The case for purpose-led brands (but not jumping on the purpose bandwagon)

Purpose has well and truly made its way onto the management bingo register in the last few years. That may seem a little harsh but the number of companies which claim purpose as a core value or promote themselves as purpose-led has skyrocketed. Whilst some are doing a genuinely good job, there are plenty who do no more than pay lip service to their purpose credentials, leading to a good deal of cynicism.

Before we dismiss it completely, what can we learn from the focus on purpose and ensure that it is a positive for our brands?

Why we’re all so interested in purpose

Delivering good quality products and services is no longer enough to compete effectively. Traditional capitalism, once the doyen of progress following the industrial revolution, no longer holds the attraction it once did, nor a clear route to success. A recognition that meaningful brand value is about more than revenue and profits, that broader contribution to society and sustainability are necessities not nice-to-haves, has arrived in mainstream business consciousness. In some sectors, it’s a basic criteria of RFPs.

The irony is that purpose does not have to be at the expense of profit; quite the opposite in fact. The 2018 EY Global Leadership Forecast suggests that purpose-led companies outperform the stockmarket by 42%. A sense of purpose also generates more ideas, contributing to an overall improvement in innovation.

Cue the rush for the ‘purpose’ label to sure up the balance sheet. But there’s no shortcut to being genuine: it does matter that a brand acts on the values that it purports to align with, whether this is purpose or any other value. Consumers, employees and suppliers are savvy; they have access to more information than ever before and they vote with their feet, wallets and publicly shared reviews.

The 2019 Edelman Trust Barometer reported reduced consumer trust in brands and increased expectations of brands’ social responsibility. Brand trust is one of the top factors in purchasing decisions, and Edelman report that more than half of consumers say they are able to spot ‘trust washing’, a term to describe when companies are less than honest.

The journey to being truly purpose-led

Analytics firm, Gallup, suggests there is still much work to be done in making purpose real: in a study of the pillars that make up an organisation’s identity – purpose, brand and culture – they found discrepancy between what a company desired its purpose to be and the brand and culture their employees create through their actions. The commitment to purpose also has a significant impact on a company’s ability to deliver on its brand promise, and by extension to create competitive advantage: where the promise and behaviour are aligned, share of wallet is up to 47% higher. EY also identified what they term the ‘say-do’ gap between promise and experience.

Broader contribution to society and sustainability are necessities not nice-to-haves.

So, what’s the advice on bridging this gap?

  • Lead from the top

Becoming a purpose-led business must be actioned by its leaders and obvious from a change in approach to all aspects of business – recruitment, rewards, innovation, processes, reinvestment of profits, to name just a few – to be believed. The EY Beacon Institute advises being wary of the overconfidence bias where leaders view their organisation’s commitment to purpose far more optimistically than their employees.

  • Employee engagement

Organisations that purport to being purpose-led find it easier to attract talent; the harder part is engaging them effectively but it’s worthwhile: a PwC study of purpose in the workplace found that millennials are 5.3x more likely to stay if they have a strong sense of connection to their employer’s purpose. Thought and communication in explaining how the organisation’s broader purpose relates to each employee’s role and empowering action are key; for some this comes in the form of their employee value proposition. It can be as simple as sharing employee stories and customer feedback – the point is to create a working environment where employees derive meaning from their work.

  • Measurement and accountability

There must be accountability in any statement of purpose. Wanting to make customers happy is all very well and good but without accompanying detail, it’s hard to understand what progress towards such a goal looks like. Well-known brands such as Patagonia are clear about their commitment to sustainability, supporting environmental initiatives and being transparent about their supply chain, even going so far as to discourage customers from buying their products in favour of repairing or recycling its products. Others have explicitly stated broader purposes; The Body Shop’s motto is “enrich, not exploit”, a statement which it clearly links to its people, products and the planet.


The suggestion is not that growth and profits can’t or shouldn’t be a core business focus, but in an ideal world, social and environmental responsibility would be an integral part. We all need a reminder to move in this direction as well as an acceptance that it will likely take a little time to get 100% right. But in the meantime, here’s to more action, less hyperbole.

where next….

Brand advocates: the missed opportunity in building brand awareness>