We are excited to see that businesses are increasingly working with purpose as a means of building their brands and business. We have explored the concept of purpose in a series of annual studies. One objective is to study and learn from the most purposeful companies. We’ve asked ourselves and consumers what typically characterizes these companies. What do they do better than others? We share some of our findings below.
Our thoughts on purpose
We believe that purpose should be at the core of what the company does. It is not green washing or donating money to a cause that is better than one’s own. Instead, it should be the company’s true north.
Purpose is about making a positive impact in people’s lives. The first part of this is having a relevant offer that adds value. The second part is doing this in a way that respects a wider set of stakeholders, for example society or the environment. Combined, these two perspectives create a focus that helps guide the company. It does this by becoming part of the business model and by directing everything from innovation to communication. It also does this by engaging humans. Purpose is what motivates employees as well as consumers to engage with the brand.
The business impact of purpose
If we ask people about what brands they think are purposeful and which companies will grow in the future, we see that there is a relationship between the two. They believe that purposeful companies have a higher potential for future growth. There is also a correlation between being purposeful and being a preferred choice. This supports a belief that we have had from the start: that companies that have a positive impact on the world are likely to deliver better business results.
What makes a good purpose?
IKEA, Google, Spotify and Volvo Cars are examples of companies that people think are driven by a strong purpose. What characterizes these and other purposeful brands is that people associate them with one or a combination of five factors. We believe that these five factors are the building blocks of a great purpose. Each of them is made up of several associations that consumers have with brands.
Two of the factors – trust and responsibility – reflect the brand’s history. The other three – new thinking, visionary and future-proof – capture what people think their future will look like. These are the factors that characterize purposeful companies:
- They are trustworthy
- They act in a responsible and ethical way
- They are innovative
- They are visionary and has a bigger idea for the future
- They are relevant for the future
Companies that live by their purpose become leaders of a movement. We believe that this type of leadership creates business opportunities and future growth. We want to help business managers find the future movement they will lead.