Grant Leboff: One of the things businesses struggle with, I think, is delivering a consistent customer experience, building a consistent brand in a world where there are so many different communication channels. How does a purpose fit into that and help a business with those challenges?
Shuan Smith: Purpose can be incredibly powerful when it comes to aligning organisations. We have a phrase we call “loose-tight.” Many organisations are very tight when it comes to telling people what to do: the procedures, the policies, the guidelines. People are told what to do, but they’re very loose when it comes to “So what does our brand stand for? What’s our purpose? What kind of experience do you want to create for customers,” and then allowing people to use their judgement to deliver that. What we advocate is reversing those two things: being very tight when it comes to, “So what’s the brand, what do you we stand for, what kind of experience do we want to create for our customers,” and then allowing a bit more flexibility, a bit of looseness, if you will, in terms of how people deliver that.
There’s a wonderful story from some years ago from Virgin Atlantic. In the days before we had seat-back entertainment on aircraft, do you remember the old drop-down screens, and they’d show the main movie? One thing that Virgin Atlantic did … it’s always been very innovative … was to say, “Wouldn’t it be cool if, during the movie, during the intermission, to have a stewardess come around with the ice creams like you do in the cinema?” Now, logistically, it was very difficult. It was very difficult to freeze and keep frozen ice creams onboard an airplane, but they overcame that, and so they were the first ones to do it. They have the flight attendant come around in between the movies with the ice creams, and there was one particular flight attendant who became famous, because she would smear ice cream all over her face in the galley, and she would walk out into the cabin, and she would say, “Try these ice creams. I’ve been told they’re really, really good,” and of course people would be laughing and so on.
The point of that story is it’s so on brand for Virgin. It’s about fun, and entertainment, and personality, but you couldn’t write a standard for that. You couldn’t write a guideline. You couldn’t say, “Before you take the ice cream out, smear it.” It just wouldn’t work. Because she knew about the brand so much, and she felt empowered to do that kind of thing, is the reason that she did it.
Grant Leboff: You’ve got these companies who’re defining a purpose, and then they can deliver that consistently. How does one define that? What are the types of purpose that a company would identify as, “That’s ours?”
Shuan Smith: If you look back over the last number of years now, there have been many, many books written about organisational vision, or mission, or purpose, call it what you will, using military metaphors. Sun Tzu and The Art of War, or The Leadership Secrets of Atilla the Hun. It’s always been about beating the competitors, and being number one, and it’s all been a bit aggressive and adversarial.
The question is do customers care whether you’re number one? I would argue they don’t. Do employees care? Probably not. Beating the competitors may make you feel good, but it doesn’t do much for your customers or the employees.
Even if you do become number one, even if you do beat the competitors, what then? What gets you out of bed in the morning? We think there are three types of purpose. The first is a commercial purpose, which is, quite simply being profitable. The second type of purpose is a social purpose, so doing the right thing for the environment. The third is a brand, or customer purpose, which is creating value for your customers.
Of course, there’s been a lot of work done over the last few years about needing to be green, and environmentally friendly, and all of that, and that’s fine. You have to do that to sustain long term, but that can’t be your primary purpose. Unless you’re a charity, of course, that can’t be your primary purpose.
If you look at the commercial purpose, the trouble is if you’re hell bent on making money, it can lead you to doing some pretty stupid things, as VW found out.
A good example of that was in 2012. Hurricane Sandy hit the eastern seaboard of the United States. It was a huge storm. Eight million people without power. A hundred and fifty seven people lost their lives. A tremendous event. In the midst of that storm, a brand by the name of American Apparel came out with an advertisement saying, “If you’re bored during the storm, come to us and you’ll get 20% off.” A 20% off sale. Very insensitive. Of course, social media went crazy, saying “How can they be so insensitive?”
During that same storm, to other brands did something different. Duracell loaded up trucks with mobile generators and went around the streets offering to recharge people’s cell phones so they could call their loved ones. Tide loaded up washer-dryers on trucks, went around the streets offering to give people a wash and dry of clothing, so they could change their clothing. Why did those two brands act in that way? The reason was that they’re both part of P&G, and A.G. Lafley, the chief executive of P&G, some years ago defined a purpose, which was essentially to help people in their everyday lives through using more P&G products and services. They had a very clear sense of purpose, and it’s that which drove that behavior.
I think, when you have that purpose, it causes people to behave in a way which is congruent with it. It also means that you can then think about the customer experience that you provide, and what kind of experience that’s going to be like. It also means that you can think about “What kind of people do we need in order to deliver that purpose,” so it aligns the whole organisation.
Grant Leboff: What does a company need to do to get to that purpose? If they haven’t got one already, are there any steps that you can say, “These are the things they need to think about in order to get to that place?”
Shuan Smith: The first is it has to be authentic and it has to be true. What you don’t want is an organisation to go away for an away day with the executive team, brainstorm, “Oh, here’s a great set of words! That’s going to be our purpose!” Even worse is when you go to your add agency and say, “By the way, can you do a little bit of copy writing for us and come up with a purpose?” That way lays disaster. It has to be rooted in who you truly are.
To that extent, when we do this kind of work, we start with what’s true. Who are those valuable customers that care about you, that give you their business? What is it that the perceive about your organisation that is true? What about the employees? What about the culture? What about the history of the organisation? Is there something there which tells us something about what that organisation stands for? In the midst of all that, you usually are then able to define or identify two or three core things which are true for that organisation in terms of the value they create, for both customers and also for employees. It’s then crafting those things. It’s perhaps coming up with two or three alternatives, and then testing them with the employees and customers, and then refining the words.
Of course, coming up with a purpose is one thing. You’ve then got to deliver it, so the next stage really is about saying “What does that mean for our people, our processes, our products? What does it mean in terms of where we invest? Where shouldn’t we invest?” Otherwise, it’s just words on paper.
There may be small changes to the spoken word in this transcript in order to facilitate the readability of the written English
