The true owners of purpose are not-for-profits
Defining a purpose has been one of the most recent trends in branding, but there’s plenty of debate about its validity for consumer brands for which, let’s be honest, the primary purpose is to make money for their owners.
University of Adelaide Professor of Marketing Science, Byron Sharp, recently warned in the UK’s Marketing Week that: “Marketers are afflicted by a lack of self-confidence and pride, and one of the main symptoms to have arisen from this is the idea brands should have a higher societal purpose beyond profit.”
He warned that the widespread adoption of social purpose could lead to brands becoming too similar and consequently being picked off by private labels.
Call me a cynic, but I have always been suspicious of commercial brands that head down this road, although I’ve been involved in many discussions and workshops trying to define brand purpose.
In fact, some commercial entities and brands have been built entirely around a purpose narrative. Some pay homage to it by carving a proportion of revenue or profit to various causes. More nakedly transparent commercial leveraging of social good is seen in cause-related campaigns that do this without any expression of purpose at all.
Professor Sharp’s criticism of brand purpose draws from concern about its potentially existential impact on brands, arguing that purpose can easily be duplicated by private labels typically offered by major retailers diluting brand differentiation and/or distinctiveness.
Some like effectiveness consultant, Peter Field, advocate for purpose and say: “well-executed purpose campaigns deliver superior effectiveness on a number of key business measures.” Peter Field proposes that an holistic view of purpose should embrace the positive impacts on employee, supply chain and investor relationships.
His view is really talking about organisational alignment with its expressed purpose. His view is consistent with the truth that a brand derives from within and is a reflection and projection of the organisation’s beliefs, values and behaviours.
Which brings me back to the headline statement for this article.
Purpose is much better suited to not-for-profit organisations. These are literally purpose-built, founded on a very specific and focused set of outcomes, be they social, environmental or other.
Non-Government Organisations (NGOs) are typically the organisations we think about when we hear the term not-for-profit. Organisations like the Red Cross, World Vision, Medicins san Frontier are some that are top of mind and have defined our concept of what a not-for-profit organisation does.
Their biggest battle is not with their purpose, but with building the resources necessary to deliver their vision as defined by their purpose. Those just mentioned are long-established and well resourced but, for tens of thousands of others toiling to support a cause or resolve a social issue, their existence is hand to mouth, always dependent on success in the next round of government grants or the empathy of a philanthropist.
Not matter where they sit on the resourcing spectrum, alignment for not-for-profit organisations usually comes organically. It just is. They recruit people, many of them volunteers and those who are salaried receiving much lower pecuniary reward than their commercial counterparts. Many are just as talented. These are people who fundamentally buy into their organisational goals, even before signing up, ensuring internal alignment and loyalty to organisational purpose and values.
They are also aligned with the communities they serve, which are also the beneficiaries of their work.
In the not-for-profit sectors in which I have been and am involved, defining a purpose is not the outcome of immersive gatherings facilitated by specialist consultants armed with coloured sticky notes. Purpose is understood by an natural osmosis of shared belief and experience, although articulating it usually involves quite a bit of herding and coaching.
This is not to suggest that the manner and integrity with which commercial enterprises promote their brands do not reflect their values and behaviours. The trend to doing business with a social dividend has ramped up over time - the ever-diversifying social enterprise, thankyou, the toilet paper makers, who gives a crap and others come to mind.
Social enterprises like these have a distinct advantage over long-established incumbents. They identify a cause and create what are essentially not-for-profit enterprises to fund it. thankyou is focused on eliminating poverty, who gives a crap on delivering sanitation to the many around the world who don’t enjoy the basics like health toilet amenities.
In contrast, incumbents established as commercial ventures struggle to effectively reverse engineer from a profit to a much broader social purpose. The attempts to do it and deliver true to that purpose almost inevitably will fail, as the transition to a higher social purpose has to overcome the dual challenge of a fundamental change to corporate values, but also leap the hurdle of consumer cynicism about motivation.
The long-running battle between not-for-profit and commercial superannuation funds in Australia ultimately resulted in a resounding success for the purpose-driven, member focused not-for-profit industry funds. Serving a single master, their members, always presented a much clearer and achievable path than the conflicted task of serving both customers and shareholders. The latter only compromised customer benefits and interests, as laid bare in the Hayne Royal Commission.
Internal and external alignment and perception of company purpose boosts the prospects of success, whatever that looks like, for any organisation or company, but that does not necessarily mean alignment with a greater social purpose. Simply delivering a high quality and trusted product or service to meet a customer need can be all that is required.
As Byron Sharp remarked, there is nothing to be apologetic about if you’re marketing soap with no higher social purpose other than to meet a market need. People need soap.
Not-for-profits are purpose-built to elevate and deliver on the hopes and aspirations of even those who cannot afford to pay for it. They will always own purpose.