Driving profit and performance in uncertain times
Learn how purpose drives profit and performance, even in uncertain times, through the results of our research with Norwegian companies.
A well-defined purpose not only clarifies why you do what you do. It’s a declaration of intent that keeps leaders in check, allowing them to benchmark their decisions. Purpose is your corporate compass that helps your business avoid knee-jerk reactions to short-term opportunity and keep the business entity on track.
Although the concept of purpose is not new, our research shows that only 30% of Norwegian companies adhere to a purpose. In this white paper, I share important insights from our study, which proved that companies with a meaningful purpose are the most profitable.
Drifting from purpose
Our research shows that 66% of Norwegian companies have adopted the best practice of defining their core values. Placing all their faith in core values to describe their business only tells us HOW the company is. It misses out on a fundamental question: WHY does the company exist? Your purpose is not what you do, but why you do it. Bringing a product or service to market isn’t enough. You need to consider; why this product? Why now? As a business leader, you need to think about the bigger impact you want to create in the world.
Let’s look at Hurtigruten as an example
Hurtigruten is a passenger and freight shipping service along Norway’s western and northern coast between Bergen and Kirkenes, hugely popular with tourists and Norwegians alike. Hurtigruten’s purpose is: to offer safe, unique, active and sustainable experiences, which create memories for life. In 2011, NRK, the Norwegian government-owned radio and television public broadcasting company aired 134 hours of Hurtigruten voyages as part of their Slow TV campaign. Half of Norway watched the Hurtigruten voyage on TV, with people meeting the ship at certain points to see themselves on TV as extras.
This purpose statement is compelling, inspirational, and timeless. It’s as true for Hurtigruten in 2017 as it will be for Hurtigruten in 2027. And another important point; this purpose works to attract both customers, investors and staff alike!
Mission’s views on purpose are not abstract. They come from our experience with clients since 2001. We’ve experienced time and again how the deeper fundamental intent of purpose triggers something in our clients that took projects and processes further and made clients aware of how to use purpose to create an advantage.
Learn more about the role of purpose in branding in this white paper.
Today, change is the new normal. When we look at the world it seems to have lost purpose. Terror is rampant, warming is global, money is scarce. And meaning — the answer to the questions such as, “why we exist?” is elusive.
Continue reading to learn
- How your brand can thrive from the power of having a purpose
- Why your brand needs to develop resilience in a changing world
- How and why being authentic is so important in times of change
We live in a time of unprecedented flux and transition, with business challenges appearing from many directions. It doesn’t matter whether you’re a “big brand” or a “small brand,” the brand rule book has been rewritten and disruption is the new normal.
At a FUSE conference in the U.S. a few years back, we explored the strategies needed for success in this changing landscape. The seminar focused on how design is working to reach the increasingly mobile and difficult to define consumer, and uncover the frameworks innovators are using to build the new age of brand and design.
The Mission Purpose Report
In our report The Mission Purpose Report, we acknowledged that purpose sets businesses on a more valuable course for creating a strong brand. Purpose provides focus, unites culture, motivates, differentiates and creates an emotional connection with stakeholders. In Norway, however, many businesses are unaware of the power of purpose.
There are many successful enterprises in which the purpose is no more than a confection, providing a little boost to morale when needed, but only peripheral to the central dynamic of maximizing profit or pursuing some other kind of tangible success.
A study from EY Beacon Institute shows that the change in the economic landscape has prompted business leaders to a fundamental rethinking within many companies about the how and the why of their business.
It is relatively easy for a company to adopt the rhetoric of a feel-good purpose that articulates an aspirational reason for being. But, actually living, breathing and effectively demonstrating a commitment to that purpose is an infinitely larger task. Yet it is an effort that can pay off substantially in our disrupted world.
Companies with purpose are the most profitable
Depending on who you ask, some companies would declare that their purpose is “to make money”. It’s a fair response, without money all your dreams and ambitions as a business would simply remain just that. But out of the 100 businesses studied in our Purpose Report, those who have a higher calling are more profitable.
In our study, we found that companies with a meaningful purpose have a 41.8% greater profit than companies without a purpose! Perhaps these companies are stronger, that a meaningful purpose helps them focus and thereby differentiates them in some changing way?
Purpose = profit is a correlation hard to ignore, demonstrating that there’s more to defining purpose than simply good intentions.
Having a purpose doesn’t necessarily make your company purposeful
The right kind of purpose is important, but this must be integrated into your organization to fully unlock value. Our study shows that companies with a meaningful purpose stand out for both articulating a purpose and for making significant progress in driving this into their corporate DNA. Integrating purpose brings benefits, but just talking about purpose — without action — could expose a company to risk.
We know for a fact that purpose drives value in both the short and long-term. However, if purpose is merely words that are not matched by deeds, companies can face negative reputational risk and loss of trust. Purpose should never be simply a tool for improving your reputation. Unfortunately, this is still how many large companies think of it in practice.
A company should provide insight on how to turn rhetoric into reality
A purposeful company knows it will have to go beyond satisfying the material interests of stakeholders and attract customers or avoid liabilities by establishing an image as “good citizen” or “responsible company.”
A purposeful company will align their strategy and decision-making with a purpose that responds to the needs of their stakeholders and is grounded in the heart of what they do. They constantly evaluate where they are on their journey and what needs to change, they set their own agenda, and follow it with conviction taking concrete steps to make sure they succeed.
How to decode and articulate a brand’s purpose and stick to it
How can you be authentic without knowing who you truly are? Purpose is the reason a brand comes to life or is a set of reasons that are behind the refreshment of a brand’s positioning in a category. A brand needs to stand for something — whether we want to call it purpose or a manifesto or ideals, it doesn’t matter. We can collectively call them a set of beliefs.
Learn why serious investors prefer brands built on purpose.
Brands need to stick to a set of beliefs and that requires resilience. So, what do I mean by resilience? And why is resilience important when it comes to building a purposeful brand? Because a resilient brand is a brand that endures. Resilience = purposeful brand, which shows that truth runs deeper than a strapline and a campaign.
Are you building a resilient brand?
Any brand can adopt resilience as a virtue in its life cycle. Before a brand becomes a 100-year-old icon, it becomes a 1-year-old startup, a 5-year-old trendsetter, a 10-year-old category leader, and a 20-year-old category definer.
Resilience is needed at each and every stage of the brand development life cycle — it is required when a brand decides on its creative positioning, or when it expands distribution, or when it adopts a multi-channel strategy or when it writes down and codifies it beliefs or when it decides how it wants to see itself in 10 years time.
Is your brand resilient just because it has been around for 20 years? The surprising answer to that is no. Remaining a player in a category does not equate to resilience. Resilience is a forward moving and evolutionary ethos.
Maintaining a high level of customer service = resilience
Some brands believe in customer service as their lifeblood, some brands do it as an afterthought, some brands fail to acknowledge the importance of it and some brands meaningfully strive to attain excellence in it. Striving towards a high level of customer service requires resilience, and in today’s world a strong dose of it.
Social media magnifies customer service errors, global public relations disasters can happen due to a single tweet or Facebook post, networks magnify and multiply the impact of a single customer service error, sizable amount of backlash can happen from isolated incidents, etc. This doesn’t mean that brands need to be on the back foot when it comes to customer service. Resilience is a trait that signifies progression and development, and not stubbornness and a path to irrelevance. Resilience, according to Google, is about creating a culture that is so sticky that it becomes heart wrenching for people to leave the firm.
Today’s leading companies stand out by standing for something greater than themselves. They very often are resilient, but most of all they have integrity. Integrity is one of the keywords that drives a purposeful company. Integrity helps a purposeful company stay focused and deeply committed to its role. A purposeful company know how it can build on its strength and create a deeper connection with its “community,” it be a stakeholder, a supplier, an employee or a customer.
Download your free copy of the Mission Purpose Report today.
References:
Mission: Purpose Report
Nikos Mourkogiannis: Purpose
EY Beacon Institute
This article was written by Inki Annweiler, and was first published on Mission’s website. Find out what other fascinating issues we write about.
