How Purpose can Drive Change and Innovation

Axa Asigurari1288

 

 

Change has become a recognized game-changer for enlightened and progressive businesses. In this series we’ve attempted to define why Purpose and Profits should be linked and explained the importance of building a system to measure the impact Purpose has. In this post, we go further into the notion of Purpose as a catalyst for change.

In a business environment where change is trumpeted as the only constant, its not surprising many organizations recognize the imperative to build deeper competency in change management. Sadly though, as John Kotter the veritable “father” of change management has asserted, the reality is that most large change initiatives are blighted with sub-standard results and some are dismal failures.

Why? Why? Why?

Well, according to Gary Hamel, the issue is that organizations are spectacular at managing the implementation of top-down change but really shoddy at embedding the reasons (and rewards) for change at a deeper psychological level. And secondly, in a world fixated on agile and nimble companies, they seldom create a business that can adapt – and innovate – quickly.

Simplistically the failures seem a classic case of “the process” over “the people”

Perhaps a better way forward would be to look at change through an entirely different lens.

Shift the question from “Change – to what end?” to “Change – to what purpose?”

In this alternative world imagined by Hamel lies change platforms that syndicate and democratise change across the organisation, that are based on initiative rather than mandate and that encourage free-form experimentation rather than project-managed milestones. Such an approach, encourages wider and more accountable participation, fosters honest conversation, diversifies solutions rather than seeking to close everything down to a single answer and seeds local experimentation that can then be refined in a less risky environment before becoming part of the way forward.

For those caught up in the “innovate or die” zeitgeist, the scenario above sounds like nirvana.

But what if we could further elevate the potential that these changes would be embraced more readily, and more deeply?

What would happen if those change platforms were purpose-focused– if they focused on changes that could change the world as well as the bottom line?

What if the changes being sought on an altruistic level (intentional purpose), were linked to the pursuit of commercial benefits that were tangible and sustainable (functional purpose) would that inspire managers and people in the businesses themselves to participate in the ways that Hamel describes?

Could that help deliver the bottom line benefits that growth-focused change management cannot?

This isn’t a new thought.

In 2009, two McKinsey principals, Carolyn Aiken and Scott Keller, wrote an article about the irrational side of change management in which they identified a range of pre-conditions for successful change:

  • A story that focuses on the impact of change on society, customers, investors, teams and that is compelling to individuals not just the organisation; that people feel they “own” because they helped author it; and that uses a combination of urgency and dreaming to spur momentum and incite change.
  • Clear behaviours that are expected from all involved, that are publicly reported on and that are embraced by all, rather than led by a select few.
  • Aligned and reinforcing mechanisms, such as systems, processes and incentives, that are seen as intrinsically fair and that are long on meaning because they are offered as a surprise rather than a right or an entitlement.
  • Skills enhancement that focuses on what people feel and believe in as well as what they think, and that build capabilities through a programme of forums and fieldwork.

 

What sounded like an irrational premise to them then, sounds incredibly like a Purpose-driven and Purpose-founded set of conditions to us now.

126Yet there remain many who are Purpose-skeptics. Who believe that Purpose is merely a business Polyanna. These include renowned Australian marketing scientist Professor Byron Sharp has taken Jim Stengel, one of the key advocates of purpose-driven brands, to task over whether such brands are as effective as Stengel states. Sharp questions whether the methodology used to arrive at Stengel’s list of successful purpose-driven brands is sound.

That skepticism may be well-founded. After all, as we noted in our last article in this series, the current lack of an accepted measurement system to effectively monitor the competitive difference that purpose injects is worrying. But, there was a time that measuring Brand Value didn’t exist either.

Here’s what we’d contend is unassailable.

Change requires people – not processes – to do something different tomorrow than they do today. It’s messy, complicated, frustrating and the attraction to slip backwards toward the current status quo remains high.

Making the change, and sticking to it, therefore requires an appeal to both the head and the heart of your people. In organizations who have a clear, distinct and embedded Purpose, that appeal becomes infinitely easier and infinitely more motivating.

After all, as our PROSCI Change Management instructor was fond of saying, “Change is all about the people, Stupid”

We think Gary Hamel would agree.

Mark Di SommaThis post was co-authored with friend, brand zealot and cranium tickler Mark Di Somma. New-Zealand-based he’s a creative strategist, keynote speaker and writer for Branding Strategy Insider. For more than 20 years Mark has helped decision makers, brand owners and brand agencies define, articulate and elevate the value of their brands. He brings a refreshingly New World perspective to issues around compelling brands, competitive value, purposeful cultures, market leadership and responsible ideas. Follow him at @markdisomma

We’re committed to a series of posts on this subject. Look for them over the next few weeks. Your feedback, comments and input is appreciated.

Measuring Purpose. The next key business imperative

Nike-FuelBand-MakeItCount

In the first article in this series on purpose, we looked at the nature of purpose and espoused the view that purpose has two facets: functional (where it describes what the company must get done); and intentional (where it articulates what the company would like to see change in the wider world.) In this article, we look at how purpose and its impacts might be quantified and the benefits that a measurement system might bring.

We’re a species of builders. Building has ensured our survival since the beginning of time. And whether you’re building a home or a business, measurement is a critical accompanist to activity. Measurement is so important to us that one of the most profound upheavals in European history was driven by a desire for common units of measurement. Measuring and building are, therefore, inextricably linked in our DNA.

“Measure what matters because it matters what you measure”

For years we’ve had common measures and yardsticks for ascertaining the relative health of organizations. Some objective measures– like EBIDTA – and some more subjective but no less important – like stock prices. More recently, the Internet has become a measurement bonanza for business leaders and meta-trends like “big data”, highlighting just how much opportunity and potential lies in the ability to track every click, measure every interaction and derive sentiment and “truth” from every social engagement.

With such a bewildering array of data points to measure, how does a business leader choose the right set? No business would ever just measure CAPEX and leave OPEX uncalculated. So, how can a business leader ensure they’re measuring a balanced set of data points rather than just one’s that might give them an erroneous and biased view of their organization?

In particular, how do we find consistent and verifiable ways to measure intangibles like Purpose?

And why would we spend time tracking that measurement?

Firstly, there’s plenty of evidence to show that fuelling purpose fuels performance. According to Deloitte’s Culture of Purpose 2013 Report, a strong sense of purpose has been shown to contribute to long term success. Cultures with purpose report that their employees are more likely to perform well and the businesses concerned experience strong financial performance. They also have a distinct brand, a clearly defined values and belief system, greater customer satisfaction and better employee satisfaction. As far back as 2011, the father of organizational effectiveness John Kotter correlated “high performing cultures” and financial performance in his book Corporate Culture and Performance

The data is there and the recommendations pretty unambiguous.

So with all the lot of discussion about why it makes sense, who it affects and what it can be used for, why is it that putting metrics and measurement to purpose seems so elusive?

And what metrics might we use?

There are some suggestions in a recent article in MIT Sloan Management Review. Companies focused on customer focus might look to their Net Promoter Score for proof of whether their purpose is effective. But that strikes us as a blunt tool when used alone. For those that seek to put their employees first, the authors reference employee engagement scores. Again, a rather ambiguously defined metric and certainly not one operating to a universally consistent standard of measurement.

So, if we agree that “Purpose” is an aspirational goal for any organization, something tantalizingly just beyond reach, shouldn’t the measures of success relate directly to the progress being made towards that purpose?

Case in point, if you’re IBM and you’re committed to a smarter planet, then the number of new patents, the levels of publishing and the dollars being invested in R&D are all good purpose-performance indicators. Perhaps peg those numbers as a percentage of EBITDA or even as part of the P/E ratio calculations. Look to at the correlations between outputs and profits. After all, if the Deloitte findings are correct, purposeful organizations should be capable of higher than average future earnings. If you’re Zappos, and your purpose is to deliver happiness through service, then those indicators would be things like staff churn, average tenure of customers, Net Promoter Scores and the numbers of repeat customers. Again, they show how the pursuit of happiness is benefitting the business.

So can we align pursuing purpose with metrics that provide clear proof of the impact on the business? 

And if we can, why hasn’t it happened yet?

One of the key issues with purpose is that it has traditionally been expressed as an aspiration, and that aspiration has been isolated from the rest of the business. What’s been lacking is further drilldown that details what will be achieved, when and how. In other words, the financial impacts of the projections have been isolated from the purposeful impacts.

For example, Nike sees its purpose as being “To bring inspiration and innovation to every athlete in the world.” In order to quantify how the pursuit of that purpose boosts the bottom line (and therefore why purpose is good for the business), Nike would need to quantify the impact of inspiration, innovation and the number of athletes in the world on their bottom line. Remember, in Nike parlance, we are ALL athletes.

So … 10 questions that might go some way towards doing that:

  1. What do we define as inspiration and what part do we play in that inspiration?
  2. How many inspiring products do we sell (and therefore who do we inspire and to do what)?
  3. What did those products cost to develop?
  4. What do we make from them?
  5. To what extent are we making money from products that continue to inspire vs those that are re-inspiring vs those that will inspire into the future?
  6. What is the “inspiration” contribution of our product versus that of the sponsored athlete, high school jock, weekend warrior wearing it?
  7. What innovations have we introduced in the last year for athletes?
  8. How many of them have we sold?
  9. What’s still in development and what are the projections for those products in the business case?
  10. How quickly is our innovation cycle and being realized in terms of saleable goods and what effect are those innovations having on our bottom-line?

But is all this introspection about measurement worth it?

We believe so.

While some may see quantifying the impact of aspiration as problematic, there is good precedent to pursue this.

There was a time when considering a “brand” as a legitimate asset on a balance sheet was considered heresy. Business today largely accepts the notion of “a brand as a genuine asset” as mainstream. Ergo, if purpose can galvanize employees to be more effective, entice partners and vendors to greater heights and drive disproportionate customer preference, loyalty and sales, doesn’t it behove us all to make more of an effort to try quantify its contribution?

Ultimately if purpose is to be embraced as a competitive force, those organizations that are genuinely putting it at the core of their strategy, must be able to demonstrate the rewards. To themselves. To their investors. And, let’s be honest, to a legion of business people who still remain skeptical about the power of purpose.

How are YOU measuring Purpose in your organization? Do you believe it warrants measurement?

Mark Di SommaThis post was co-authored with friend, brand zealot and cranium tickler Mark Di Somma. New-Zealand-based he’s a creative strategist, keynote speaker and writer for Branding Strategy Insider. For more than 20 years Mark has helped decision makers, brand owners and brand agencies define, articulate and elevate the value of their brands. He brings a refreshingly New World perspective to issues around compelling brands, competitive value, purposeful cultures, market leadership and responsible ideas. Follow him at @markdisomma

We’re committed to a series of posts on this subject. Look for them over the next few weeks. Your feedback, comments and input is appreciated.

Are You Ready for the Next Era of Competitiveness?


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Kodak vs camera phones. Blockbuster vs NetFlix. Barnes & Noble vs Amazon. Any newly-minted MBA graduate can reel off a list of organizations felled by a competitor that came out of nowhere and brought the organization crashing to their knees.

The reasons – and the excuses and post-rationalizations – are equally legendary.

Organizational rigidity. Poor situational awareness. Cultural arrogance. Bricks in a world increasingly driven by clicks.

While all those reasons are incredibly valid, one increasing reality to me is that categories have become increasingly porous.

WTH are Porous Categories?

For much of business history companies could easily point out their competitors and where their next competitive threat might come from. Theodore Levitt’s classic missive “What business are you in?” established the most basic way for business leaders to evaluate their operations and determine sources of competition.

Steadfast and much-researched principles like core competencies, barriers to entry, market access made that evaluation easier. After all, it takes effort to build a factory, create a supply chain, negotiate with union employees and large retailers to make – and stock – your products, and it takes as much experience to wring every last drop of efficiency outta those operations.

However, I’d also argue that the supposed “security” of those principles made many organizations complacent.

Today the security of those principles is in real jeopardy.

Obviously the internet has been the single largest contributor to that transformation. Beyond just the ability to enter and upset categories, it’s also created a new aptitude and attitude for business leaders to enter new categories.

It’s that combination of ability, aptitude and attitude that gives rise to porous categories.

Case in point…

Last month the world has shuddered under the massive marketing and PR tsunami that is an Apple product release. It did not disappoint. If there’s one thing the folks at Apple know its how to do pageantry like no others. There were celebrities, there were ohhhhs and aahhhhs, there were bright shiny, lickable new gadgets, there was even free music from U2. Ok, so that last point wasn’t quite as well-received as the other stuff.

The one item getting traction is the release of Apple Pay. Apple Pay, the much-anticipated foray into NFC and the release that could (will?) make the digital wallet a genuine reality.

Apple-pay-wallet

 

What’s profound about Apple Pay – and so many of Apple’s innovations over the past few years – is that its poised to disintermediate the historically unassailable credit card industry by acting as the payment “gate-keeper” to the entire iOS ecosystem. By sitting “in front” of the consumers credit card details on the phone, it has the potential to set which products, which cards and which brands can sell to its legion of Apple users. And if there’s one thing we all know about Apple users, they’re slavishly loyal and typically well-off financially.

Whether Apple Pay will do for (or to) the credit card and mobile payment category what iTunes did to the music industry is for others way more technologically savvy and clairvoyant than me.

What’s been interesting to watch is the reaction from “competitors” terrified by the sea-change that Apple Pay portends.

Sensing the momentum quickly moving away from them, large US Retailers, who’ve been slow to explore this sector, are quickly adopting Apple Pay or accelerating their own foray into the space. After years of postulating the intersection of Retail & Mobile, we may finally be there.

It’s one thing to accept that porous categories are a reality. That, as a business leader, you genuinely have to consider a world where competition can and will come from literally anywhere.

But, what to do about it?

Some advice is pretty obvious and, if you’re not already doing this, you bluntly don’t deserve to be in business.

  • Read, re-read, print and sleep with this classic Michael Porter article under your pillow.
  • Raise your situational awareness – and make it someone’s total job to evaluate your direct, near and in-direct competitors more frequently than your annual business planning meetings.
  • Raise your comfort level with testing and failing – Innovation is such a topical buzzword but many companies still seem reticent to try something new unless they can guarantee 100% success every time. That’s both unrealistic and blinkered. Failing, particularly failing where you learn something profound about your organization’s shortcomings, can be the most enlightening action you can take.

 

And here are a few other options that might reduce your exposure to competition.

  • Build a deep and broad competency in Change Management. As a recently minted PROSCI graduate its not surprising I’ve drunk the Change Management Kool-Aid. The point being is that, in a market buffeted by change, so few organizations have any internal competency in this critical area or it is often the responsibility of a single department. Change Management acuity should sit in all areas of your business because that raises the likelihood you can achieve point #2.
  • (Comfort with) Change should be a Cultural phenomenon internally. The cases cited earlier typically point to an inability of those organizations to culturally adapt. In hindsight that’s likely very true. Just like you currently obsess about being customer-centric and building a culture to deliver it, you should equally obsess about creating systems that motivate and celebrate change. If you’re not sending signals to your employees that change is inevitable and welcomed, you’re not building the internal agility to meet that inevitable change.
  • Obsess on your Vulnerabilities. In an earlier post I talked at length about the predilection of organizations to fixate on strengths and core competencies. Why not, we all like talking about those. Truth being, competition comes from your Achilles Heel. From exploiting the areas where you’re weak. Do you feel exposed by the answers to these questions…Can we democratize our customers more? Can we give them more, not less, choice? What will cloud-based services do to our business? Should you be concerned about the Uber-fication of your category – here’s a bunch of categories already changing because of Uber. Strengths are great to talk about to analysts and at the Xmas party but its your vulnerabilities that will fell you.
  • Re-examine your Purpose. Yes, Dear Reader, I’m dropping the “P” word on you too. Purpose has become the clarion call for many enlightened organizations. Sadly for many less-enlightened ones, its still just words on a wall or in an annual report. Simplistically if you believe your Purpose is merely short-hand for the one-dimensional functional delivery of your products, you’re missing a trick. Purpose, as companies such as Patagonia, Jet Blue, Chipotle have shown, can be a competitive advantage. While it may not save those companies from having new entrants enter their respective categories, it does make them less vulnerable to customer defections. And that’s certainly critical.

 

Dear Reader, I can guarantee you one thing – categories are going to become more porous. The internet’s ubiquity – and the realization of “The Internet of Things” – makes that inevitable. You can metaphorically play the game of the Dutch boy and the dyke, or you can take a more aggressive posture by focusing on the areas of Change, Vulnerability and Purpose outlined above.

Bon chance.

Tackle Your Brand Vulnerability – or Be Prepared to Lose

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When former US-President Bill Clinton proclaims that the three largest global soda manufacturers have declared their intent to reduce sugary calories by 1/5 within a decade, you can be assured of two things. One, it’s a pretty damn important message. Two, every media outlet imaginable is going to carry your message in their next news cycle.

Skeptics might argue that, for these oft maligned and outed soda manufacturers, the second reason might actually pip the first.

After a decade of fighting public relation battles that stretched from Mayor Michael Bloomberg’s attack on serving sizes in New York to numerous references in medical journals about the contribution of high-calorie sodas to teen obesity, there’s definitely a chorus of folks remarking “about friggin time guys”

To give credit though, reducing sugary calories by 20% is a great step forward – Jim Collin’s might even label it a Big Hairy Audacious Goal (BHAG) – but this spectre has haunted the category for a while. Worse, their historic responses – typically splashy marketing and advertising efforts - have been so saccharine and self-serving as to make no impression whatsoever. In fact, many of those earlier efforts were so poorly received that they were quickly quashed.

Two things strike me about this news.

1 – Why, after decades of declining sales in their principal markets and in their principal product lines, did this initiative take them so long to launch?

2 – Why is it that so many mature categories seem so unwilling to tackle well-documented, broadly understood vulnerabilities in their value proposition?

I’m not so ignorant as to presume that a single memo or a strongly-worded email from the CEO would turn around the behemoths that are Pepsi-Cola, Coca-Cola and Doctor Pepper. When Interbrand values you at $17.8billion (Pepsi) or $79.2 billion (Coca-Cola) these are deeply integrated organizations that have spent decades chasing Michael Porter’s “core competencies” in manufacturing, distribution, new product development, sales and marketing. You don’t unravel that Gordian knot overnight.

But when you’ve invested countless dollars creating – and supporting with marketing dollars - a product portfolio of over 400 product flankers, bought new verticals to capture juice, water or energy variants and folks are still leaving in droves, it must beg the question “perhaps there’s something else we need to be addressing?”

frustrated-by-automated-phone-system1But they’re not the only culprits.

Cable companies that advertise a slew of new content blockbusters yet seem unable to send a technician to my house at the time they scheduled.

Telco companies that offer a bewildering array of snazzy new phones and data plans yet take 45 minutes and several rounds of escalation to answer a simple question about my monthly bill.

Hotel companies with incredible mobile tools and services allowing me to rate, review and check-in to my $450-a-day room from anywhere yet also seem to think that charging me an additional $30 a day for wifi is somehow appropriate.

Software companies launching fantastic new features with every release though, sadly, those same releases seem to be bloated and buggy until release 3.0

There was certainly a time that building a business and brand by launching new products or adding new features was the fastest way to market success but, particularly in mature categories, that traditional approach seems closer to the law of diminishing returns than the greenfield opportunity of old.

What’s a marketing leader in a mature category to do?

Well one answer might lie in an unusual and unlikely source for mature categories – the fantastic work by Adam Morgan, the father of “Challenger” brand 51uK-n3zEkLthinking.

Amongst his 8 Credos of a Challenger brand, Adam sets out the notion of “Symbols of Re-Appraisal” which essentially asks brands to think deeply about what actions they can take to make consumers profoundly think differently about them. What would it take to make consumers stop and think “Wow, I’d never have believed category X or brand Y was capable of that” In Challenger brand folklore, when ING Direct decided to offer customers a banking experience without bricks&mortar branches, that was a profound “Symbol of Re-Evaluation” which lead to a redefinition of what consumers expected of the category.

It means taking on the sacred cows – or obscenely overgrown pink elephants – of the category. Or within your organization.

And, most importantly, its now the category champions, not just the historical Challengers that are doing this.

McDonalds stepped up admirably with their “Our Food, Your Questions”. Heaven knows, the QSR category – of which McDees is the de-facto big dog – has a very tattered and blemished record, particularly in the mature markets of the US, Canada, the UK and Australia. But by tackling their toughest critics head-on, versus dodging them, McDonalds was able to claw back some credibility – and create a Symbol of Re-Evaluation.

The brutal reality for all marketers is that building brands entirely on what we perceive as strengths is no longer enough. Our brand weaknesses, or vulnerabilities, are just as likely to sink our sales aspirations as our brand strengths are to drive them.

Well-informed consumers are just too socially-connected, too societally-aware, too financially-empowered and too able to find and purchase alternatives for us to think that not addressing our vulnerabilities is sustainable.

To paraphrase that terrible dream of King Nebuchadnezzar, perhaps its time for all brand leaders to consider if they’ve built a giant with feet of clay. Because, it may just be those clay feet – or Achilles Heels – that will topple your business.

How Winning Brands balance Purpose and Profit

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There are those who continue to frame the role of business in purely commercial terms. Business is hard enough, and the demands of shareholders and the markets so insistent, these people say, that companies need to avoid the ‘distractions’ of infusing a moral platform into what they do. They should just get on with making profits. That’s their purpose. After all that’s what shareholders demand and that’s typically what they’re compensated on.

And in that one word, purpose, and its ambiguities, lie the seeds of an increasingly vigorous debate that, to our minds, stems from a confusion of ideas (and priorities).

When you adopt a functional definition of purpose, this is pretty much where most of us land: The purpose of business is to make money. True. Single-minded. And responsible – in the sense that without money, there are no resources to keep people in jobs and to contribute to the economy and the markets.

If however you take an intentional definition of purpose this idea extends one stage further: the purpose of a business is to make money and to do good in the world; or even the purpose of a business is to make money by doing good in the world. Also true, for those of us who believe that there is more to business, and life, than just money. Less single-minded, because there is a linked agenda. Also responsible – but to different things, in the sense that money is a means as well as a resource.

Purpose when it is defined as a function revolves around the immediate and commercial reason for being.

The focus tends to skew towards results. In the right hands, this concentration on outcomes energises and drives the business priorities and strategies inside an organisation. Coke became the biggest beverage company in the world because it set its sights on putting a glass of Coke within arm’s reach of every thirsty person on the planet. The pursuit of that result is reflected in its supply chain policies, in its product development, in its distribution and pricing strategies. When it goes too far though, the pure-play pursuit of results (and their attendant incentives) drives an organisation to pursue agendas that are so outcome-focused they can lack humanity and even responsibility. The actions of Enron and GM are cases in point. Both organisations pursued results at the expense of other considerations.

Purpose when it is defined as an intention reflects a more global bias.

It frames what the people inside an organisation, and the customers who buy from them, would like to see change (for the better) in the world. In this context, the focus is on shared beliefs and on a shared view of the world that is much more long term. In the right hands, this focus on what’s desirable and altruistically aspirational holds an organization on a steady morally-focused course. It puts some ideas in-purpose and renders others unacceptable because they do not contribute to the intentional purpose (even if they do contribute to the functional purpose). As I pointed out in a recent post , a strong and clear purpose drives collective comprehension, cohesion and forms the basis for fundamental business choices. It focuses on an agreed worldview that provides people inside an organisation with powerful incentives to come to work and gives consumers reasons to stay loyal to a brand. When it goes too far though, the pursuit of an ideal leads to inefficiencies, lack of operational strategies and the adoption of an aggressive and self-righteous moral high ground that subsumes everything in its path and brooks no dissent or even debate.

Ergo, pursued to extreme either reading of purpose, functional or intentional, is detrimental.

Interestingly the ‘grandfather of consultancy’ Peter Drucker held a perspective more in line with the latter view.peterdrucker3

He once famously said, “Business has one task – to create a customer”. In Drucker’s world profit was a consequence, not an objective. If an organization successfully “created a customer” – through superb products built on sound insight, artful distribution and an alignment of the views of the organization with the views of the customer – then profits and success were inevitable.

This needn’t be an “either/or” decision though..

Pursued in a balanced manner, the two agendas hold each other in check. They provide the business with a mandate to chase its commercial goals at the same time as they lay down clear guidelines within which that pursuit must take place.

So what might that mean in a real, practical example?

The challenge for Coca-Cola today is not whether it should make money or tackle obesity but how it can continue to keep everyone happy by making responsible returns, persuading people to consume less calories through its products and using natural resources like water in sustainable ways.

If Coke’s purpose is ‘Moments of happiness’, then a balanced pursuit of that means finding ways to achieve moments of happiness for all and not at the expense of some. And to do that, Coke’s leadership probably need to be asking themselves at least eight ongoing questions:

  1. How do we define a moment? (is it solitary or social?)
  2. How much is a moment? (is it a gulp, a can or a 2-litre bottle?)
  3. What’s a moment worth? (if there were less moments, for example, could they be worth more? How?)
  4. How is happiness changing across the world? (specific, regional and global trends)
  5. Who must be happy in order for us to achieve our purpose? (how do we judge success and is that how our consumers judge success?)
  6. What makes people happy now and what will make them happy in the future? (How might we evolve what/when/where to ensure we’re appropriate for them?)
  7. Where do the pursuits of happiness fight with each other and how do we resolve them?
  8. Must a moment always include consumption of our products or could/should we enable other moments?

They’re not easy questions – particularly when you’re as global as Coca-Cola and your organization is a patchwork of owners, distributors, bottlers, franchises and partners like McDonald’s. Aligning those entities is another key component because consumers don’t delineate Coke from a vending machine and a Coke poured at the Golden Arches. We’ll deal with that conundrum in a future post.

But they are the questions that leaders need to be asking in our view in order to truly deliver the two sides of purpose.

For purpose to work to its full potential in organisations, the commercial leadership must be balanced by a clear and shared moral leadership.

Today’s leaders need to be comfortable embracing both sides, not merely the commercial one.

Mark Di SommaThis post was co-authored with friend, brand zealot and cranium tickler Mark Di Somma. New-Zealand-based he’s a creative strategist, keynote speaker and writer for Branding Strategy Insider. For more than 20 years Mark has helped decision makers, brand owners and brand agencies define, articulate and elevate the value of their brands. He brings a refreshingly New World perspective to issues around compelling brands, competitive value, purposeful cultures, market leadership and responsible ideas. Follow him at @markdisomma

We’re committed to a series of posts on this subject. Look for them over the next few weeks. Your feedback, comments and input is appreciated.

Business Leaders, How Self-Aware Are You?

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In hindsight I should’ve anticipated there’d be a backlash.

You can’t put “Provocateur” into your LinkedIn title without expecting some provocation to come back at ya. Some debate. Some discussion. Some disagreement. That’s just karma.

Titling a recent post “Without Purpose Your Organization is Rudderless” wasn’t just an attempt to score highly in nautical search results. Its something I feel deeply.

But what makes it particularly personal is that I’ve experienced first-hand the difference between organizations who have a clearly-defined, well-articulated and well-understood Purpose – and those that don’t.

So what’s there to debate?

Well actually, it would seem there’s a fair bit.

Two friends that I admire deeply took me to task on my interpretation of Purpose.

Must Purpose always be Good?

It’s easy to point to Zappos, Patagonia, IBM and Red Bull and all the storied examples and wax lyrically about Purpose. But does that mean that other successful companies lack Purpose – or is it that we’d rather not discuss what their Purpose is?

Monsanto

Enron – which I had personal experience working with.

GoldmanSachs

BP – the actions that preceded Deep Horizon” might suggest their real Purpose isn’t driven by an abiding love of the environment.

GM – the ongoing US litigation scandal and how whistle-blowers were considered internally might suggest another, darker Purpose at play.

And what about the much-loved, admired and emulated Coca-Cola Company.

For several years they battled an embittered backlash in India over depleting the water tables. More interesting was this recent article in BusinessWeek detailing how the organization is attempting to regain #1 share for their signature red can.

Buried within the article “Coke Confronts Its Big Fat Problem”  is a candid account of how a zeal to push sales volume in the US lead to the much-maligned phrase “Super Size”, gave rise to ridiculously outsized portions and, likely contributed, to the associations of soda with childhood obesity and so on.

You might argue those actions were representative of an earlier “Purpose” but you can’t deny they fly in the face of an organization that purports to exist to create moments of happiness.

Begs the question…Happiness for whom?

Purpose must benefit customers and society

Ironically in the same BusinessWeek as the Coke article above, was another that highlighted the lengths that Purpose-driven organizations are supposed to go in defense of their Values and Ideals.

Ben & Jerry’s is in the midst of a disagreement with parent company Unilever over moves to mandate GMO labeling of foodstuffs. Ben & Jerry’s position is that customers deserve to know exactly what’s in the food they eat. Unilever is concerned that the provisions are ambiguous, impossible to enforce and will add substantial cost and inefficiency to their supply chain and production.  Unilever, to their credit, are giving Ben & Jerry’s autonomy in this decision.

Both are acting within their Purpose but which organization is getting kudos and which is being lambasted?

As more and more evidence accumulates that consumers want – nay, expect – organizations to be transparent, societally-aware, environmentally-neutral, positive contributors to the world, what is any ambitious CEO to do?

JanusLet’s Start Here - Leaders Must Be Self-Aware

For the record, neither friend was advocating a Purpose of pillaging and scorched earth. Far from it. In fact both violently agreed that any Purpose has to be built from an organization that is ruthlessly self-aware.

If your sole purpose is to create an organization for acquisition, don’t talk about longevity and legacy.  Your actions are going to belie that Purpose.

If you’re not prepared to stamp out bureaucratic processes that impede customer satisfaction, then you can’t state your Purpose is customer-centricity. Your behaviours run counter to that Purpose.

Ultimately, your Purpose is just that. Yours. You have the responsibility to fashion it in a way that echoes your views and your ideals. Just accept that they may not be one’s that we share.

But if Purpose is intended to drive all decisions you make, just be self-aware enough to be honest about what that Purpose really is.

Because, if you aren’t, then I can almost guarantee Joe Public and Joe Employee will quickly discern the difference between your espoused and your real purpose

And, as the examples above highlight, your reputation and performance will inevitably suffer.

Without Purpose, Your Organization is Rudderless

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Thank god for Hollywood and the characters, icons, metaphors and phrases it’s created.

When I tell my clients “Help me, help you. Help ME, Help YOU” they immediately picture Tom Cruise and Jerry McGuire. Sometimes I’m even on my knees imploring them like the scene in the movie just so they get the connection. Sometimes.

But there is another classic I see often in my consultancy work. Often said with the same gravitas as James Earl Jones summons in “Field of Dreams”

“If you build it, they will come”

“If. You. Build. It, They WILL come”

I think we all realize just how empty and dangerously naïve that phrase is in today’s market.

How many websites are never visited? How many applications are never downloaded by anyone other than the family of the developers? How many products go from lauded to landfill without making the barest dent in the lives of consumers?

Within the microcosm of social media there are pages filled to the brim with “conversations” that feel more like desperate cries for attention. In classically deft fashion, Kiwi blogger Mark Di Somma recently highlighted just how misguided some brands actions are in the social space. I think he’s on to something when he suggests that “Consumers and brands have been talking past each other socially”

For my money, many of these failed efforts happen because organizations are looking for love in all the wrong places.

Rather than looking deep within themselves – to their Purpose – they try desperately to ride a trend or co-opt something current and en vogue so as to appear fashionable.

In my book, that’s a guaranteed fail.

My admiration for Challenger brands stems from a discipline – and devotion – to their Purpose that isn’t swayed by fashion, trend or whim. They remain focused on the reason their founders began the company to start with.

Red Bull’s focus on “energizing the world” means there’s no incongruity when they hold air races in crowded downtown areas, take free-running from an underground niche past-time into the mainstream or throw a man from outer space in real-time. Or when they open their own travelling music academy to nurture fresh new talent, no-body says “That’s not Red Bull”. More often, the reaction is “Of course. Who else but Red Bull could do that?”

Conversely, a friend recently relayed a story to me that is sadly too familiar. Brought in to create some video assets for a very successful company, she asked the founders “why did you start this company and what makes it special?” They didn’t have an answer to either question. The founders! These are the guys that started the company? Their hope was that she – an outsider – would be able to create this magic with her video camera. Talk about putting lipstick on a pig.

So how is it that stories like the one above are so prevalent?

Well, what I often hear is that getting to a company’s Purpose is incredibly hard. And is all that hard work really going to make a significant impact on their top or bottom-line?

Let me ask if these outcomes aren’t worth the effort.

A more enlightened work-force. One of the central benefits of a well-articulated and well-understood Purpose is that employees know exactly who they work for and what they’re trying to achieve in their daily efforts.

Purpose drives comprehension.

A stronger corporate culture. A Purpose that acts as an aspiration and “true north” for the organization becomes the bedrock of stronger corporate cultures. Ask organizations like Zappos and The Four Seasons about how their Purpose informs their much-admired cultures.

Purpose drives cohesion.

A filtering mechanism for decisions. I’ve been fortunate enough to see organizations use their Purpose to guide decisions as varied as the market sectors they’d enter – or not, the partner and franchisees they’d partner with – or not, and even the types of employees they consider hiring or promoting.

Purpose drives fundamental business choices.   

So, for those companies unwilling to invest in defining their Purpose, is not doing the work worth the risk?

Do you think you can still launch new products, attract new investment, stimulate and galvanize your workforce without it?

Is that something you’re prepared to bet the farm on?

Hands Up. Who Wants to Be An Innovator?

Back when I started my career (or when dinosaurs ruled the earth) there was a very different perspective of innovation and innovators.

They were an elite group of secret, almost mythical, creatures toiling away in labs far from the prying eyes of competitors or even colleagues without a C-suite designation. As a lowly advertising guy, you never saw these folks until your client was prepared to unveil the fruits of “Project Thunderstruck”. Another sign o’ the times – innovation projects weren’t funded unless they had some kinda quasi-military-superhero name.

That’s all changed.

Today every corporate press release, LinkedIn profile and company blog isn’t complete without innovation, innovative, innovator in every second sentence.

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The perceived norm for innovation has moved from top-secret skunkworks to open and crowd-sourced, from the company-knows-best model to a consumer-collaborative one. Today all your employees are expected to be innovation engines and storied organizations like NASA actually want us, the general public, to weigh-in on their projects.

However does all this innovation talk really reflect a true sense of the market? Has innovation, like other popular phrases such as creativity and follow your passion, really seeped into the bloodstream of organizations.

Might I suggest these questions could help determine your real appetite for innovation;

Do you have a well-understood definition and expectation for innovation?

Innovation, like Strategy, is an amorphously-defined word by many executives. Are you looking for “big I” Innovation that will redefine your business and category or “little I” innovation where you’re polishing and refining processes, products and services incrementally? Simplistic as it may seem, if there isn’t a universally-understood definition of what innovation in your company, category means, how can you expect your people to know what’s innovative or not…and then act accordingly?

Do you have a culture that’s conducive to innovations and innovators?

I’m not talking the trappings of innovative or creative workplaces like beanbags, open concept offices and bring-your-dog-to-work-Fridays but a real cultural environment to foster innovation. Are your employees encouraged to tinker, play, build, question? Is that tinkering, playing, building deliberate, unexpected or unstructured? Do you have a process or framework that purposefully moves innovation from ideation to development and deployment? If you’re really committed to this innovation thang, it requires deliberation and purpose. Innovation happenstance makes for great scenes in a movie, not in the workplace.

Do you consider innovation your best opportunity for growth?

Many folks (way smarter than me) working in innovation consultancies tell me that many executives pay lip-service to innovation because they’re still obsessed with maximizing efficiencies and reducing operating costs. And when those have been maximized, going out and buying another company as the engine for future growth. These are important, even necessary, pursuits but they really only make your current organization more efficient – they don’t catalyze your organization to be more effective. If you genuinely buy into the potential of innovation you’re looking for ways to put jet fuel in the engine of your organization, not ways to make the windscreen and hubcaps shinier.

Are you actively and broadly sweeping for innovation impacting your business?

We’ve all read about Kodak, with an employee base of over a hundred thousand, being disrupted by Instagram with less than twenty employees. A spectacular story and a genuine cautionary tale but the story has a direct correlation to your commitment to innovation too. If you’re genuinely committed to innovation you’re deliberately and diligently seeking out innovative examples to watch, mimic or outright copy. If you’re not, I can guarantee your competition is. The flip of innovation as a growth engine is innovation as an engine for your demise.

Do you accept that innovation will disrupt your organization?

Innovation is scary. It means doing new things, with new people, new frameworks, all for the first time. Its also not 100% guaranteed to succeed. That’s enough to test the mettle of the bravest CEO. All sturm und drang aside, consultancies like IDEO, Stage Leap and Canadian firm Idea Couture have well-defined processes and experience traversing clients through those bumpy waters. But, trust me, it will be choppy and disruptive. If the thought of that disruption causes a sinking feeling in the pit of your stomach, I’d suggest you’re not really ready.Px41antidote

Have you set aside budget and accountability for innovation in your company?

Such a fundamental point, perhaps I should’ve started here. You’re not really into innovation unless you have genuinely set aside real budgets and accountability for it. And not innovation as an intellectual “what if” exercise but as a demonstrable contributor to the company. Is there P&L attached to your innovation or have you merely added the word “innovation” to someone’s existing job description? If there’s no skin in the game or someone’s feet aren’t to the fire to deliver, then , mixed metaphors aside, innovation is a pet project, or worse a distraction, to your business.

As this wonderful article in The Atlantic suggests, innovation has a complicated, sometimes bloody history. However as the word – and all the accompanying descriptors – become more widely used, I think it is critical that each organization puts a stake in the ground.

Is innovation a real imperative for your company or merely the latest Bright Shiny Object?

I’d love your thoughts and feedback. Are there other determinants of companies truly committed to innovation. Sound off folks.

Brand Purpose and the Ethics of Marketing

I’m responsible for the global financial meltdown of 2001.

Phew. Feels good to finally get that off my chest.

In all seriousness though, I did have a very tiny ringside seat into that debacle in 2000. While working at Ogilvy&Mather I was sent to the New York office to run the Enron account. A few months later I was back in Toronto. Here’s a reminder, if you really need one, of that story

The Enron legacy was gallons of journalist ink on corporate malfeasance, a brief rise in post-graduate courses in ethics and the signing of everyone’s favourite piece of business legislation Sarbannes-Oxley.

Problem solved right?

Sadly it would appear not.

GM-BOARD-BUILDINGWhile a lot has changed in the thirteen years since Enron and WorldCom, the debate about business ethics appears to be back on center stage with some interesting debates happening in the United States.

On the east coast, automotive giant General Motors faces a very damning court case over criminal negligence that lead to the deaths of 13 people. There is increasing evidence that GM knew they had a defective part which could cause fatal accidents but they, fearing a massive recall and huge legal fees, chose to deliberately conceal that knowledge from outsiders. In a story more reminiscent of John Grisham, US courts are attempting to unravel who knew what and when did they know it, who deliberately conspired to hide this information and what course of action can be taken to give justice to the bereaved families.

In almost the polar opposite scenario, an intriguing situation is raging around Silicon Valley darling Mozilla and the resignation of their CEO Brendan Eich. Eich was ousted for a personal contribution he made to California’s contentious Proposition 8, a bill which attempted to define marriage status as something between a man and a woman only. Many in the civil and gay rights movements saw Proposition 8 as reprehensible and demeaning and that made Eich’s personal support of it questionable. An intense and quite public debate ensued amongst Mozilla staff questioning Eich’s moral judgement. Following that “debate” he chose to resign. Many saw this as a victory for business ethics and congratulated Mozilla’s employees on their fortitude.

Two very different cases with business ethics at their core.

Two very interesting debates about how ethical businesses should run and should act.

So what is today’s ethical framework?

In my strategy work I come across a vast number of company’s that hold up “Doing The Right Thing” as their ethical filter. That’s a noble filter.

And, in truth, there’s nothing inherently wrong with that sentiment – and the company’s and clients that I work with are all very well intentioned – but the struggle is defining right by whom.

Your customers?

Your partners and vendors?

Your stakeholders?

Society in general?

YOUR corner of society in particular?

It’s complicated, right??

Several months ago I wrote a blog post about the tragic garment factory fire in Bangladesh and the difficulty of determining the appropriate corporate response. Reparations to the affected families in the short-term was obvious. But what about the long-term strategy?

Is the ethical decision to leave the country, set up your supply chain in a better-regulated country where your operational costs are likely going to increase – and those costs are either going to be absorbed (“Hell no” being the chorus from your shareholders) or passed on to your customers (“Are you frigging kidding me” being their likely response). What about the lost income and livelihood of all those, mostly female, workers? What’s your ethical responsibility to them, their families or their efforts to earn more gender equality in their country?

For others there is no ethical ambiguity.

For all the vilification WalMart elicits in certain places, there is little doubt about who they’ve determined as the group they’re most concerned by. The group that they’ll do “right by” All their efforts are intended to drive the lowest possible cost for their customers. If that means incredibly tough negotiations with their suppliers and partners, so be it. If it means breaking the backs of their labour groups and creating unlivable wages, then they’re going to do it. If it means foregoing opening stores in certain geographies, then they’ll do it.

How do you determine what’s right?

We all know there is no “right” in the decision made by GM.swearing-on-bible-jpg

In a legal sense I’m sure we’ll see countless lawyers argue the finer points of phrases like “criminal”, “negligent”, “willful” and “culpable”…but that wont change a thing. There is no ethical dilemma about what to do about a faulty product that has already killed people.

So how do others handle it?

These three Canadian examples might help.

McDonalds Canada chose transparency as their ethical route. Faced with consumer backlash, an internet filled with half-truths, myths and lies, McD’s chose to confront the problem head-on. By actively soliciting consumer questions – no matter how blunt and direct – and filming responses to those questions, they were able to highlight their commitment to openness and transparency.

BCHydro chooses education as their ethical yardstick. Their Power Smart initiative is based entirely on getting consumers to actively use less of their product and think long-term about conservation. Let me reiterate – they have an educational program teaching folks to use their product less. Its almost counter-intuitive in a province where hydro-electric power is plentiful and operating costs are relatively low. Its also a far-cry from the organization’s past where they – like so many companys today – were encouraging consumers to spend, spend, spend. Its quite a remarkable example.

Property developers Minto Group uses corporate heritage as their yardstick for making principled decisions. Long before sustainability, green and eco-friendly became watch-words in the development community, Minto had established a robust and dedicated department focused entirely on sustainability initiatives. The impressive part of this commitment is that it started before consumers were actually willing to pay for energy-efficient homes. Minto could’ve chosen to build less-efficient homes that consumers were willing to pay for, but they chose not to. Instead they forged ahead and built some of the highest-rated sustainability properties possible.

It’s all about your brand purpose

Yes Regular Reader, you knew my opinion would come back to this.

Your brand purpose is the strictest filter of any behavior within your organization. As your brand’s true North, there should be no dilemma that can’t be resolved by looking at your brand purpose for guidance.

And while you may still find issue with Mozilla for trampling on the personal opinions of Brendan Eich, there’s no denying the organization – and Eich himself – was acting in a way entirely consistent with their brand purpose. As an organization famous for collaboration, openness and universal access, calling out their CEO was entirely brand consistent. This internal blog post from Mozilla actually reinforces how the company’s brand purpose became the final arbiter for Eich’s decision to resign.

467400-bangladesh-building-collapseBuckle up, its only gonna get bumpier

As consumers become more connected, better informed and more aware of their rights, I fully expect that these ethical dramas will only increase in frequency – and in volume of customer outrage.

Company’s unable to act ethically will find themselves tried in the court of public opinion. And it will be those ethical trials that confirm whether a brand has purpose, and if that purpose has genuine customer appeal.

Sigh, if only Sarbannes-Oxley could make this all go away.

Still believe marketers aren’t the ethical voice of an organization? Still believe that your brand purpose shouldn’t act as your ethical filter?

As always when I write a post on a subject I have little formal background on – in this case ethics – I’m always appreciative of feedback and comments from my readers. What say you on this subject? I’m fascinated to hear your perspective.

20 Signs That You Might Be A Redneck Marketer

Insomnia can be a real killer.

Rather than tossing and turning in bed incurring the wrath of my wife, it means late nights watching infomercials and re-runs on the TV. Counter to popular belief, it seldom means inspiration and creative breakthroughs.

But then there’s the rare occasion when planets align…

2am the other night I stumbled upon the incomparable Jeff Foxworthy and his brilliant comedy show “You Might Be a Redneck…”

redneck_park12xFor readers from outside North America, rednecks are an archetype for a certain group from the southern USA. As the stereotype goes according to the good folks at Urban Dictionary, they are incredibly conservative, stubbornly hold on to antiquated views, resist change and have a love of NASCAR and beer.  In the hands of Jeff Foxworthy, this group provides comedic gold.

That got me wondering if there was such a thing as a Marketing Redneck. Marketers similarly resistant to change. Holding on to antiquated views and incredibly stubborn.

Taking a page from Jeff, I compiled the following list. To remain true to the experience, please finish every sentence with “….you may be a Marketing Redneck”

1.     “If someone asks about your brand and you start describing your logo, font and tagline…”
 
2.     “If you think that customers have no role in helping create new products and services for your company…”
 
3.     “If you hear the word “digital” and immediately think “social media”….”
 
4.     “If you think social media is another fantastic place for free advertising…”
 
5.     “If you think your competitors are only those companies in your immediate category…”
 
6.     “If you consider that your Marketing role should only deal with advertising and communications…”
 
7.     “If you believe that its more efficient to use the same experience for your website on both desktop and mobile…”
 
8.     “If you consider that the best way to improve your company is to focus solely on cost reductions and avoid innovation…”

9.     “If you think that when your advertising is tanking, your most important task is to call an agency review…”
 
10. “If you believe that Marketing, Sales and Service are the only employees that impact perceptions of your brand….”
 
11.  “If you’ve accepted that Sales and Marketing can never work effectively together because they’re just so different…”
 
12.  “If you consider social responsibility initiatives to be some ancillary “nice to do” side project…”
 
13.  “If you still think that consumers follow a linear progression from awareness to consideration to purchase…”
 
14.  “If you use a funnel to describe the way customers act in your category…”
 
15.  “If your marketing strategy could be best described “doing what the largest company is doing just with less money”….”
 
16.  “If you believe the best way to attract new customers is to reduce your prices versus improve your brand…”
 
17.  “If you believe the best way to retain customers is tie them up in complicated contracts or convoluted loyalty programs…”
 
18.  “If you can’t understand why average people don’t care enough about your salad dressing/motor oil/depilatory cream to follow you on Twitter…”
 
19.  “If you swear by focus groups as the best way to validate any marketing decision…”
 
20.  “If you consider the only indication of a strong brand is its performance on the stock market…”

I have a sneaky suspicion I’ve only scratched the surface here. We are living through some extraordinary times. Times of turmoil, conflict and real ambiguity. I’d suggest that the way we’ve always done things isn’t going to get us through.

Perhaps a place to start is to stop being a Redneck Marketer?

Weigh-in folks, I’m sure there are some ‘Redneck Marketing” examples you’re just dying to share.

It would be crass of me to not thank Jeff Foxworthy for this inspiration for this post. Thanks man. You Sir, are a comedic genius.