Marketing may have just given one of its most important contributions to the business world but risks not getting any credit for it.
"The CEOs of nearly 200 companies just said shareholder value is no longer their main objective”, reads the CNBC news headlines. The article refers to the statement signed by 181 CEOs of big American corporations at the end of last month, proposing that the reason for any business to exist should go beyond generating economic value to its owners. The statement, which took over the world like rapid-fire (see it here in Brazil's main business paper), declares that:
"While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders (…) We commit to deliver value to all of them, for the future success of our companies, our communities and our country.”
Sounds great. But doesn't it also sound a bit… obvious?
There is no doubt that bringing all of those big bosses together to sign up to that is no small feat, but if you work in marketing and branding this shouldn’t come as big news. Every time a marketer talks about brand purpose (let’s just call it “purpose” from now on), we know it’s not just about filling shareholder's pockets with some extra stock price increase.
Even though this The Economist article about the CEO' Business Roundtable tries to economize the term purpose by referring to it as “collective capitalism” or “serving stakeholders as well as shareholders”, it’s reasonable to say that this movement has been propagated by two key actors:
The millennial breed of social and tech entrepreneurs
Marketers, everywhere in the world
Let me focus on this second species
I remember vividly at my early ages at Interbrand in São Paulo when a lot of brain power was being invested on what makes a great “Propósito”. That was - and still is - a key product sold by brand consultancies: helping big corporations reconnect to their heritage, embrace the ways they matter to customers, and define an essence to guide future business activities. Instead of making decisions solely based on the question “how much money can we make out of this?”, we've introduced questions such as “why should people bother?”.
Purpose became one way to summarise brand strategy in a sentence (or at least a fundamental part of the brand strategy).
A key contributor to this movement was Simon Sinek and his idea of the Golden Circle, which resulted in one of the most viewed TED Talks of all time. He’s point was that the key value force behind companies relied on "why" they exist, rather than the “what" they do or “how" they do it.
Then there was the book “Grow" from former P&G CMO Jim Stengel, bringing a stronger economic rationale for purpose as a driver of superior business performance. He also helped to give more dimensions and depth to the theme, clarifying that it’s not necessarily about companies trying to save the world.
Progressive business magazines such as WIRED and CMOs all over the world pushed hard on the purpose agenda, and it got board level buy-in. It’s hard to find a company today that haven’t defined it in the ‘about’ section of their websites or a CEO that doesn’t start an important interview with this vision (that obviously doesn't mean that all purpose definitions are good, honest or work well).
So... why isn't anyone talking about marketing's fingerprints stamped all over this CEOs' statement?
Well, probably because it doesn’t really matter who gets the credit. Maybe the job is done once the idea conquered the hearts of senior leaders and they are talking about it with full accountability. That's one view.
The pessimistic view is that marketing would be treating purpose just as… “marketing". Smoke screen, lipstick on a pig, trickery with little commitment to the truth about a product or service offer. Once the purpose conversation and fundamental importance to business got serious, bosses were quick in taking the ice cream from the child’s hands.
A significant part of the backlash comes from the marketing community itself. The excellent MarketingWeek columnist Prof. Mark Ritson isn't a fan, and behavioural science specialist Richard Shotton debunked the economic case for purpose made on the book "Grow" on his chapter of Eat Your Greens.
Main criticism comes from the fact that companies often don't live up to their purposes (by not paying proper corporate taxes, for example) or they exaggerate the consumer effect. Consumers are busy animals, with limited time to think about brands. Most don’t really care about a companies' reason to exist, mainly if this reason is only coming to life in a piece of advertising.
If marketing wants to keep driving this conversation, it needs to elevate the quality of the conversation by aligning on what purpose does and what it doesn't do for a companies. Here are my two cents:
PURPOSE DOES:
PURPOSE DOES'T
Necessarily have an impact in consumer choice or price premium
Necessarily drive product innovation
Substitute other elements of a marketing strategy (e.g. insight, promise, etc)
So, what then?
There is a long road ahead, but the statement signed by the more than 180 CEOs is a positive message to the world.
And, in this case, it does matter who gets the credits. Marketers get the blame for a lot of bad things out there, so let’s celebrate the wins and make this purpose thing work even harder. It’s relevant for business, it's important for society.
Purpose belongs to everyone in the company, ideally driven by the leadership, but marketers have specific responsibilities (i.e. voice of the customer) and skills (i.e. imagination and narrative) that puts them in a better place to articulate, manage and deliver it. Hence the title of this article.
We just need to get rid of the bullshit and align on what purpose does and what it doesn’t do for business. Who knows, we may even lead some good world-change along the way.
Cover picture by Etty Fidele
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