Niamh Boyle, founder and managing director of The Reputations Agency, explains as to why companies and organisations should give a lot more thought and energy to purpose in an effort to boost consumer confidence and profitability long-term
Covid-19 has given us a chance to think about the true meaning of purpose as we observe corporate behaviour and advise clients on theirs. For 15 years, The Reputations Agency has worked with over 50 global and Irish clients and witnessed how the marriage of brand values and a sense of purpose can deliver strong reputations and business results.
Rethinking purpose can be helpful to an organisation and its employees. With our world facing an unprecedented crisis, now may be the best time to act. Owners of top brands are in self-reflection which is prompting organisations to look at their assets and expertise and examine their role now and in the future in a way that reflects their brand purpose.
REWARDS
Many brands are doing their best to assure customers and employees they are there for them. Some put purpose before profit. The rewards will come later when consumers recall how these companies behaved and will choose them ahead of others. LVMH retooled its production lines to produce hand gel rather than perfume to support France’s State health bodies.
Irish Distillers is now manufacturing alcohol gel at its Midleton distillery for the HSE. Unilever donated soap, sanitiser, bleach and food to the value of €100 million. The Anglo-Dutch home products group’s chief executive Alan Jope said that their strong cash flow and balance sheets meant that they could – and should – give such extra support.
Stamp of approval: An Post is a prime example of a company that puts both trust and thrust in a purpose that resonates with stakeholders. Its credo is building a business which will “act for the common good, to improve quality of life now and for generations to come”. Pictured is postwoman Denise Jordan delivering two of An Post’s five million free postage paid postcards to help people ‘stay connected while remaining apart’ during the Covid-19 crisis.
But some companies struggle to define their purpose and appear to be tone deaf to the times. A purpose statement that includes “maximising shareholder value” is not relevant in the new world in which we now find ourselves. In an ill-judged move, by initially insisting on staying open as an “essential service”, Sports Direct prompted an angry response from the British government. They soon expressed regret and offered support to the NHS.
Companies have made costly mistakes with poorly-activated corporate purposes that don’t resonate with stakeholders. An Post initiatives include tackling the gender pay gap, a commitment to SDGs, pledging zero-emission city deliveries and Address Point, a global first giving homeless people a personal address. During Covid-19, postal staff check on older and vulnerable people and offer free mail and parcel pick-ups for housebound customers.
GLOBAL TRENDS
Working with our global partners at The RepTrak Company, we discovered the 10 macro-trends driving reputation, based on talks with 170 CCOs and CMOs. Ranked 10 to two were tensions on trade tariffs, gender equality, political polarisation, nationalism vs globalism, fake news, CEO activism, employer of choice, market influencers and cyber attacks.
But the big challenge – even before the Covid-19 outbreak – was how to instill a higher corporate purpose. We all need a sense of purpose. As marketers, we rely heavily on understanding brand – the way we project ourselves to the world and reputation – how we are perceived by society. But that’s not enough. Companies need to exist for something other than profit. Companies must justify their existence by how they contribute to society at large.
With a strategy in mind: Niamh Boyle pictured alongside her executive team colleagues at The Reputations Agency. From left, Marna Harmey, senior client manager; Fiona Askin, account director; Catherine Walsh, head of CSR; Eoin Young, digital and social media manager; Anne Browning, head of TRA Brands and Aoife McDonald, account director.
A NEW WEAPON
A strong brand purpose focuses on more than revenue and growth – it inspires, is forward-looking and speaks to the greater, positive impact an organisation plans to achieve. In January, Larry Fink, CEO of BlackRock, stated that a company cannot achieve long-term profits without embracing purpose and considering the needs of all stakeholders.
“A strong sense of purpose and a commitment to stakeholders helps a company connect more deeply to its customers and adjust to the changing demands of society. Ultimately, purpose is the engine of long-term profitability,” Fink added. Marketers should think of purpose as a new weapon, helping to shape corporate values, build internal alignment, coherence and consistency, enhancing the brand and delivering a stronger public impact.
PURPOSE POWER INDEX
On Thursday, May 7, The Reputations Agency launches the Purpose Power Index (PPI).
The PPI will examine which organisations and sectors the Irish general public believes have performed best during the current Covid-19 crisis. The results of the research, using a proprietary purpose model, will be announced at an online briefing, along with the results of the agency’s much-anticipated annual Ireland RepTrak 2020 study.
The core of the PPI algorithm, the Purpose Pulse, is based on perceptions of whether companies are acting beyond profits, improving lives and benefiting society. The US study pointed to five essentials in becoming a purpose leader: Getting your purpose right, operating responsibly, taking a stand, acting boldly and communicating authentically.
The US study revealed disruptor brands such as Seventh Generation, a Vermont-based company that sells eco-friendly cleaning, paper and personal care products. Seventh Generation believes that climate change is our generation’s problem to solve and for over 30 years the plan is to create a healthy, sustainable and equitable world for future generations.
They bring this to life by using plant-based ingredients, packing transparency, recycled packaging, financing micro-businesses and through advocacy for climate justice and equity. The company was purchased by Unilever for an estimated €700m.
Retrieving a new impetus: Mars Petcare, part of the US food multinational, defined its purpose as ‘A Better World for Pets’ and used it to expand in the broader field of pet health from pet food through to the veterinary market, shifting its focus from products to services. It achieved its transformation because every move was aligned with the same core purpose.
STRATEGIC SHIFT
An article published in the Harvard Business Review, entitled ‘Put Purpose at the Core of your Strategy’, shows how successful companies can redefine their business through purpose. The researchers investigated three strategies known to drive growth, namely creating new markets, serving broader stakeholder needs and changing the rules of the game. But a fourth critical growth driver surprised the researchers, that being purpose.
The researchers found that while many companies consider purpose merely an add-on to their strategy, the more successful, high-growth companies put it at their core, using it to redefine the playing field and reshape their value proposition. Mars Petcare defined their purpose as ‘A Better World for Pets’ and used it to expand in the broader field of pet health from pet food through to the veterinary market, shifting its focus from products to services.
It pulled off the transformation because every move was aligned with the same core purpose.
Mahindra Finance, part of the $20 billion Indian conglomerate, looked to its parent company’s purpose-driven strategy of improving customers’ lives, encapsulated by the motto ‘Rise’. MF decided to address the unmet needs of customers in a market with considerable potential. It meant they needed to understand and change their way of doing business.
They had to meet the needs of an audience that was mostly poor, illiterate and unbanked, with no identity document, no collateral and cash flows impacted by monsoons. Remarkably they managed to build trust and then stretch their value proposition to include insurance, working capital finance for micro businesses and housing finance.
Throughout they were guided by a purpose of helping rural citizens improve their lives.
ACTIVATING
Our agency experience has shown us that developing a corporate purpose is one thing but going ahead and activating it is another. The chosen purpose must translate into actions. Defining a corporate purpose requires a top-down approach, bringing the whole company on the journey before communicating and acting on it outwardly in confidence.
We advise a blend of internal and external stakeholder research to help bring clarity to your potential corporate purpose, vision, values, culture and narrative, ideally in a staged process including employee, executive management and board surveys, with high level results collated and communicated internally.
Purpose can be retrospective. It can build on a firm’s reason for being by codifying organisational and cultural DNA and making sense of the firm’s past, or prospective, requiring you to look forward, take stock of the broader ecosystem in which you wish to work and assessing your potential for impact in it, so making sense of your company’s future.
A series of purpose workshops for key internal audiences and the executive management team can help agree upon a course and the activation plan to bring the corporate purpose to life, ensuring that communications across key stakeholders speak with the same voice.
Our belief in the power of purpose and reputation drives our agency and underpins everything we do. We are proud to act for some of Ireland’s top indigenous and global brands, partnering with them to provide insights and craft strategies that transform business results.
For an invite to A Higher Purpose online event, taking place from 10am to 11.15am on May 7, email aoifek@thereputationsaency.ie
- For more Covid-19 marketing and media related stories, just click on https://marketing.ie/2020
