Brand purpose and purpose statement: a guide
Brand purpose is all the rage in corporate communication today, but what exactly is it?
If you want to skip all the definitions below, we can say that purpose is the 21st century interpretation of the mission statement, but with a much stronger emphasis on CSR.
(Brand) purpose is what organizations define as the reason for their existence, beyond making money. It is a response to a brand's moral and societal responsibilities. Often, this purpose is documented in a purpose statement.
Here's some definitions by people who thought long and hard about purpose:
- The Purposeful Company Report defines the purpose of an organization as “its reason for being".
- Bartlett and Ghoshal (1994) define purpose as “the statement of a company’s moral response to its broadly defined responsibilities, not an amoral plan for exploiting commercial opportunity.”
- Thakor and Quinn (2013) define it as “something that is perceived as producing a social benefit over and above the tangible pecuniary payoff that is shared by the principal and the agent.”
- Henderson and Van den Steen (2015) write that purpose is “a concrete goal or objective for the firm that reaches beyond profit maximization.”
- In their paper on the relationship between purpose and financial performance, Harvard researchers Gartenberg et al. adopt the broad view of purpose as "the meaning of a firm's work beyond quantitative measures of financial performance".
While adding more definitions to the mix is not particularly helpful, let's look at what these authors agree on:
- "Meaning". A brand purpose creates meaning for the members of an organization - a meaning that goes beyond being in business and making money. In other words: a brand purpose is a story that organizations tell about themselves - something it has in common with strategy.
- "Beyond profit". Of course organizations and business need to be financially healthy - but brand purpose needs to add a layer on top of that.
- "Social benefit"/ "response to responsibilities": these aspects are about how the organization sees itself as a citizen, hence the strong link to Corporate Social Responsibility or Corporate Citizenship.
- "Concrete": although the purpose is usually quite high level, it should aim to be concrete and move beyond the idea that the organization wants to create "a better world".
In the Purposeful Company report, the authors add that a brand purpose needs to exist on at least the following 4 dimensions:
- External: "purpose is a covenant with customers"
- Internal: "it is a reciprocal, human contract with employees"
- Societal: "mutuality of interest between society and firm"
- Moral: "a desire to contribute to human betterment"
One thing is clear: purpose is about storytelling, giving meaning to things. Also, it looks at the organization and its stakeholders as a whole, clearly puts purpose in the realm of corporate communication and reputation.
Financial benefits of purpose
Purpose sounds "soft". It has this in common with concepts like reputation. Business executives with a strong focus on the operational and financial side of things like to ask "what's in it for us" when confronted with reputation, CSR or reputation.
This is short-sighted and actually wrong. There is no trade-off when investing in reputation and purpose - on the contrary. There is ample research that shows the financial benefits of focusing on a good reputation, and the same goes for purpose - at least some types of purpose.
In their research, Gartenberg et al show that there are two types of purpose:
- Purpose as Family: "firms that are characterized by high camaraderie between workers"
- Purpose as Clarity: "firms that are characterized by high clarity from management"