Just a decade ago, there was hardly ever any talk about purpose or mission. When it did happen, it was probably about how to increase shareholder value. In 2023, however, there is a growing trend of brands seeking to become a purpose-driven company and an example to others. We look at big brands and how different examples of purpose can have a lot in common. What is branding? Towards the end of the article, we look at some branding examples.

What is branding?

Branding is all the activities involved in positioning, building, maintaining and developing a reputation or image of a product or service with a name and logo. The purpose is to give the product or service an identity with a focus on value creation. The main objective is to communicate the brand's reputation or image so that it is appealing or attracts the selected target group the brand is intended to reach.

How you can work with the company's purpose

Today, a company’s declaration that it has a purpose beyond profit is eagerly trumpeted in response to demands from employees for work that is meaningful; from customers for brands that inspire; and from society for companies to be responsible. This change is also driven by an increase in global uncertainty and volatility, which has significantly altered how companies see themselves and their future.

This change in attitude is also affected by the fact that we live in an increasingly insecure and vulnerable world. This has significantly changed how companies want to see themselves and how they want to be in the future.

"This change is also driven by an increase in global uncertainty and volatility, which has significantly altered how companies see themselves and their future."

The current disruptive environment is changing how people see their purpose and the value that it provides.

EY Beacon Institute recently asked 1470 business leaders to what extent their organisation’s purpose had changed as a result of the disruptive word they lived in. Two-thirds of the executives (66%) said they were profoundly rethinking their purpose as a result of disruption. 73% of the business leaders said that having a well-integrated purpose would help their company navigate through disruption.

In one of our previous articles, I stressed that a well-defined purpose not only explains why you do what you do, it is also a statement of intent that keeps managers in check and gives them a reference when making important decisions. This became clear when the Business Round Table in August this year put forward the message that every company should have a purpose. With a purpose, management will have a guideline to steer by, not just for investors, but for all audiences.

Purpose acts as a corporate compass

Purpose is your corporate compass that helps your business avoid knee-jerk reactions to short-term opportunity and keep the business entity on track. Also Businesses need a compass to know where they are headed. That compass is the purpose, and it has started to become evident which brands have one and which do not.

Angela Ahrendts, former CEO of Burberry and now SVP of Apple Retail says:

“There is always this balance between hard and soft strategies, investment and intuition, but if you have a greater purpose, it becomes relatively easy to make those choices”.

Although the concept of purpose is not new, our research from The Mission Purpose Report showed that only 30% of Norwegian companies adhere to a purpose.

Furthermore, our research pointed out that purpose sets businesses on a more valuable course for creating a strong brand. Purpose provides focus, unites culture, motivates, differentiates and creates an emotional connection with stakeholders.

In Norway, however, many businesses are unaware of the power of purpose . There are many successful enterprises in which the purpose is no more than a confection, providing a little boost to morale when needed, but only peripheral to the central dynamic of maximising profit or pursuing some other kind of tangible success.

Not sure if you have a unique market position? Read more about positioning strategy.

Read on and find out:

What is a purposeful brand
Why having a purpose doesn’t necessarily make your company purposeful
Why an expansive definition of purpose creates most value.

Not all purposes are created equal. For many businesses it's about serving a single stakeholder group, such as shareholders, employees or customers. A purposeful brand is a brand that defines purpose as something greater: a human-centred, socially-engaged conception of purpose that seeks to create value for a broad set of stakeholders.

What does IKEA, Google and Spotify have in common?

IKEA, Google and Spotify are three good examples of brands that are driven by a strong purpose. What characterises these and other brands with a strong purpose is that people associate them with one or more of the five factors below.

I believe that these factors are the building blocks of purposeful brands. Each of them is made up of several associations that consumers have with brands. Two of the factors – trust and responsibility – reflects the brand's history. The other three – new thinking, visionary and future-proof – capture what people think their future will look like.

Five things that characterise purposeful brands

The brand is trustworthy
The brand acts in a responsible and ethical way
The brand is innovative
The brand is visionary and has a bigger idea for the future
The brand is relevant for the future

Why IKEA, Google and Spotify got it right

IKEA = trustworthy , annual surveys have shown again and again that IKEA historically is “teflon clean” when it comes to customer satisfaction and meeting customer expectations. But contrary to popular belief IKEA did not invent meatballs!

Google = visionary , CEO Larry Page has become synonymous with the term “moonshot”, (solving big, radical problems). His ambitions for Google are seemingly pulled from the pages of science fiction: Robots, drones, self-driving cars... the list could go on, let’s end it by mentioning Calico; a company from Google takling aging by focusing on health and well-being, in particular the challenges associated to diseases and old age.

His ambitions for Alphabet are apparently drawn from science fiction: from robots, drones and driverless cars to the voice-controlled online glasses Google Glass, the balloon-based internet service Project Loon and not least Calico, which is a life extension project.

Spotify = innovative. Previously referred to by Fast Company as one of the world's most innovative companies, Spotify has been a leader in music services, and has developed the concept further. It has added algorithms that create smart playlists to produce listening patterns that the company can use to identify artists' superfans and charm musicians into appreciating Spotify and using the service as a promotional tool.

IKEA, Google and Spotify are brands that stand for something

They have a clear sense of who they are and WHY they exist . They stand for something beyond making a profit. They are different to competitors in some meaningful way that creates value for customers. They are intentional in delivering their purpose via their customer experience across multiple channels. And finally they stand firm, they create cultures that sustain them and continually innovate to stay ahead.

There are many reasons why being purposeful helps a company or brand better navigate today's economy. Serving all stakeholders, and aspiring to improve society, gives a company a broader vision - a bigger game to play - making it more likely to spot the unexpected opportunities and new risks that are symptomatic of disruptive times.

Brands that live by their purpose become movement leaders

Today’s leading companies also know that focusing on the well-being of their employees is a key part of the purpose of a 21st century business. At Mission , we believe that this type of leadership creates business opportunities and future growth.

"It's not having a stated purpose that is the purpose of your company."

Having a purpose is important, but how you derive value from it and how well integrated it is within your organisation are two key issues I want to focus on. In my article How purpose drives profit and performance in uncertain times , I emphasised some important points.

Here are a few more important points:

Our study shows that companies with a meaningful purpose stand out for both articulating a purpose and for making significant progress in driving this into their corporate DNA. In an age where organisations are being destabilised technologically, in an age with economic and political shifts, a commitment to becoming purposeful is not something management boards can afford to move to the back burner.

On the contrary, the imperatives become greater and more urgent. As the rapid pace of change makes it harder to foresee the future, a framework that provides meaning and long-term vision to empower the organisation to navigate the unknown becomes one of the most important strategic levers.

As change happens at an ever faster pace , it becomes more difficult to predict the future. Having a framework that makes sense and a long-term version that can strengthen the organization in a way that makes navigating the unknown can be an important strategic break.

An expansive definition of purpose creates most value

In a recent report from the EY Beacon Institute , they found that while there can be significant differences in a purpose's meaning from one company to the next, an expansive, human-centred, socially engaged definition of a Purpose seems to emerge.

Today’s most admired companies, increasingly, are those that have made purpose their motivating raison d’être. This broad understanding of a corporate purpose is now more widely held than other definitions, including bringing value to customers and benefitting employees, both of which also speak of a company with broader human-centric concerns than simply maximising shareholder value.

Both parts tell of a company that puts human considerations at the center rather than building everything around it an optimization of shareholders' profits.

Although the concept of purpose is not new, our research from The Mission Purpose Report show showed that only 30% of Norwegian companies adhere to a purpose. In our research we found that some industries seem more disposed than others to a broader definition of Purpose.

Companies from government and publicly owned industries most frequently claim a Purpose that seeks to create value for multiple stakeholders, while companies within the business to consumer industry most frequently cite an aspirational reason for being.

Nordic Choice Hotels is a brilliant example of a purposefull company with an expansive definition of purpose:

"With energy, courage and enthusiasm we create a better world. We care!"

The statement is compelling, inspirational and ambitious. But at the same time believable. The statement not only makes staff proud to work for such a business, it also works to attract customers and investors alike. Furthermore, their purpose is timeless and universal.

"Purposeful, human-centric organizations are playing a bigger game. They stand out by standing for something greater than themselves; transcending paradoxes of shareholder v. stakeholder, efficiency v. experiences, profits v. purpose."
- Valerie Keller, Thrive Global Editor at Large, University of Oxford Associate Fellow

Purposeful companies outperform the rest

Research from EY Beacon Institute showed that executives from different industries say that their pursuit of purpose delivers the greatest value in areas that arguably are most critical to them.

Those in the life sciences and diversified industrial products industries, for example, state that purpose drives value by helping to develop innovative new products. Consumer products organisations see purpose as most fundamental in building greater customer loyalty.

Together, these factors highlight why executives at purposeful companies find that their pursuit of Purpose is not a costly distraction but a value creator, with clear benefits for the bottom line.

Purpose = profit = value is a correlation hard to ignore, demonstrating that there’s more to defining purpose than simply good intentions, and this resonates well with our own results from the Mission Purpose Report, which showed that companies who demonstrate a core purpose have a 41.8% greater profit than those without.

Done in the right way, finding the right purpose will provide better performance and higher profits.

Done well, pursuing purpose means better performance and higher profits. For business leaders looking for the best way to survive and thrive in the face of today's forces of disruption, the message is clear: begin your purpose journey without delay.

Further reading:

"Why a meaningful purpose engages investors"