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Brand Purpose

10 Ways To Measure Brand Purpose


Brand Purpose Strategy

Metrics and big data are on everyone’s minds it seems these days – a symptom of the market’s continuing obsession with quants as measurement of proof, and indeed proof of measurement. The framework of financial measures (and acronyms) that dominated investor reporting has today been supplemented by a plethora of social measures intended to track every click, count every interaction and in the process derive sentiment and “truth” from every social engagement.

“Measure what matters because it matters what you measure”

Such a bewildering array of data points raises its own dilemmas of course, not the least of which is how to prioritize and balance all these insights and, at the same time, maintain an objective and effective view of progress against goals and strategies. It may seem strange, given this, that we propose measuring another aspect of commercial activity. The difference, and the challenge, is that we believe it is increasingly important for brands to find ways to assess the contributions of what has previously been unquantified.

There is good precedent. The concept of a “brand” being an asset, and a quantifiable asset for the balance sheet at that, has graduated from heresy to legitimacy. There are still those who question the methodology but overall there is a wider acceptance that some things we can’t touch, such as goodwill, have a prove-able commercial effect and value.

The contribution of Purpose to a culture and to a brand’s strategic focus has been gaining traction for some time. Deloitte’s Culture of Purpose 2013 Report, for example, identifies a strong sense of purpose as a strong and proven contributor to long term success. Their Report identifies cultures with purpose as having higher performing employees and generating strong financial performances. Other attributes include a distinct brand, clearly defined values, a rich belief system, greater customer satisfaction and better employee satisfaction. The findings endorse the thinking in John Kotter’s 2011 book Corporate Culture and Performance in which he directly correlated “high performing cultures” and financial performance.

So if the link between purpose and performance has been asserted, why is there a distinct lack of metrics and measurement in this area?

The definition of “Purpose” centers around it being an aspirational goal; something that remains just beyond reach and pushes and inspires people to strive to reach it. It would make sense therefore that the measures of success would relate directly to the progress being made towards that purpose. One of the key issues that we’ve identified is that purpose has traditionally been expressed as an aspiration for the business, and yet that aspiration has remained isolated from activity. The details that would quantify what will be achieved, when and how in the pursuit of that purpose have been lacking. So have the bottom line targets. In other words, the commercial impacts have been isolated from the purposeful impacts.

Much has been made of the calorific effect of purpose – of its ability to energize and focus. Quite rightly so. What’s needed now it seems to us is some way of converting the resulting outputs and impact into tangible benefits; of measuring the ‘organizational joules’ so to speak

If purpose can empower employees to be more effective, drive partners and vendors to be more collaborative and effective and drive disproportionate customer preference, loyalty and sales, doesn’t it behoove us all to make more of an effort to try to quantify its contribution?

No-one’s saying that’s easy. But, by way of a start point, a framework of questions might help. For example, Nike sees its purpose as being “To bring inspiration and innovation to every athlete in the world.” In order to quantify how the pursuit of that purpose boosts the bottom line (and therefore why that purpose is good for Nike’s business), the company might look to quantify the impact of inspiration, innovation and the number of athletes in the world on their bottom line.

10 questions that we can see might go some way towards doing that:

  1. What do we define as inspiration and what part do we play in that inspiration?
  2. How many inspiring products do we sell (and therefore who do we inspire and to do what)?
  3. What did those products cost to develop?
  4. What do we make from them?
  5. To what extent are we making money from products that continue to inspire vs those that are re-inspiring vs those that will inspire into the future?
  6. Are some athletes who use our products more inspired than others? Why?
  7. What innovations have we introduced in the last year for athletes?
  8. How many of them have we sold?
  9. What’s still in development and what are the projections for those products in the business case?
  10. How quickly is our innovation cycle and being realized in terms of saleable goods and what effect are those innovations having on our bottom-line?

Those are the immediate measures. At a macro level, Nike could also examine how the pursuit of their purpose affects their market share (as in the global market of athletes).

  1. To what extent did we inspire and innovate relative to Adidas, Puma and other competitors?
  2. Did we inspire more athletes than the previous year?
  3. Did we reach those athletes at a faster and more effective ($ per athlete) rate than our competitors?

We doubt that there will ever be one universally accepted measurement system for quantifying purpose because no two organizations have (or indeed should have) the same purposeful goal. Instead, organizations will need to tailor what they measure against what they strive for. There are some suggestions for how this might be done in a recent article in MIT Sloan Management Review. Companies who frame their purpose around how their customers will benefit might look to their Net Promoter Score. Those who are determined to achieve a Culture with Purpose might, as the authors suggest, reference employee engagement scores. Both are good ideas, but in themselves they do not correlate the pursuit of purpose with clear proof of positive commercial impact.

The question we keep asking is – How far can (and should) we take the measures of the influence that purpose is having out into the business? For example, if you’re IBM, the purpose-performance indicators for a smarter planet might be the number of new patents, the dollars being invested (and returned) in R&D and the levels of publishing you do as a thought leader. Perhaps compare those numbers as a percentage of EBITDA to the bottom line impact those initiatives have in order to quantify the extra levels of return being generated as a result of pursuing your purpose. Or compare your performance pre- and post- the commitment to a smarter planet. Or compare your own performance with organizations that do not have a Culture of Purpose in order to compare your performance against that of an organization that is not motivated this way. If the Deloitte findings are correct, there should be clear indications of higher than average future earnings.

If you’re Tony Hsieh at Zappos, indicators like staff churn, average tenure of customers, Net Promoter Scores and the numbers of repeat customers would help show how the pursuit of happiness is benefiting the business.

Measurement of purpose is certainly a work in progress, with the emphasis at this point anyway on the work. But ultimately if purpose is to be more widely embraced as a competitive force, those organizations that see it as an energizer of their people and their strategy must be able to demonstrate the rewards in order to justify the resources.

Co-authored with brand strategist Hilton Barbour.

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