Playing To Win
Promise over Purpose
How to Make a Sustainable Contribution
Corporate Purpose continues to be a robust, growth industry. The articles and books keep coming with no end in sight. There are the usual wild claims about its link to corporate success. I have written about corporate purpose before in this series, but I feel that there is more to say. Hence, this Playing to Win/Practitioner Insights piece is on Promise over Purpose: How to Make a Sustainable Contribution.
The Purpose Industry
The purpose industry has a good model. The general form is to take a successful company that has a lofty corporate purpose that, if fulfilled, would be unambiguously good for the world — like Patagonia (“in business to save our home planet”), Tom’s of Maine (“help others live a more natural life”) or Ben & Jerry’s (“using ice cream to change the world”) — and argue that the social purpose made them commercially successful, and your company could be too if it did likewise.
The model has lots of enthusiastic takers. Academics love it and promote it. The press loves it — mainly because it provides a handy way to hammer all the companies that don’t have a purpose that meets with their approval. It is evident that publishers love purpose because they keep publishing books and articles on the subject. For example, Harvard Business Review (HBR) has published 28 magazine, digital, or video pieces on corporate purpose in the past year. That is almost double the number for the ultra-hot topic of Artificial Intelligence (16) and almost half as many as the much broader topic, strategy (60).
The purpose industry doesn’t like to talk so much about TOMS (the shoe company not the toothpaste company) which was founded in 2006 with the lofty corporate purpose to “use business to improve lives,” which was manifested in its pledge to give one pair of shoes to a needy recipient for every one that was bought by a paying customer. It sounded good, but TOMS needed to turn itself over to its creditors (to avoid going into bankruptcy) in 2020. Nor does it like to talk about the corporate purpose that sounds like it was created during a weed-induced haze, WeWork’s “to elevate the world’s consciousness.” How that would happen on the account of WeWork was never spelled out — and painfully obviously not achieved.
How I Think about Corporate Purpose
My thinking on corporate purpose has been influenced by what I learned through a piece of work that I did on branding with Jann Schwarz and Mimi Turner of LinkedIn in collaboration with the World Advertising Research Center (WARC), the results about which we wrote in the Jan-Feb 2024 issue of HBR.
I had always been intrigued by the link between promises and brands, and wrote about it three years ago in this series. But this time, we studied the question much more rigorously in a huge sample of advertising campaigns (2,021 of them!) provided to us by our great collaborators at WARC. As the HBR article describes in much greater detail, we came to a striking finding. Advertising campaigns that make a memorable, valuable, and deliverable/auditable promise to the target customers outperform the ones that don’t (a majority of 60% of all studied campaigns) by a wide margin.
For example, the fastest growing car rental company, Sixt, promises “Don’t Rent a Car, Rent the Car” — i.e. you will receive exactly the vehicle model that you booked. It is memorable with its counter-intuitive twist — a rental car company telling you not to rent a car. It is valuable to its segment of renters, which are more luxury-oriented, who are tired of reserving a specific model from a specific OEM and being given another when they get to the rental car counter/aisle. It is deliverable/auditable in that Sixt organizes specifically to deliver on the promise and customers can easily audit performance every time they pick up their Sixt rental.
My new insight from this work is that customers want a very direct promise from the company to them. Elliptical promises don’t cut it. For example, when a company advertises that it is #1, it may think that it is making a promise that the customer experience will be great. It is not as though that is entirely untrue — the fact that lots of other customers use the company’s offering does indicate something positive. But it is far too indirect. It is more powerful for the company to say: we are going to do this for you.
A well-constructed and direct promise like Sixt’s is a powerful tool for success — that is obvious from the research. The type of benefit promised had different forms. Our expectation going into the research was that functional benefits would reign supreme — like FedEx’s “when it absolutely, positively has to be there overnight.” It turns out that functional wasn’t a clear #1 benefit, not even the #1 benefit at all. It was #2, albeit by a small margin. The surprise #1 was an emotional promise as to how the brand will make you feel was , like DeBeers “a diamond is forever,” Coke’s “have a Coke and a smile,” or Lysol’s “protect like a mother.”
Promise Dominating Purpose
That high incidence of successful emotional promises to the customer (PTTC) gave me an insight into a more productive way to think about purpose. A corporate purpose can be seen as an emotional PTTC — i.e., this is the positive effect that us fulfilling our purpose we have on how you feel. That is, if your purpose is expressed as an emotional PTTC that is memorable, valuable, and deliverable/auditable, it can be sustainably valuable for customers, and hence company, and hence society.
(Obviously, the purpose can also serve as a helpful promise to employees making it easier to recruit, motivate, and retain employees. I focus on customers because if the positive effects aren’t seen in customer behavior, they won’t be sustainable.)
For TOMS shoes, perhaps the promise to give away a pair of shoes for everyone purchased was memorable, valuable and deliverable/auditable and provided an emotional benefit for customers for a time when it was a fresh idea. But clearly it wasn’t deliverable profitably after a decade or so and hence the financial collapse of TOMS. For WeWork, no one cared about the world’s consciousness being elevated and in no way was it a deliverable or auditable PTTC, so that purpose didn’t save WeWork from itself.
Ben & Jerry’s purpose is “using ice cream to change the world.” Thought of as a PTTC, it is highly elliptical — there is no link to the customer, nor particularly to the product. But Ben & Jerry’s makes some specific promises that may make customers feel an emotional benefit including the commitment to donate 7.5% of pretax profits to social and environmental causes since 1985. That having been said, even if its promises are seen to be memorable, and valuable, it is hard to see how the company can make the overarching purpose deliverable and auditable — 7.5% of pretax profits may or may not enable ice cream to change the world.
In addition, the case for the sustainability of this purpose is somewhat muddied by its corporate transformations — being bought by consumer goods giant Unilever in 2000 and then announced as a spin-off (not yet completed) in early 2024. Few would question that its quirky persona combined with its purpose put the company on the ice cream map. But it is harder to see how the purpose will underpin or sustain its performance in its post-Unilever incarnation.
The purpose of Tom’s of Maine — “help others live a more natural life” — feels like a less elliptical PTTC than “using ice cream to save the world.” The benefit is directly embedded in the product itself. However, from a PTTC standpoint, it would be better for the purpose to be to “help our customers live a more natural life,” rather than the vague “others.” Framed more specifically as a PTTC, it feels memorable, valuable to a segment of customers, and both deliverable (Tom’s does have a positive impact on the degree to which its customers live a more natural life) and auditable (customers can read the label to audit the degree to which the ingredients are natural).
This feels closer to a sustainably valuable purpose/PTTC than Ben & Jerry’s. It is less elliptical — directly about the benefit the product will have for its customers. Of course, its situation was also muddied by its acquisition in 2006 by yet another consumer goods giant, Colgate-Palmolive. However, the founding family (and creators of the corporate purpose) maintained a 16% stake in the company, which provides a stronger link to the purpose/PTTC over time.
Patagonia has always intrigued me. It makes great apparel, some of which I have long owned. I bought my first pieces long before I had any idea it had a notable corporate purpose. In fact, those early purchases were before Patagonia began its environmental push, which appears from its own corporate history to have started in the mid-1980s.
The Patagonia purpose is far from a PTTC: “Patagonia is in business to save our home planet.” While that statement may be memorable and emotionally valuable to customers, it is hard to be confident of its deliverability or auditability. That having said, Patagonia moves down a level of abstraction from that purpose to make memorable, valuable, deliverable and auditable PTTCs related to what Patagonia actually does for customers. For example, in 1996 it promised to make a 100% switch to organic cotton and delivered on the promise. More recently, it has promised to “eliminate virgin petroleum material in our products” by 2025.
Basically, I am not nuts about the abstraction of “save our home planet.” It is not deliverable and certainly not auditable. Patagonia cannot save the planet — it can however contribute to that goal. But the important point, I believe, is that without a set of PTTCs that are memorable, valuable, and deliverable/auditable alongside the more abstract purpose, I am not convinced that the Patagonia purpose would create sustainable value.
Practitioner Insights
I like win-wins and have written books (here and here) and articles about them. In this HBR article, I argued that a lofty purpose that works economically for the company in question can have a disproportionately beneficial impact on society — in part because others will mimic successful purposes. So, I am inherently attracted to lofty purposes — but only if the business succeeds because otherwise it won’t achieve or sustain its lofty purpose, like WeWork which never achieved any lofty purpose or TOMS which had to abandon the one-for-one shoe giveaway after falling into financial distress.
To be more specific, I am keen on lofty purposes that aid the companies declaring them to prosper. That is how companies can make the world a better place — sustainably. The best way to do that is to ensure that your lofty purpose is simultaneously a PTTC that is memorable, valuable, and deliverable/auditable.
I like the corporate purpose of Tom’s of Maine — though restated to “help customers (not others) live a more natural life” because it is clear, it is valuable to a segment of customers, and it is both deliverable in its products and auditable by customers. But Tom’s of Maine is a rounding error in its own business (mainly toothpaste) at less than one-tenth the size of the leading brands (Crest, Colgate and Sensodyne). The trick is having a lofty PTTC that is great for humanity and memorable, valuable and deliverable for lots of customers.
On this front, I have always liked P&G’s purpose: “provide branded products and services of superior quality and value that improve the lives of the world’s consumers, now and for generations to come.” That makes the world a better place — and because P&G is gigantic — for a whole lot of people. The more companies that can make such a positive impact broadly, the better off we will all be.
