Brand for Good: Create Your Purpose Flywheel
Becoming a “Brand for Good” is rooted in the idea of finding Purpose, being guided by and acting on it.
We believe Purpose has two components: one being focused on your customer, Being Great, and the other focused on broader stakeholder groups, Being Good. A company and brand can find Purpose in seeking to serve and create value for its customers and multiple stakeholders.
Some may ask, why does this focus on Purpose even matter?
It matters because consumers and employees are demanding it, and data shows that results follow:
62 percent of consumers want companies to take a stand on current and broadly relevant issues such as sustainability, transparency and fair employment practices.
Employees considered Purpose to be more than twice as important, on average, as traditional motivators such as compensation and career advancement.
More than 90 percent of companies with a clearly defined purpose deliver growth and profits at or above the industry average
A focus on Purpose has led to stronger business performance for Unilever’s purpose-led brands, growing almost 70 percent faster than the other brands in its portfolio
A way to think about the power of Purpose is to consider Jim Collins’ flywheel concept, something that he references as the “power of strategic compounding.” A focus on Purpose can have this compounding effect that starts to fuel itself and fuel success. (Please note so as not to confuse: we acknowledge that we are using “Great” and “Good” differently than Jim Collins speaks of in his renowned book, “Good to Great,” in which he introduces the flywheel effect.)
How does a focus on Purpose create a flywheel? The central components are Being Great and Being Good. Here’s how it can work.
Start by Being Great, which means building great products and experiences and marketing responsibly. Building great products begins with putting customers or consumers at the center of what you build, understanding their needs, desires, and motivations. In doing so, you can focus on creating shared value—not just value for the company when they purchase, but value in their experience with your product. What problem are you solving for them? How are you making their experience as frictionless as possible? Really think about serving your customers by deeply understanding them as people, what’s important to them and their lives, what they value, what would be helpful to them. While emotions inform purchase decisions, to drive purchase and, importantly repeat purchases, a product has to meet rational requirements, too—meet a need, solve a problem, offer a great experience, and deliver a great value proposition.
An important component beyond product is how you market to consumers. We advocate Integrity Marketing, responsibly speaking to consumers’ motivations rather than setting unrealistic or societal expectations. Responsible marketing communications can also include being transparent, respectful, positive, and authentic. It can mean offering helpful and valuable information that is relevant to your customers, again being in service to them.
By being great, you’ll delight consumers and build loyalty, in turn leading to positive word-of-mouth and strong business results. The flywheel is now in motion.
Those strong business results give a company and brand the opportunity and the resources to invest in Being Good. Being good means standing for more and being active in the world, meeting the needs of additional stakeholders. We believe standing for more can range from being guided by a broader purpose and values (think Kellogg’s and its Purpose of Nourishing families so they can flourish and thrive) to having a purpose be deeply embedded in a company’s ethos (think Patagonia, All Birds, Rothy’s, or Pela). It can further extend to making the commitment to be a B Corp. Importantly, as a baseline, being good must include a commitment to Corporate Social Responsibility (CSR) and/or Environmental, Social and Governance (ESG) principles; this is at minimum what consumers are seeking from companies today.
Importantly, Being Good shouldn’t stop at simply articulating a purpose. Companies and brands must take action. At minimum, companies should be contributing to social causes. Others will go further and engage consumers in participating in doing good (think Patagonia Action Works). Some companies will speak up against injustices (think Starbucks).
Being good will build both brand power, drawing more consumers into your brand and purchase funnel, and build devotion, deepening loyalty and growing advocates. Brand power, in particular, can lead to strong business results such as pricing power, resulting in higher profits, and permission to offer even more products to customers, allowing the brand to extend its reach. It can also lead to having a strong employer brand, earning devotion from employees who are motivated to further contribute to the company’s efforts.
The brand power and devotion that lead to higher profits and strong business results give the business the means to further invest in building great products and experiences for customers. Employee devotion and motivation further fuels the company’s efforts and positively impacts business outcomes. And, the cycle continues.
In summary, the Purpose Flywheel centers on Being Great and Being Good.
Being Great leads to customer delight and strong business results. The positive business results allow a company to invest in Being Good. Being Good earns Devotion from customers and employees. That devotion leads to brand power, which further fuels strong business results, allowing a company to deepen its investment in Being Great. And the flywheel turns.
A final point. To realize the impact of Purpose, researchers have found that companies also have to drive for organizational clarity.
Research by George Serafeim and Claudine Gartenberg showed that company’s with the best accounting and stock performance not only operated against a defined purpose, but were also considered high in management clarity (e.g., “Management makes its expectations clear; Management has a clear view of where the organization is going and how to get there”). In other words, you need to also be a well-run company that embeds purpose down into the organization. They suggest that middle management needs to understand and buy-in to the company’s purpose so they can activate against it in the ranks.
Conclusion
There’s a reason Purpose is so central to business discussions today. It’s not just that stakeholders are demanding it, from consumers to employees to shareholders. It’s also simply that Purpose can be a unifying, powerful force to deliver on stakeholder capitalism. It is at the center of a flywheel that can create value for all and make your company a Brand for Good.
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The Agency Oneto is a disciplined yet agile business and brand strategy agency whose mission is to partner with leaders to make a positive impact on their business and brands and for their consumers and teams, unlocking potential.
We do work in Business Strategy, Brand Strategy, Portfolio Strategy, Brand & Product Positioning, Brand Architecture, Marketing Strategy, Content Strategy, Innovation Strategy & Process, Consumer Insights, and Trend Studies.
We also lead workshops and facilitate strategy and business planning sessions, provide advisory services, and offer Executive Coaching.