The Point in Purpose

posted in: Business/Marketing | 0

I went into the twitter-sphere this week to question the claimed purpose of a very large Telcomms company. Let’s call them Megaphone. It was in response to a nauseating tweet from the head of their ad agency who was telling the world how proud he was of his client’s commitment to purpose. I’m a customer of Megaphone and it seems to me their only purpose is to make as much money as they can with as little regard for customers as possible. I’ve also had dealings with them in the past from the agency side and they were brutes. I suppose leopards can change their spots and maybe they’re trying. I’ve just visited their web site where sure enough you find their purpose front and centre and it reads very well. It talks about connectivity and the social good it can do and I admit, it struck a chord with me. Access to affordable mobile data can level the playing field for the poorest, it can enable people to start and grow their small businesses, it can promote inclusiveness. But do I believe that is the purpose of Megaphone? Do I think the ad agency CEO is really proud of them for this? No, I don’t. I think they’ve jumped on the purpose bandwagon and somebody has told them this is the kind of purpose that will sound great. It could well be someone in the ad agency and they’re licking their lips at the prospect of how much money Megaphone will spend telling people about their higher purpose. The CEO’s tweet was promoting a conference they were hosting about “Purpose” and I guess the CEO thinks the Megaphone case study will be a crowd puller and the ad agency will be seen as thought leaders in the purpose game. Because make no mistake, purpose is hot. It was hot before Covid, it’s even hotter now – hell, even I’ve jumped on the bandwagon (see my article on Neo-naked Economics, I’m all over it).

If I’m wrong then I apologise both to Megaphone (who you can probably figure out) and the CEO of their ad agency (which won’t be much harder). But here’s why I don’t think I am.

Purpose has to be 100% authentic, it really has to be the reason you do everything you do. It has to guide your every decision and action. If it does, you don’t need to tell anyone, it’s obvious. I was talking to the CEO of one of the world’s largest multi-nationals recently, a business with a very good record in sustainability and purpose, and he made the point that you have to be driven by this for years before you earn the right talk about it. I suspect you never brag about it unless of course you are into virtue-signalling.

Let me put it another way. Do you love your partner? Is this because you thought about it and decided you needed to love someone so you gave some further thought as to the kind of person that should be? Having made your choice have you communicated that to anyone? Have you pitched up at a meeting or a party and said to people, “You need to know I love my partner and here’s why”. Have you felt the need to attend a conference on Love to use your love of your partner as a case study? Does your partner believe you love them a) because you tell them and everyone you meet or b) because of the way you consistently treat them even when no-one is looking?

You have a purpose, you don’t get a purpose. And that purpose is the compass by which you navigate, it’s how you run the business, not the punchline in a communication strategy. It’s fine to have a purpose that is primarily about making superior shareholder returns but if it is, there’s no point in pretending otherwise.

Lock-down will prove behaviour shapes attitudes

In the eBook section of this site there is truly excellent contribution from the Herdmeister, Mark Earls on strategy and people. In it he reminds us that behaviour determines attitudes more often than attitudes drive behaviour. This is a crucial point and explains why a great deal of strategy, change management and marketing fails to deliver. Because most of us think that in order to get people to change what they do you have to appeal to their hearts and minds, you have to use persuasion. But however persuasive you are it is enormously difficult to get people to change what they do. The most reliable way is to make it impossible for them to do what they normally do. To replace one system with a new system. It took folks older than me a long time to use emails, it’s taken me a long time to convert to whatsapp. I’ve only done so because I was finding I just couldn’t get some people to respond if I didn’t. Now I love it (although I still love emails and even the occasional letter.) Let’s move it to the ‘workplace’. It was a revolution in Business Change Management when they ditched their old process:-

Communicate the need for change

Ask people to change what they do

Reinforce this with new processes and systems

100% the wrong way round. Introduce a new process or system so people have to change what they do. This changes their attitudes, then you explain why.

Now think about a whole bunch of things that some people knew all about, things they knew made sense, but even so were reluctant to convert. Unwilling to change their behaviour. “Oh, yes I know I should but….”

Video conference more and travel less

Cook more food, eat less processed food

Shop more on-line

Exercise more

This is a cliched list and I’m not arguing their merits nor denying that many people were way ahead of this before lockdown. But many will see the merits in some or all of these and will admit that prior to lock down they’d been luddites. Lock down forced the change, using the new platforms or systems reinforced the behaviour and has changed attitudes. Like Nike told us – we just did it.

If you have not read Mark Earls eBook do so, it might change what you think and do.

The seedy sleuths stealing YOUR data (and your money)

For most of us e-marketing/on-line/digital advertising, call it what you want, is irritating. Ads pop up and do their best to distract you from what you’re trying to read or do on-line. If you do a bit of research about something you might be thinking of buying, and most of us do, suddenly all those ads start to target what you were just thinking about. Helpful? No, spooky, pushy, like someone following you around a store and every time you look at something they get right in your face with the hard sell. Not a store you’d want to go back to, but on-line you don’t have a choice. You want the content, the social media platform, you accept the irritation.

Most people either don’t know or don’t want to think about how this actually works, what’s really going on. If they did they would be really angry and not enough people are which tells me it’s not been properly exposed. What’s happening is a bunch of companies like Equifax or Experian are literally stalking you on-line. Without your knowledge and in reality without your permission (unless you think hitting the ‘I agree’ button equates to cognizant, informed permission) they watch where you go, where you linger, what you click and like some low-rent private investigator they package up your personal information and sell it to someone who intends to flog you something or to some credit agency who will sit in judgement on you.  You don’t know what they know about you, you don’t know who they’ve sold your data to or when or how it’s used. They make a lot of money doing this, Equifax have a market cap of $21 billion, and they keep it all to themselves. You get nothing, just ads.

And if you looked at the Cambridge Analytica scandal, you’d realise it’s gone beyond irritation, beyond just greed, your data is being used to undermine your most fundamental freedoms, the freedom of thought. The thousands upon thousands of bits of data about you are manipulated using algorithms and AI to influence not just what you buy but how you vote. They’re used to manipulate what you think.

It’s bad now and it will only get worse – you’re generating more and more data about yourself and the technology is getting better and better at using it.

But we – if enough of us acted – could not just stop this if we wanted to, we could earn an estimated $7,600 per year on average. The higher nett worth could earn a lot more, the lower income less but probably enough to make a real difference. If the technology and the platform existed to enable us to transact our data direct to the organizations willing to pay for it (with restrictions on how they use and safeguard it) we could put the equifax and Experian’s of this world out of business. We could force the social media platforms to find a different business model other than digital snitching. We would take away a lot of the ad agency revenue and force them to get back to ‘truth well told’ based on ideas.

Well guess what, the technology does exist. It’s Block Chain. And there is one platform, Datawallet, using it to give people the chance to make money from their own data. There are limitations, issues to be resolved as this excellent article in Investopedia outlines. Please read it.

This is what I was writing about in my eBook ‘What’s wrong with marketing(?)’. People owning their personal data with the power to transact it will transform marketing and improve society. It will get rid of the greedy, seedy sleuths (pimps) in the digital shadows.

Value Signalling

In my article ‘Neo-Naked Economics’ (under EBooks) I set out a new economic model based on social purpose from which would come a new kind of marketing I define as purposeful value creation. (In the 30 years since I co-founded a marketing agency called ‘The Added Value Company’ it would appear that I’ve progressed from seeing marketing as adding value to creating value, subtle difference). In the article I had to skate over some big topics and I intend to use the blogs to expand on some of them. The core of the new value-based economics/marketing would be to let people ascribe all the value a product/service/business offers, not just intrinsic value, not just extrinsic value to the buyer but social value. And businesses would be required to carry their full costs, not just variable, not just fixed but social costs as well.

So how can you ascribe social value? It might sound hard but it really isn’t. It’s done all the time. There is the Kitemark, started in the UK but now operating in 193 counties. It uses a range of things to assess the safety of a product. Michelin Stars are awarded to restaurants according to how they measure up to a wide range of things not just how tasty the food is (you can lose a star if the wine cellar is too limited or if your loos aren’t up to scratch). In South Africa they calculate BEE (Black Economic Empowerment) scores based on a complex list of criteria, and the score has consequences for how you do business. Above a certain size a poor score will exclude you from doing business with government and a good score can give you an advantage in winning private sector business. We measure complex things and ascribe aggregate scores all the time.

There are only two challenges. Firstly, what do you measure? In the article I set out 5 social purposes for economics, just my point of view but I think the list would be well received by most people who care about society. For a business you could take that list to look at their performance against some desired outcomes that benefit society – diversity, equality of opportunity, conservation etc. The second challenge is the tough one – who makes the adjudication? For the Kitemark it’s the BSI (British Standards Institution), for the Michelin Stars it is a group of inspectors whose identity is kept secret, for BEE in South Africa it is a government department. Who would ascribe social value? It could be a government department, an independent global institution, it could include a people’s panel or board of governors.

Larry Fink, CEO of BlackRock Investment believes “society is demanding that companies, both private and public, serve a social purpose” something he put in a letter to all the CEO’s of the companies in which BlackRock have an investment. He thinks this can be measured and intends to do so.

How easy would it be for people to just look for the social stars when purchasing? It could have one star or five stars. And people wishing to make a difference could try wherever possible to buy from companies with the most stars, all other things being nearly equal. I say nearly because some people would trade some part of intrinsic/extrinsic value for more social value.

There is a lot of virtue signalling going on – why not value signalling?

Why Oh Why?

posted in: Business/Marketing | 0

I’m doing some work on leadership at the moment – as a marketer I work on the principle that you don’t need to be good at something to be able to express a view – and I came across a TED talk from Simon Sinek

It was posted in 2009 so I would imagine many of you (maybe even both of you) have already seen the video but I am quite taken with it. It offers an important message not just to leaders but to brands – people buy why you do what you do, not just what you do or how you do it. Or put another way, it is your beliefs and motivations that inspire a following.

Making a profit is a result but it cannot be your prime motivation if you are looking for loyalty and commitment. He has a very simple model based on what, how, why. People or companies know what they do and most know how they do it but only leaders are clear about why and unlike the rest of us that is where they start. “This is what I believe – what I do and how I do it are the proof”.

He explains that this is based not just on insight but science, how the big bit of the brain works – the Behavioral Economists will understand all this. But even without the science it just makes sense. I have also been doing a lot of work on the Craft Movement in drinks. People know what the big drinks brands do and often how they do it, but they don’t know why (other than making a profit). With Craft beers you know exactly why and that explains their growing following.

And on the subject of craft – you’re going to love this link – I spotted in the press the speculation about Kraft being bought up by Brazilian Private Equity firm 3G. It was Kraft who bought Cadbury and then span it off into a separate company, Mondelez, together with Toblerone and Oreo cookies. 3G together with Warren Buffet bought Heinz and are rumoured to be sniffing around Campbell’s.

I would imagine all these well known brands can articulate what they do and how they do it, whoever owns them. But it must be awfully hard to offer any reason why they do it other than to make money. In fact I would imagine that if you went to the board of any of these companies and suggested that in order to inspire more followers (sell more stuff) it would be a good idea to identify the motivation, the beliefs, the ideals behind the brands and to put these ahead of this year’s profit objective you might find yourself out of a job.

The main guy behind 3G is Jorge Paulo Lemann. He is the same guy behind the creation of ABI, the people who brew Stella Artois and Budweiser. He is clearly a very smart businessman and as a result is wealthier than many medium size nations. I can’t imagine he would care what I think but Jorge, if you get to hear about this, I’d pose you one question.

You are getting your butt kicked by Craft beers (15% of the USA market by volume, 25% by value and still growing). What are you going to do about it?

What ABI, and indeed SABMiller, are actually doing is buying up the more successful Craft Brewers. I wonder whether this strategy will work? You buy the ‘how and what’ but lose the ‘why’. Perhaps I’m wrong – Ben and Jerry’s and then Innocent both sold out and the brands still do well I’m told.

But can you be a leader of a big business that in large measure is publically owned and put your faith in idealism – ideals and beliefs that trump pure profit? Simon Sinek uses Apple as one of his examples in the video but back in 2009 Steve Jobs was still in charge. Now there was an inspiring leader who knew why he did it, not just how and what.

Can you be a politician and win power with your ideology in tact? Well some might say Thatcher did. You may not have agreed with her – I didn’t at the time – but she was clearly motivated by beliefs and succeeded in inspiring first the grey suits of the Tory party and then the electorate. So did Churchill for that matter.

But can you be a brand manager working in a big multinational and put the “why” at the heart of your marketing? Depends what kind of leader you are.

And that is what I have always believed – to be a great brand manager you have to be a great leader, so it’s worth paying attention to this leadership stuff.