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From marketing to truth: Communicating in the purpose era

Joan Ramon Vilamitjana

CEO

Hill + Knowlton

JoanRamon.Vilamitjana@hkstrategies.com

http://hkstrategies.es

 

 

 

We live in a time of constant change. Disruption and “exponentiality” are the order of the day. Gone is the post-industrial era, in which making the best product on the market was a guarantee of success; or times when access to information was a differentiating element. Today, the differences between products are minimal, and anyone in possession of a device with an internet connection has access to more information than they can ever process.

 

In this context, brands and companies are subject to an unprecedented level of scrutiny, and consumers demand to know not only what, but also how and why. So, having and communicating good performance is not enough. We have entered the Purpose Era: an era in which companies, in order to generate preference among its audiences, should align their business and communication strategies around a purpose, understood as the reason why a company exists, which goes beyond generating economic benefits and which defines its value for society. This purpose could be anything from making the world a happier place to responding to a basic human need.

 

Indra Noyi, CEO of PepsiCo, perfectly captures the essence of this philosophy: "When we articulated the notion of performance with purpose, people confused it with corporate responsibility. Incorrect. It's not about how we spend the money we generate; the focus is on how we generate that money. "

 

The purpose is not mere poetry or make-up, but lies at the heart of business strategy and has enormous implications throughout the company's value chain, from sourcing to culture and communication. It is a journey that does not begin with the question "how do we want to be perceived?" but rather with "how can we be better citizens and generate real value for society?".

                                               

One of the greatest exponents of this movement is Paul Polman, CEO of Unilever, who frames this macro-trend as a turning point in the capitalist system. In his words: "Capitalism has served us enormously well. However, its cost is becoming unacceptable: unsustainable levels of public debt, excessive consumerism, and too many people who have lagged behind. "At this point, brands and companies must consider what role they want to play in this scenario: be part of the problem or the solution. Polman – whose opinion I fully agree with – is firm in his remarks: "We must be part of the solution, and that means rethinking our long-term business model."

 

The value of purpose

 

While companies such as Unilever declare that their purpose-led brands like Dove or Ben & Jerry's show growth far superior to other brands in their portfolio, doubters still say it is not possible to establish a direct relationship between purpose and economic growth.

 

While it is true that a company's success cannot be attributed to a single factor, it is also true that alignment around a business purpose is an extremely complex process in which many variables come into play – from the definition of the purpose and its correct articulation, to its activation with different audiences. My opinion is that there are enough indicators to think that, beyond an opportunity for differentiation, we are facing a trend that will mark the future of the business world, and if we do well, the future of society as well.

 

There are many stories that inspire this movement, but certainly one of my favorites is that of the US pharmacy chain CVS, which in 2014 announced that it would stop selling tobacco in all its stores. The reason? It was not compatible with its purpose to accompany people on their way to full health. Upon being interviewed, CVS CEO Larry J. Merlo said: "Being purpose-driven is much more than just a marketing strategy. It guides our operations, our acquisitions, our budget ... it is integrated into everything we do."

 

The end of marketing?

 

A few months ago, coinciding with Marcos de Quinto's departure from Coca-Cola, the multinational announced its intention not to replace the Spanish executive with a new CMO, but to merge the marketing, commercial and customer departments under the leadership of a Chief Growth Officer, with a future focus on three pillars: technology, innovation and sustainability. This movement by Coca-Cola, a company traditionally oriented to the pursuit of marketing excellence, raises an interesting debate about the future of the discipline.

 

In an article published last March in Marketing Week, author Thomas Barta stated that CMOs face an imminent loss of influence over the C-suite. "The uncomfortable reality is that many marketers are not perceived as generating growth," he said, citing a study by US firm Russell Reynolds.

 

We are in for interesting times. Marketing is hardly likely to back down, but it will have to reinvent itself and rethink what role it should play within organizations. If there is one thing that’s clear, it is that for companies operating in the era of purpose, to communicate is no longer to create a myth and try to sell it – but to find a truth, embrace it and connect with an audience through conversations that generate value. In this way, brands can claim their role in culture, and actively demonstrate their responsibility to society.

 

Welcome to the purpose era.