Does Obsession with Purpose Harm Profit?
MarketingWeek recently published an article about a major Unilever investor, fund manager Terry Smith, who denounces the company’s focus on purpose. Smith accuses Unilever of “virtue signaling,” describing the purpose-driven strategy as “ludicrous.”
Smith specifically zeroed in on Unilever’s Lux soap brand:
Lux brand purpose:
Inspiring women to rise above everyday sexist judgements and express their beauty and femininity unapologetically
Smith’s response:
“I will leave you to draw your own conclusions about the utility of this,” Smith wrote, adding: “When I last checked, [soap] was for washing.”
Being People First Drives Profit Growth
As an advocate and architect in developing purpose-driven brands, we at Bovitz have heard this type of criticism before. It’s common and understandable. We appreciate the perspective and invite the dialogue.
The thing is, we’ve seen purpose-driven strategies work repeatedly in yielding growth, all kinds of growth. Putting People First – their needs and their wishes – is the spark not only for good vibes but also true and consistent business growth. The way we see it, it’s a simple equation, really:
Vs.
Truly Putting People First empowers and emboldens people, both employees and consumers, creating the necessary affection, connection, and loyalty for durable financial success. Focusing on profit at all costs can devolve into just managing people and resources to drive growth in the near term, without the unity and cohesion needed for strong business performance over the long run.
Moreover, Putting People First gives your brand the chance to say something inspirational and not just functional. It means telling a brand story of utility AND progress. When you put profit first, it’s hard to get past a story of utility alone.
But, What Do The Data Say? The Results Speak For Themselves.
We’ve conduced proprietary research tracking consumer perceptions of brands across a variety of dimensions for years now, including purpose-driven attributes. The following is a brief, albeit representative, snapshot about one of Unilever’s brands, Ben & Jerry’s, compared to a couple of other leading brands.
In this example, it’s clear that Ben & Jerry’s purpose-driven efforts are coming through:
|
|
Ben & Jerry’s |
Baskin-Robbins |
Dreyer’s |
|
Is inclusive of all different types of people |
62% |
62% |
52% |
|
Operates with integrity |
61% |
59% |
46% |
|
Genuinely cares about things other than just profits |
53% |
38% |
31% |
|
Actively supports causes I believe in |
42% |
23% |
22% |
And consumers’ behavioral intentions (which drive the bottom-line) are being impacted favorably for Ben & Jerry’s as well:
|
|
Ben & Jerry’s |
Baskin-Robbins |
Dreyer’s |
|
Net Promoter Score (NPS) |
44% |
39% |
32% |
|
I look forward to seeing what it does next |
36% |
21% |
24% |
|
I would be upset if it went away |
34% |
34% |
18% |
|
I make it my first choice among similar brands |
19% |
15% |
13% |
|
I want to deepen my affiliation with it |
10% |
6% |
7% |
But don’t just believe us. In the book Corporate Culture and Performance, John Kotter and James Heskett, both professors at Harvard Business School, demonstrate that purposeful, value-driven companies outperform their counterparts in stock price by a factor of 12.
So, How Might A Brand Become More People First?
Here are just a few ways to consider:
1| LISTEN WELL TO CREATE & LIVE SHARED VALUES:
Listen to your employees. Like really listen to them. Seeing them as diverse people will help you align corporate purpose with individual purpose. Do the same thing with consumers; listen frequently and intently.
2| BE ADAPTABLE TO PEOPLE’S EVOLVING NEEDS:
People change. Create systems that are nimble enough to see and react to trends.
3| BE CLEAR ABOUT BRAND UTILITY AND BRAND PURPOSE
How are your product(s) and brand experiences useful and valuable to people, literally improving their lives? Define it, empirically measure it, and keep accountability around it.
4| MAKE PURPOSE THE DECISION-MAKING LITMUS TEST
Filter everything through this lens. How does this decision affect employees and consumers alike? Does it align with our share values and vision? Powering a new way forward means embracing your own vulnerability and going beyond your own personal motives and lens. Putting People First is the litmus test and thus the change agent for growth.
5| BE RADICALLY AUTHENTIC
Be truly, honest, transparent, and forthright. As much as possible, share about your pricing, production, labor, sustainability, all of it. Humanize your brand with the honest truth.
We hope you take the People First journey along with us and leave you with this inspiring quote:
Prestige is now one of the fastest-growing parts of Unilever and another example of how putting purpose at the heart of your business is a pathway to sustainable growth.