"Maximum growth and high ideals are not incompatible. They’re inseparable."
“What do the world’s 50 best brands have in common?” wondered Jim Stengel (then the global marketing officer of Procter & Gamble). He set out to answer this question by performing a 10 year growth study of 50,000 brands. The study tracked the connection over a 10 year period between financial performance and customer engagement, loyalty, and advocacy.
He zoomed in on the top 50 brands now referred to as “The Stengel 50”. If you had invested in these brands over the last 10 years, you would have been 400 percent more profitable than if you had invested in the Standard & Poor’s (S&P) 500! So what’s the secret? What did the top 50 do differently?
Stengel discovered that the most profitable brands focus on their brand ideal. In other words, they focus on their higher order benefit to the world. Jim summarized it simply by saying “Great businesses have great ideals.”
What a relief! He offers proof that corporations outperform their competitors by doing good!
What exactly is an ideal and how do you achieve growth through this ideal? This summary shares an abridged version of Stengel’s explanation of an ideal and the 5 must-dos to achieve growth with your ideal. We also zoom in on just one must-do: the need to communicate your ideal to engage people internally and externally.
The Big Idea
The Ideal Factor – What is it?
"…align your business with a fundamental human ideal, you can achieve extraordinary growth…."
Stengel’s notion of an ‘ideal’ is turning up more and more these days, building on the great lessons from Simon Sinek (Start With Why and Leaders Eat Last), Adam Grant (Give and Take), Bruce Poon Tip (Looptail), David Novak (Taking People With You) and Jon Gordon (The Carpenter).
So, what is a ‘brand ideal’? Stengel describes it as:
- A brand’s essential reason for being, the higher-order benefit it brings the world.
- The factor connecting the core beliefs of the people inside a business with the values of the people they serve.
- Not social responsibility or altruism but a plan for profit and growth based on improving people’s lives.
Stengel argues that having a ‘brand ideal’ is:
- The key to unlock the code for twenty-first century business success.
- The only sustainable way to recruit, unite and motivate internal and external people.
- The most powerful lever to achieve a competitive advantage.
If I were to ask you “Why does your brand exist?” What would be your first response?
- To serve shareholders?
- To make a profit?
- To provide a service?
Those replies are pretty common but they will not drive your business to success the way a brand ideal will. They describe outcomes, not reasons why you exist.
Stengel assures us that every business in the world has a potential growth-driving ideal at its center.
I bet your company has a vision (where you want to go) and a strategy and even a statement of what you are trying to achieve. But have you activated this in terms of a life-improving idea? Think of it this way. Why does your business ultimately exist, beyond serving the shareholder? This is what will drive growth!
How does your brand benefit the world? Stengel identified five categories from which to choose;
- Eliciting joy – eg. Coca Cola, Mastercard, Moët & Chandon
- Enabling connection – eg. FedEx, Starbucks
- Inspiring exploration – eg. Amazon.com, Apple, Red Bull
- Evoking pride – eg. Hermes, Calvin Klein, L’Occitane
- Impacting society – eg. Sensodyne, Dove, Method
Bottom line: “If your business or brand is not serving an ideal in one of these five fields of fundamental human values you’re likely not positioned for significant growth.”
The ideal tree and 5 must-dos
"Beliefs and values are not tools; they shape your ability to use your tools."
So now that we know that ideals create growth, how do we activate them? Stengel uses a tree to explain. Much like a tree, brands are living things that have roots, they thrive with the right conditions, and they die without care.
Beneath the tree, feeding the root system are the people the brand serves. The root system is composed of the core beliefs of the brand and the values the brand shares with the people it serves. The trunk of the tree illustrates the brand’s points of difference and points of clarity. The five branches of the tree are fruit-bearing parts of a business. They are the five must-dos:
- Discover an ideal in one of five fields of fundamental human values.
- Build your culture around your ideal.
- Communicate your ideal to engage employees and customers.
- Deliver a near-ideal customer experience.
- Evaluate your progress and people against your ideal.
"We all want to be a part of something bigger than ourselves…"
Let’s take just one of the must-dos from above: “Communicate your ideal”.
Do you jump out of bed each day – excited about the contribution you are going to make? Do your people?
It starts with your leadership. Leaders of the fastest-growing businesses in the world have relationships to their businesses not primarily as operators but rather artists whose medium is an ideal.
I have sat through too many sales presentations from senior leaders who project numbers and market share growth targets. The people are left less than motivated and the leaders wonder why. Imagine a VP on the stage announcing: “Next year our goal is to see a 4 percent growth in market share!” (Yawn.)
I work in the pharmaceutical industry and love seeing the difference in the audience when a VP says instead: “Next year our goal is to help 10,000 more people who are suffering from this debilitating condition.”
And this is the beginning of many small but important changes in communication. How leadership talks internally resonates outwardly. Simple adjustments in how people communicate have incredible repercussions.
Working in the pharmaceutical industry where we make life-changing, life-saving drugs I was surprised and dismayed to see that there wasn’t one pharma company in the top 50. It seems so obvious that we should be focusing on the benefit we bring to the world. Yet, our trustworthiness is at an all-time low. Perhaps it’s time to shift our thinking.
My vision is of a world where pharma professionals are an integral part of the health care team. A world where they are respected for the life saving and life changing medicines that they create and trusted for the knowledge they contribute. A world where social good and corporate good are aligned. A world where pharma believes that when patients come first, everyone wins.
Stengel provides solid evidence that this vision can come true. We just need leaders in our industry to realize that profitability results from doing the right thing – focusing on the patient in how we think, feel and act. This is indeed the true path to a sustainable cycle of business success.
What is your brand ideal and how do you communicate it?