Branding and business purposes are particularly important in times of tension between social demands and what has been called the post-truth era.

Purpose: From lat. Proposĭtum. An intention or aim; a reason for doing something or for allowing something to happen.

In general terms, companies are born with a purpose which gives to their existence a deep and transcendent meaning. The purpose responds to the “why” of the company far beyond its business objectives.

Historically, in each and every moment, and accordingly to a given context, most of those who creates a company, defines  a purpose.

Correctly articulated, the purpose is a strong connection between legacy and aspirations, in which relationship time, emotional intensity, intimacy and reciprocity between organization and people are combined.

Trying to make it simple, the differences among classic business definitions are:

  • Positioning: What do I promise? What it functionally offers, the reasons to believe and what the company expects its audiences to feel when facing their offer
  • Purpose: Why do I exist? Sometimes it exceeds the economic reason of the business
  • Values: What are my cultural features? They are translated into behaviors which characterize the organization
  • Mission: What am I for? Explains the current activity of the company and the scope of such activity – key audiences, geographies, etc.
  • Vision: Where am I heading? Shows the aspirations of business
  • Idea: What set me apart from the rest? What makes the company emotionally different

Is Talking about Purpose a Fad?

Some people tear one’s hair in order to prove that their purpose is bigger than their neighbor’s one, even taking advantage of this post-truth period, exaggerating the situation to levels which remove any type of credibility.

The truth is that many speak on purpose, some think of purpose, and few are consistent in stating their purpose and bringing it to life.

The purpose is as old as the concept of company, however, is not always explicit and in some cases, over the years, it fades – and even fall into oblivion.

Purpose is not what is done as CSR, it is what the company does as part of its business but not for doing business.

There are several reasons, which are reinstalling purpose in the top management agenda:

  • Convergencia de intereses entre audiencias clave y sociedad en general
    • Due to the book “Theory of the firm” written by Michael Jensen and William Meckling, in 1976 there was a deep change in the conception of business
    • It suggested that among all the audiences of a company, the shareholders had a preference and that the purpose of the company was to maximize the results for that specific group
    • This is implemented, generalized and exacerbated by the 90’s capitalist system. However, in the search for such results there was no adequate control of the decisions of top executives ended up becoming one of the causes of the crisis of 2007. This was indicated by John C. Bogle prediction in 2005
    • From that moment onwards, shareholders have begun to demand results that go beyond the economic results, attending to social and environmental impacts
    • This was not an act of kindness, but a rebalancing of power in which shareholders recognize that it is not a question of earning more money, but of achieving better results, obviously ensuring that the system and those who manage it are under control
  • Requirement of an interconnected society
    • New technologies allow global and immediate reaction, even if the action is small acts and seem to have no apparent connection –the “butterfly effect”
    • It’ not only about copying examples of actions that start somewhere on the planet, but also acting from where someone is to contribute with his/her grain of sand in post of a higher good
    • It is interesting to note that events are not limited to the network that interconnects but are transformed into effective actions, for example in specific voluntary actions or changes in consumption patterns of some products, which goes beyond activities proposed on internet as they might be the ones created in change.org
  • Positive returns make businesses last on the long-term
    • Companies that act according to their purpose obtain better results on a long term
    • A study compared companies with the highest reputation with the S&P 500. It was observed that, between 2006 and 2013, companies with a clear and evident purpose grew 75% more than the others
    • Also, the Barrett Values Center shows that companies which have a recognized leadership and culture, integration of their key audiences and live their purpose obtain returns that grow three times faster than those obtained by S&P 500
    • Other metrics of different origin indicate the same evolution

Different measures showing that whoever has purpose obtains better results

Why do Purposes evolve?

Purposes are permanent; however their contents evolve over time.

What used to be good may be frowned upon today, what used to be a matter of importance today is not and vice versa. Think of transgenic vegetables, use of fossil fuels, climate change or equality between men and women.

Today, the newly created companies have the advantage that those who create them –especially the Millennials, already have incorporated two themes that are related and are complementary:

  • They understand that business must be born with a purpose, even though they do not necessarily consider that the company will transcend them in time
  • The purpose must consider both an economic result as well as a demonstrable and measurable positive impact

For companies that have been in the market for several years, it is about rediscovering their purpose, updating it and bringing it effectively to life.

Companies guided by a purpose know and recognize that they are engaged in changes in a turbulent, ambiguous, uncertain and complex context to which they must be attentive, because that is where the requirements of adequacy are generated.

Branding Speaks about Purpose, Does it Make Sense?

The brand has also evolved since its first appearances more than 9,000 years ago –the earliest historical records date back to brands, symbols and signs found in the ruins of the great Mesopotamia cities.

The professionalization of its management, from Neil McElroy’s memo in 1931 up to date has also shown its evolution.

The brand has gone from being a marketing tool to becoming a strategic business platform, from brand management to brand leadership.

For example, when we see the “Starbucks’ Mermaid”, in addition to being able to imagine the experience they will offer us in terms of products, prices, convenience, space or attention, we begin to add issues such as values and principles, fair trade, internal learning efforts, social actions, business ambitions, history and legacy.

Starbucks’ brand evolution

All these issues are aligned with the corporate strategy and lead the brand to consider it as a synthesis and catalyst of what the company was, is and will be. The brand is the intuitive nexus that allows establishing conversations between people and organizations, and this is previous to the useful and necessary transactional aspect required to close a sale.

Brands with a Conscience, Are they like Teresa of Calcutta or Part of the Borges’ Magic Realism?

Like “effeuiller la marguerite” –she loves me, she loves me not, there are brands that convey purposes that we like and others we don’t.

This does not mean that the path that has decided to follow the company is the right one. We should pay attention and discover if there is some sort of pragmatic business activism, if a true result is pursued socially and environmentally as well as economically.

Galactic Republic and Confederacy of Independent Systems Shields

Let’s see the two sides of the coin:

  • The Jedis: From Tony’s Chocolonely –Dutch chocolate without child slavery, to Unilever have a purpose, they exert some pragmatic activism, even their Ben & Jerry’s unit goes much further, and their brands transmit it. Fashion companies -an oxymoron on this topic, like Stella McCartney or Vivienne Westwood are true to their purpose; H&M is on the path of economy 360º
  • Leaving the dark side of the force: DuPont produces and sells Neoprene, Nylon, Teflon, Lycra, or Kevlar, products whose biodegradation is almost zero. Since 2003 also offers products that do not harm the atmosphere, has developed the Sorona, a polymer obtained from maize starch –organic and biodegradable. Its activism is lower than the Jedis’ ones, however, its purpose has been reborn and is adapting to the demands of a new reality.

They can be praised or criticized –in some cases highly criticized, what is relevant at this point is that they are doing something positive. We should know how to balance desire with possibility, aspiration with reality, idealism with practicality.

The journey just begins; maybe the key is to find the right companion to live this great adventure.

Neither the coolest, nor the biggest, nor the one who talks too much … It is about walking through the path that guides your purpose with those who think, say and do in a consistent way.

Cristian Saracco
Founding Partner at Allegro 234
• Member, The Medinge Group
• Board Member, aebrand
• Associate Professor, Loyola Leadership School
• Guest Speaker, ESADE
Would you like to talk with us? Contact us