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Why Purpose-Driven Companies Are So Successful (And You Can Be, Too)

A 2019 report by EY neatly encapsulates the definition and value of purpose driven companies. It initially defines purpose as “an aspirational reason for being that is grounded in humanity and inspires a call to action,” then creates a more practical definition for business: “an aspirational reason for a business that is grounded in humanity and inspires a call to action.”

EY goes on to say “a purpose-driven organization/ company is therefore one that endeavors to show its stakeholders (consumers/clients and employees) that it takes purpose seriously by actively demonstrating all measures that it’s put in place to achieve this milestone.”

Why is Purpose So Compelling to Stakeholders?

Peter Fisk states that “Purpose-driven companies are more ambitious, they attract the best talent, inspire richer innovation, make faster decisions, are more trusted, have greater loyalty, and attract more investment.” The afore mentioned EY survey reveals that a steadily rising number of organizations are successfully driving purpose into their businesses. What leads to their success?

Per EY, there are three key factors:

  • Purpose is a core differentiator. Purpose-oriented companies have higher productivity and growth rates, along with a more satisfied workforce who remain loyal and stay longer with them. Such companies also go on to report 30 percent higher levels of innovation and 40 percent higher levels of workforce retention than their competitors. While traditional trends might dominate purchasing behavior, new opportunities exist to connect with customers through purpose.

    In 2019, our consumer survey showed that price and quality remain the biggest factors driving customer decisions. However, many of the same respondents (55 percent) believe businesses today have a greater responsibility to act on issues related to their purpose. Those failing to do so risk being displaced by purpose-driven disruptors. For example, Unilever’s 28 “sustainable living” brands (i.e., brands focused on reducing Unilever’s environmental footprint and increasing social impact) such as Dove, Vaseline, and Lipton delivered 75 percent of the company’s growth and grew 69 percent faster on average than the rest of its businesses in 2018 (compared to 46 percent in 2017). Soap, petroleum jelly, and tea are everyday household essentials, but by promoting sustainable living, these products became differentiated as they embody the company’s purpose.
  • Purpose means something to all people. Purpose-driven businesses factor in the experiences of all the people they touch, as people want to work for and support a company whose purpose is focused on impacting the society positively. People look to work with brands that mirror their values and ultimately make them feel like they contributed in making the world a better place.

    Companies that cultivate an authentic relationship with all their stakeholders can create meaningful connections with them, building loyalty in them along the way. This is especially very important to the current crop of young people who seek more purpose from everything around them as compared to their predecessors. For instance, 53 percent of South African millennials suggest they’ve changed their relationship with a business because of the impact its products or services or brand has on the environment or society.
  • Purpose is who they are. Purpose-driven businesses truly embed purpose in each of their activities with the sole aim of enabling a lasting positive impact on people’s lives. Customers are also looking to indulge in products or services of companies that help them achieve their goals. Be it Kellogg’s aim to “nourish families so they can flourish and thrive” through nutritious breakfast cereals; Patagonia’s being “in business to save our home planet”; or Sumo Salad aiming at “make Australia a healthier and happier place”—shaping a business’s activities and goals around purpose can help companies to gear their operations towards maximum value for their stakeholders.

A PwC study adds a fourth reason: purpose-driven companies connect more strongly to a younger generation. The study posits that “millennials who have a strong connection to the purpose of their organization are 5.3 times more likely to stay”. In a world that evolves every day, millennials are always seeking something meaningful to train their focus on and gain satisfaction from. Purpose presents that anchor or reference point on which millennials draw their gratification from. Fresh consumer data shows that customers view purpose-driven brands as being more caring and, as a result, are more loyal to them.

Purpose-Centered Pushes Purpose-Driven To A New Level

At Stuart McFaul Associates, we believe that purpose-centered is even more powerful than purpose-driven. The focal point is critical: the more focused you are on your purpose objective, the more likely you are to be always conscious of why you do what you do. It’s a success mindset that helps you get up in the morning enthusiastic, always keeps your purpose in sight, and helps you more easily enroll others in your cause. Here’s the difference at a glance:

Purpose-CenteredPurpose-Driven
Self-motivatedYou’re being pushed
Centered; it’s your focusIt’s behind you, making it easy to lose focus
A target others can see and move towards as wellNot easy to share with others who don’t feel the same “push”
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16 Compelling Facts about Purpose-Driven Companies and Profitability

Purpose-driven companies (PDCs) have unique advantages when it comes to building audiences and achieving profitability. Here are 16 facts that underscore that potential.

  1. Purpose-Driven Companies Achieve Higher Success Trajectories More Quickly
Purpose-Driven Companies Meet Great Success

Popularity

  1. 78% of consumers would tell others to buy from PDCs versus non-PDCs
  2. 80% of consumers are loyal to PDCs that help them achieve Good Life (balance/simplicity, meaningful connections, money and status, personal achievement)
  3. 79% of consumers have deep loyalty to PDCs; 73% would forgive a misdeed
  4. 64% of consumers will buy or boycott based on a PDC’s position on sociopolitical issues

Promotion

  1. PDCs typically have three times more information of interest than their competitors
  2. 68% of consumers are more willing to share content generated by PDCs

Profitability

  1. Two-thirds of consumers will pay more for products from PDCs
  2. On average, 70% of shoppers will pay a premium of 35% for PDC-driven products/service

Purpose-Driven Companies Please Investors

Investors believe PDCs are able to transform and innovate better.



  1. PDC investment booming up 25% over past two years
  2. PDCs have seen valuation surge by 175% over past 12 years (versus 70% for non-PDC)

PDCs with engaged management exhibit superior accounting and stock market performance.

  1. Over a ten-year period, stock in PDCs outperform their competitors by a factor of 12. 

Purpose-driven companies are particularly successful in recessions.

  1. Purpose-driven companies achieved 51% annual growth rate during 2008 recession
  2. From 1996-2013, they grew 1681% as compared to S&P average of 118%
  3. In UK, PDCs are growing 28 times faster than the national economic growth of 0.5% 
  4. In last recession, PDCs were 63% more likely to survive than other businesses of similar size.

For a link to bibliographic resources for these statistics, click here.

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The Ten Superpowers of the World’s Most Successful Brands

Over twenty years ago, when The Smithsonian asked to add our original Living Brand model to their archives, we knew we had the right approach (building an empathetic relationship), but we wanted to dig deeper. What did successful brands do specifically that helped them achieve success?

Fundamentally, we learned that successful brands simply approach business in a different way from run-of-the-mill companies: they fundamentally believe their mission is to not just build a company, but to build a brand.

After studying hundreds of companies, we isolated these factors, then put them into practice with our own clients. As a result, we determined there were ten things that separated successful brands from also-rans.

Because of the unique strength they provided companies that put them into practice, we called these ten principles “superpowers” (or “powers” for short). Living Brand superpowers are easy to learn; the list is below.

The real challenge lies in how you properly put them into practice. After working with dozens of companies to do this, we have a unique approach to defining which powers would be most effective for a client. It may be a single power, such as how we leveraged Intelligence for Hitachi. Most often, it is using a mix of powers so each strengthens and reinforces the other so the whole is greater than the sum of the parts. A good example of that is the work we did with Gaia.

What Are The Superpowers?

Most simply, superpowers are factors that a company may want to be known for that are used to better connect with their audiences. They are the unique identifying code that resonates with a brand when it is mentioned. Your work is to nurture your superpower(s) to synch with your genuine nature, then leverage these strengths in order to optimally connect with your audience.

The ten superpowers are:

  • Authenticity: Do you tap into the genuine nature of your brand and values with the intent to never go contrary to what it stands for? Is your brand original in delivery and not a clone of other pre-existing brands?
  • Integrity: Do you and your team behave in a way that is consistent with your authentic brand values? Are your moral principles incorruptible?
  • Distinction: Can you be easily distinguished from your competition by your words, images, standards and behavior? Are you different in nature and delivery as compared to other brands in your field?
  • Relevance: Are you current and pertinent to your target markets’ real interests/ needs? Are you participating in their zeitgeist? Is your brand responding directly to their requirements?
  • Vibrance: Do you live your brand? Do your actions demonstrate that you are engaged, energetic and dynamic? Are you actively seeking opportunities to connect with your target markets in ways that allow you to bring your values to life?
  • Intelligence: Are you thoughtfully participating in and leading the conversation, making everyone better and wiser from the contributions you make? Do you generate valuable insights to make their lives better?
  • Generosity: Are you truly making a contribution that benefits your customers, your community or your industry?
  • Value: Is your brand worth your constituents’ time, and money? Is it worth foregoing other competitors in the same business?
  • Consistency: Do you only do things that align with your consistent and distinct brand and never go contrary to what it stands for?
  • Resilience: Can your brand’s principles withstand or recover quickly from the test of time and remain steadfast and dependable over the years? Or will they fade away at the slightest sign of trouble on the horizon?

Tapping into your superpowers is just the start of your journey; the long-term key to success is how your use your powers to positively affect your key audiences at every touchpoint. That is where we can help you. Our decades of experience helping companies discover their superpowers and bring them to life can be a tremendous jump-start in improving both your marketing and overall business performance. We’d enjoy exploring how we might help you on the path to success. Give us a call today!

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The Crow’s Nest Conundrum: Are The Right People Guiding You to Success?

Many years ago, Stuart worked with Carol, a brilliant marketing executive who had one ongoing complaint: she had the hardest time seeing outside “The Swirl.” She characterized The Swirl as you standing in the middle of a tornado, where everything was spinning and happening so fast around you that you couldn’t see beyond it. In her opinion, this was the biggest obstacle to success because she could never get total clarity on what was really happening around her and where she needed to go.

The Swirl is a very common issue for entrepreneur. One of the most difficult issues faced by company founders and their teams is that, when focusing on near-term demands and problems, they often lose sight of the larger picture. Their initial objectives (sometimes their company purpose itself) become obscured by everyday business problems, such as hiring the right staff or meeting financial objectives. In the best cases, they can see this is happening and course-correct quickly. However, in most cases, the lack of focus takes them off their original path. For an unfortunate few, they never find the path again.

We call this situation “The Crow’s Nest Conundrum.” When captains are piloting their ships through choppy waters, their attention must be at sea level or all could be lost. So how do they keep focused on their long-distance destination… the land they can’t even see?

The solution is the crow’s nest. According to Wikipedia, going back to ancient times, Theon of Smyrna noted that by climbing the mast of a ship, one could see the land that is invisible to those on deck. This realization led to the creation of the crow’s nest, an upper part of the ship used as a lookout point to spot approaching hazards, other ships, or land by naked eye or use of a monocular. Until the invention of radar, crow’s nests were the key mean to ensure captains could guide their ships safely to port.

Today’s fast-paced business demands a strong captain supported by sharp-eyed people in the crow’s nest. As consultants, this is one of the key advantages we can bring as outsiders. We’re outside Carol’s swirl and can rise above the sturm und drang of everyday demands to help keep you on course. We see this as privilege and a responsibility.

A good example of this is the work we did for Evi. When we ran into a huge potential obstacle, our crow’s nest thinking helped us develop a solution that prevented the company from being dashed on the rocks. You can read about it here. This also works well for positive opportunities, such as the uncovering a golden opportunity for Be Here with Apple Computer.

Do you have someone watching out for you on an ongoing basis, helping you better navigate the rough seas of business? If not, we’d be glad to discuss how we can help. From planning to program management to executive coaching, we can help guide you on a safer, surer route to success.