purpose as a survival strategy in a shrinking economy
TRANSCRIPT
Simon MainwaringWe First@simonmainwaring
Purpose as a Survival Strategy in a Shrinking Economy
#SB16SD #ActivatingPurpose
Purpose As A Survival Strategy In A Shrinking Economy
3SimonMainwaring
First, the near future.
1. Market and economic corrections.
3. Brand vulnerabilities.
2. Consumer mindset.
1. MARKET AND ECONOMIC CORRECTIONS
1. MARKET AND ECONOMIC CORRECTIONS
©2016 We First Inc. 3
Predictions (WSJ) stock market, real estate, private sector, consumer spending
1. MARKET AND ECONOMIC CORRECTIONS
2. CONSUMER MINDSET 3. BRAND VULNERABILITIES
DISPOSABLE INCOME
BRAND LOYALTY
BRAND SCRUTINY
RELIANCE ON WORD OF MOUTH
REACH OF CONSUMER ACTIVISM
SALES & PROFITS
EMPLOYEE PRODUCTIVITY/SATISFACTION
PRESSURE ON BRAND REPUTATION
PRESSURE ON MARKETING
PRESSURE FROM COMPETITION ON PRICE AND AWARENESS/MINDSHARE
Havas Media, Meaningful Brands Report 20153
Most people would not care if 74% of all brands disappeared.
In a shrinking market, purpose is a rare growth opportunity.
EMPLOYEES
CUSTOMERS
CONSUMERS
MARKETINGCULTURE
PURPOSE
PUTTING PURPOSE TO WORK FOR YOU
EMPLOYEES
1. Define your purpose in simple and emotional terms.
2. Share your purpose throughout your organizations.
3. Give employees choices for how to bring that purpose to life.
ACTION STEPS
Purpose Increases Employee Loyalty & Tenure.
2015 Imperative & NYU Workforce Purpose Index
purpose-oriented workers at work 14
2015 Workforce Purpose Index • © Imperative
Purpose-Oriented Workers Have Longer Expected Tenure
Purpose-Oriented Workers expect to stay in organizations longer than their peers. Tenure is a critical mea-sure for the workforce as it relates to both the costs of turnover to employ-ers as well as job satisfaction.
Purpose-Oriented Workers Are More Likely to Be Leaders
Purpose-Oriented Workers were 55% more likely to hold Director positions, 39% more likely to hold Vice Presi-dent or C-Level positions, and 50% more likely to be in the top position in their organization. Even when controlling for other factors, Pur-pose-Oriented Workers were more likely to be in leadership roles than their peers.
% o
f Wo
rker
s W
ho E
xpec
t to
Sta
y Lo
nger
Tha
n 2
Year
s100%
75%
50%
25%
0%
Purpose Oriented
Non-Purpose Oriented
79%69%
Expected Tenure by Work Orientation
Purpose-Oriented Workers are 50% more likely to be in the top position in their organization.
Percenta e i erence et een Purpose riented and Non Purpose Oriented Workers by Occupational Level
Intern
P • eve xecutive
ntr eve •
ssociate
anaer •
r ana
er
Directo
r
President •
• ner
100%
75%
50%
25%
0%
20%
-25%
-15%
5%
55%39% 50%
Purpose-oriented workers expect to stay in organizations longer than peers, and 50% more likely to be in the top positions.
The Benefit of Purpose-Driven Employees.
2015 Imperative & NYU Workforce Purpose Index
Path of Service™
• Launched in 1992
• Provides full time employees up to 40 paid service hours per year
Case Study: Timberland
In 2014, Timberland employees worldwide served
72,098 hours
of employees reported serving at least once in 201478%
1. Create Opportunities2. Leverage Senior Leaders3. Recognize and Celebrate4. Foster Employee Ownership5. Tell Your Story
Timberland: Employee Engagement Roadmap
CUSTOMERS(B2B)
1. Share your purpose with your customers.
2. Establish values alignment to mitigate risk.
3. Give them a positive story to tell -leverage storytelling to strengthen both parties’ reputation.
ACTION STEPS
Purpose Increasingly Driving Reputation
Fig 5: The Changing Landscape of Reputation Driver Impact
The most notable developments in investor attention moving into 2016 was in their changing
interest in leadership qualities, underlying financial soundness, innovation and matters sus-
tainability and CSR. Uncertainty about the world economy and the pace of recovery at home
has refocussed attention on corporate leadership and financial robustness. It has also led to
a reduction in the importance attached to demonstrable innovation a traditional ‘recovery’
characteristic. Most significantly perhaps, the on-going rise of interest in social responsibility
points to increasing endorsement of its important to commercial success.
Reputation managers should aim to balance their communications and messaging in order to
secure and build at the same time. They need to view the circumstances of their own compa-
nies’ reputation assets through the lens of driver potential and value profile in order to establish
the messaging priorities that will deliver the greatest value impact on their market capitalisa-
tions. With that, reputation value management can be deployed in an increasingly effective
and economically impactful fashion.
Rela
tive
Drive
r Im
pact
Qua
lity o
f man
agem
ent
Fina
ncia
l sou
ndne
ss
Qua
lity o
f goo
ds &
ser
vice
s
Abilit
y to
attr
act t
alen
t
Long
term
inve
stm
ent
Cap
acity
to in
nova
te
Qua
lity o
f mar
ketin
g
Com
mun
ity &
env
resp
onsi
bilty
Use
of a
sset
s
8
2016 UK Reputation Dividend Report
CSR Represents 10.7% of the Value of S&P500 Companies
2015 UK Reputation Dividend Report
Reputations are critical corporate assets but the premiums they deliver cannot be taken for granted…and itappears this may have started to happen.
Securing the value of reputation assets is about playing to the components that matter most to investors
Securing reputation value is not a zero-sum game in which a pumped up asset is automatically more valuableand a deflated one less so. Different messages resonate within the investment community to different degreesat different times and need to be supported accordingly if the value they have delivered is to be maintained.
At the start of 2015, the single most valuable component of corporate reputations across the S&P 500 as awhole was perceptions of people management. Variances on that factor alone were making the greatest differ-ence as investors recognized that a company’s ability to win is increasingly dependent on its ability to attractthe talent it needs to operate. The second most valuable component is perceptions of management quality followed by long term investment potential. Individually, these factors account for $545bn, $483bn and $449bnof shareholder value across the index respectively.
Figure 4: Location of S&P 500 Reputation Value – the $3,329bn
Individual company reputations will present ‘risk profiles’ based upon unique strengths and weaknesses. Reputation managers need to be sensitive to that if they’re to be sure that their communications and messagingis directed towards the first ‘responsibility’, namely supporting the components of their reputation assets thatare contributing the most value balanced with the second, which is pursuing growth opportunities.
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Case Study: Woolmark
CONSUMERS(B2C)
1. Leverage purpose to create simple and emotional storytelling.
2. Consistently base storytelling on shared values.
3. Recognize and reward consumer participation.
ACTION STEPS
2016 Edelman Trust Barometer
80% agree
“An organization can take specific actions that both increase profits and
improve the economic and social conditions in the community where it
operates.”
up from 74% in 2015
Consumers expect companies to do more than make a profit.
Case Study: Whole Foods
MARKETING
1. Give consumers opportunities to co-own, co-author and co-create.
2. Engage mission-aligned influencers and ambassadors to increase reach/earned media.
3. Align ongoing tactics with a long-term purposeful strategy.
ACTION STEPS
2015 Cone Communications/Ebiquity Global CSR Study
Consumers want to participate in brands’ purpose in many ways.
Case Study: Patagonia
CULTURE
1. Transcend your products, services and culture to shape culture.
2. Define, frame and lead a cultural conversation.
3. Be a mission with a company, not a company with a mission.
ACTION STEPS
2015 ‘Fit for Purpose’ Report, Radley Yeldar
Case Study: Adidas
The result?
“Socially responsible brands accounted for half our growth in 2014 and grew at twice the rate of the rest of the business.”
Paul PolmanCEO Unilever 2015
2015 Driving Revenue Growth Through Sustainable Products and Services Report
“Between 2010 and 2013, revenues from company-
defined portfolios of sustainable products and services grew by 91%.”
For S&P Global 100 companies revenue stream grew at 6X the rate of overall company results.
Organizations that prioritize & integrate purpose
Organizations that do not prioritize & integrate purpose
Purpose drives growth.
2015 HBR The Business Case for Purpose Survey
EMPLOYEESProductivity
CUSTOMERSAlignment
CONSUMERSLoyalty
CULTURELeadership
PURPOSE
RESULTS…
MARKETINGAmplification
Strategic purpose drivessustainable profit.
