Markus Kramer discusses how companies can find their purpose and implement it throughout their organization.
Markus Kramer is the Managing Partner of Swiss brand strategy and communications agency Brand Affairs. Earlier he worked in-house for Aston Martin and Harley-Davidson. Markus is also an associate professor of brand management at Cass Business School in London, UK.
For years, even before it became fashionable to do so, Markus has been advising clients on how they can best embed purpose in their organizations. In 2017, he wrote together with Tofig Husein-zadeh, The Guiding Purpose Strategy, a book in which he explains how every company can become purpose-driven.
I talked to Markus about where we stand with our current knowledge on how companies should best design and implement purpose, and how the CODIV19 pandemic will impact the current movement towards purpose.
Purpose as spiritual core
CSR is often just putting lipstick on a pig.
Jo: Purpose is at times used as a synonym for CSR, while the two are intrinsically different. Can you explain to us in clear terms what makes a purpose-driven organization different from a CSR-driven one?
Markus: CSR is often just putting lipstick on a pig. You have companies turning billions in revenue who then allocate a few millions to a CSR project in an emerging market. It’s good, but it’s not enough. Purpose is about much more than that. A purpose driven organization will prioritize embedding purpose into the connective tissue of its culture. Purpose becomes the spiritual core and the business gravitates around this notion. A classic and very good example of such an organization is Patagonia.
Jo: Where does the current focus on purpose come from?
Markus: If you go back one hundred to two hundred years, you see that people at that time emphasized leadership heavily. People asked themselves: Who should I follow? In the fifties, sixties and even seventies of the past century, the most pivotal question changed and became: Where do we go? What is the direction we need to take? This was tied to strategy. Today the question has morphed yet again into another concern and people now ask themselves: Why should I follow you? This is where the current quest for purpose comes from.
Once you have found that purpose, and you have embedded it in your company culture, you will have acquired for yourself a competitive advantage that you will be able to use to your advantage as an employer. Today and in the developed world, our basic needs are really mostly covered. So the strive and ambition to do what you do to cover your essential needs is becoming obsolete. Especially with younger generations who are looking for more than just a paycheck now, they are looking for meaning.
Discovering your purpose
Purpose is often hidden within an organization.
Jo: It is important to have a purpose, but where do you start designing it? And do you actually design it or is a purpose something that you discover?
Markus: Most of the time, your purpose is already there, just not in plain sight. It’s more like a diamond in the rough. Purpose is often hidden within an organization. In start-up companies, the notion of purpose is generally well understood, but not overtly expressed by the founder and his or her small team of collaborators. There is tacit knowledge of purpose in a start-up. As organizations mature, scale and become larger, less information on purpose is passed down.
So most of the time, I just help companies identify the purpose that was already there and make it explicit by articulating it. Together with my clients I look at their mission and the values they have identified as being crucial to who they are and from there we then articulate a purpose. There is a rational and emotional component to purpose, so what we come up with needs to address both the heads and the hearts of people.
It goes without saying that in order to have the purpose connect with everybody in the organization, it needs to be articulated in a language that everybody understands. And a purpose does not only need to be communicated throughout the organization but also needs to be made an integral part of every single function of the organization. I am always very suspicious when I am being asked to counsel a marketing department on purpose. It is much more reassuring and generally transformational to see that request coming from the board.
Aligning employees with the corporate mission
Nothing is as hard to copy as culture.
Jo: What are the benefits of being purpose driven?
Markus: Purpose is most powerful when it is used to align employees with the mission of the organization. You then see purpose significantly increase employee engagement, and everything else then benefits from that increased engagement. Engaged employees are more efficient in what they do. They are more innovative and progressive and will go that extra mile when needed. It is an intrinsic motivator that money just can’t substitute in the long run.
Jo: So when you pitch your counsel on purpose to clients, you lead with the alignment of employees?
Markus: Not directly. Especially for boards, even when it is strictly speaking correct, that’s too soft of an argument. I tell them that I will help strengthen their cultures through the alignment of employees. The latter is a means to accomplish the first. Nothing beats the differentiation that company cultures can provide because nothing is as hard to copy as culture. So culture is and will always be a very sustainable factor to the success of organizations.
Jo: Few are impressed with the culture within Amazon, still we seem to be unable to stop doing our shopping at Amazon. Is the Amazon case proof that customers don’t care much about purpose?
Markus: Well, like I said, purpose works mostly on the side of employers aligning their employees with their mission. It is not so much a story of convincing consumers if they are buying goods or services for which they are price-conscious, and we know consumers are price-conscious for most products or services they buy.
Companies such as Amazon are algorithm driven. The service you get from Amazon is not that different whether the Amazon employee is happy or not to be part of Amazon. So the client servicing will not suffer that much from a lack of alignment. Things are different however when you are talking about business models where the people are the ones doing all the work, for example in professional services. That is why so many professional service firms such as PWC are investing heavily in embedding purpose in their organizations. You really do not want to be served by an unmotivated consultant.
Jo: Does it actually make a lot of sense introducing purpose at the product / service level the way Unilever has done where every product brand has its own purpose?
Markus: Well, to be honest, I don’t see the big advantage of that. Purpose is mostly about aligning employees with the mission and values of the employer. Somebody who goes to work for Unilever will end up moving around in Unilever, working for different brands. That person needs to internalize a purpose that is applicable throughout his or her career at Unilever, and not just while working on Lipton Ice Tea.
Jo: What company stands out in applying purpose in a B2B context?
Markus: I already mentioned PWC does a great job instilling purpose in its company culture. Givaudan is a Swiss company that can also serve as as a good example. They are in the business of flavors and flagrances and are doing an excellent job at building and articulating an employer value proposition built on purpose.
Accelerated momentum for purpose
Jo: What do you expect will be the impact of the Corona virus crisis on the quest for purpose?
Markus: It will most definitely accelerate the momentum for purpose. If there is one silver lining to this crisis in which we find ourselves, it is that people have now become more conscious of what is happening around them. They are reminded of the essential values of life. That purpose can come before profit. For example, people notice how the earth is catching a second breath, now that pollution is down, that it’s painful not being able to visit loved ones, that time has intrinsic and humanistic value.
We will look back at this crisis in 10 years from now and see that a great shake-out took place, where the companies that had strong cultures were more resilient. It will not be technology that will have helped companies weather the hard times. It will have been culture.
I believe that we’ll be back to normal and beyond very soon. As a species, we continue our collective progress towards betterment for anyone and everywhere. Embedding purpose at the heart of economic value propositions can contribute to this in a meaningful way – and I think we’ll see more of it.
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