes much more complicated and complex.

As a recent McKinsey report on the subject put it, developing your purpose requires a “deep reflection on your corporate identity – what you really stand for – which may well lead to material changes in your strategy and even your governance.”

Yikes, that’s a bit more complicated than a generic statement about wanting to ‘unleash potential’ or something like that.

Most sophisticated knowledge-led businesses already have strong ‘as-well-as’ CSR programmes – which sit alongside the core business activity – many of which are innovative, impactful and genuinely beneficial to those stakeholders inside the company and those outside that are targeted.

The big challenge for these same knowledge-led businesses is extending purpose into the day-to-day core business (not just ‘as-well-as’) and moving beyond having a purpose statement, to genuinely living one.

Effective purpose-led strategy requires a combination of a brand-led mindset and a business-led one.

Hard not impossible

To achieve this the approach to purpose needs to be as rigorous as the approach to strategy.

It must be led from the top, involve stakeholders from inside and outside the organisation (leaders, employees, clients, investors and relevant NGOs and regulators).

It must, just as with strategy, be a process designed to develop a strong and coherent narrative that connects to concrete and deliverable plans.

That’s where the disciplines of a brand-led approach can help – branding demands a coherent narrative, not just a list of targets, to capture the hearts and minds of the human beings (both inside and outside the firm).

Effective purpose-led strategy requires a combination of a brand-led mindset and a business-led one – which is why more often than not most brand slogans don’t connect to the business and most strategies don’t inspire much excitement beyond the executive team that developed it.

And, most important of all, along the way some views may need to be challenged and specific tensions and trade-offs resolved rather than fudged, if the end result is going to have teeth, create real impact and also overcome scepticism among some of the most passionate constituencies within the organisation.

Building momentum

On the positive side – just as many CEOs have found after taking a much more determined and systemic approach to issues like D&I and sustainability – once you begin to engage with purpose on a serious level it can become a genuine source of competitive advantage – initially among employees, then recruits and increasingly among clients and your network of external stakeholders.

Three shining examples of adopting a purpose-led brand and strategy stand out in the world of knowledge-led businesses: Two I’m proud to have played a role in developing – PA Consulting and Johnson Matthey – and one I can’t just help but admire – EY.

PA Consulting has adopted a powerful new purpose-led brand strategy around the concept of ‘Bringing Ingenuity to Life’ in an increasingly technology-driven world. A concept that not only inspires but more importantly goes right to the heart of their new business strategy.

Johnson Matthey is a FTSE 100 global company that’s been in business for more than 200 years – originally dealing in precious metals but more recently evolving to be a world-leader in clean air and battery technologies. JM’s brand strategy – encapsulated in ‘Inspiring Science. Enhancing Lives.’ – also runs deep into their growth strategy and continuing evolution as a business.

EY’s ‘Building a Better Working World’ is a great brand purpose example to anyone who thinks that their own business is just too big and too diverse to be able to connect it to a unifying sense of purpose. When you dig into EY’s purpose it feels authentic and consequent – not just an empty slogan. It’s also a great example of a purpose-led brand strategy that they’ve been able to grow into over time and gradually make it more meaningful as they go.

Hunting in packs

Away from single-company purpose-led brand strategy, an interesting trend that might be a source of inspiration for leaders of knowledge-led businesses is observing networks of companies forming ‘purpose-led coalitions’ to address big, systemic issues that are close to their core business but that, as just one player, they would struggle to even begin to make a dent in.

A powerful example is the Global Fashion Agenda, where big apparel companies including Nike, H&M and Asos have pooled resources to create a sustainability movement focused on ethical supply chains.

A much older one (created 20 years ago before the modern concept of ‘purpose’ was even coined) is the Marine Stewardship Council. Originally set up as a joint venture between the WWF and Unilever (and now funded by a much wider group of stakeholders), the MSC’s initial purpose was to enable producers like Unilever to identify and source from sustainable fisheries — a certification that prior to the MSC didn’t exist.

This is certainly something that knowledge-led businesses should consider.

Imagine, for example, a combination of a global law firm, tech company, bank and airline getting together to make a dent in enabling better and fairer access to legal international migration services.

The past is a foreign country

The pandemic is changing many things. Stimulating reappraisals of long-held norms.

One of those is an acceleration in the forces driving the market demand for purpose-led strategies in businesses of all kinds.

Whilst this creates some big challenges for leaders guiding their stakeholders through these changes, it also throws up new opportunities for those that choose to get ahead of the demand and embrace the implications rather than try to mitigate them.

There’s no going back so we might as well go forwards. With purpose.

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Ian Stephens

CEO and Founder of Principia, the world's leading strategic consultancy specialising in brand-led transformation for knowledge-led businesses.