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How growth with purpose became a pre-req

guy walking on mountain path

Once upon a time growth and purpose were diametrically opposed forces for organisations.

In a nutshell

  1. Growth and purpose have long been opposing forces for organisations. But recently the boundaries have blurred and organisations are starting to talk about brand purpose and social licence, and consumers are increasingly demanding a shift away from single-minded growth. 
  2. We work with many of our clients to set a strategy around brand purpose. Generally this involves a blend of the unique nature of the category, the organisation itself and the level of social licence customers feel is permissible for the organisation. We then blend this with culture to unlock the right purpose territory for them to play in.
  3. There's evidence that purpose helps to drive company performance and can unlock new opportunities for growth, as long as it's done with authenticity. 

The intent of an organisation was once painfully clear for all to see. You were either a “fat cat” business with no conscience, or a “good hearted charity” with a conscience. But somewhere along the way, the boundaries got blurred. Companies started to talk about brand purpose and social licence to operate, while at the same time charities and government organisations started to talk about achieving growth.

Cultural forces at play have now bought both growth and purpose into alignment, with the two forming a symbiotic relationship. A raft of political, economic, social and technological forces such as climate change, the rejection of capitalism and the rise of the circular economy have led to the current state of play.

Purpose is no longer optional

People are now demanding that organisations are driven by a bigger purpose, and these calls are coming loudest from the younger generations of Millennials, Generation X and Generation Alpha. In their eyes, growth is OK-ish. But it must be sustainable, and grounded in a greater sense of good with trust and authenticity at its heart. So can an organisation today exist without purpose?

Well no, not really.

Definite subtleties exist around the definition of brand purpose. Despite being a term used in many different contexts, purpose is not simply a set of well-defined values or a mission statement hanging in the lunch room. Rather, purpose is specifically about how the organisation has dedicated itself to making the world a better place.

This differs slightly from being an activist brand. Being an activist brand versus a purpose-led brand isn’t a binary choice – brands have the ability to choose to have purpose, without activism or have both in their DNA if desired.

Taking inspiration

"There are many examples of companies achieving growth while at the same time living their purpose, which can at times look at odds with economic growth on the surface."

There are many examples of companies achieving growth while at the same time living their purpose, which can at times look at odds with economic growth on the surface.

As an outdoor clothing and gear retailer, Patagonia’s purpose is to save the planet. At its core, it is an activist brand. In 2011, Patagonia purchased a full-page ad in The New York Times which featured a simple shot of a fleece under the headline “Don’t Buy This Jacket.” The ad encouraged customers to repair and reuse as much of their clothing as possible, and Patagonia created a market with eBay for customers to trade items they no longer needed. The Common Threads Initiative repaired more than 30,000 items in 18 months. All this while actually selling more clothing and experiencing double digit growth.

Ironically, the more Patagonia campaigned on their anti-consumerist message, the more people brought its products. Sales increased about 30% during 2012, to $540 million. They see their continual success today as a rebuttal to companies that restrict societal impact to a second or third-tier priority in the corporate world.

Closer to home, Allbirds is a great example of a Kiwi merino footwear brand that was explicit about its purpose to create shoes in a better way and drive positive change in the world. And with its status as Silicon Valley darling and a recent valuation of $2 billion, who can argue.

Nike’s recent Kaepernick moment has firmly cemented the company’s brand purpose and found a modern way of reimagining it: “Making a positive impact in communities where we live and work.” Based on the evidence, growth with emerging generations is pretty certain and Nike look to be playing a long game with capturing growth.

Putting it into practice

"At TRA we work with many of our clients to bring the customer into the room when setting strategy around brand purpose and defining what it should set out to do in the world."

At TRA we work with many of our clients to bring the customer into the room when setting strategy around brand purpose and defining what it should set out to do in the world. Generally this involves a blend of the unique nature of the category, the organisation itself and the level of social licence customers feel is permissible for the organisation. We then blend this with culture to unlock the right purpose territory for them to play in. For example, working with Mercury and their customers to develop “Energy Made Wonderful” has had a tangible and measurable impact on both their commercial performance and internal culture.

Or with Lion, we used their company purpose of “enriching our world everyday by championing sociability and helping people to live well” to define and co-create new avenues for growth, with many of these sitting in non-alcohol related categories.

In fact with our own purpose, TRA strives to improve the world by making better stuff for people (be that products, services or experiences) while unlocking growth for our clients, both commercial and government entities.

Doing purpose right

So growth and purpose are far from mutually exclusive. In fact purpose helps to drive company performance and can unlock new opportunities for growth. An investment in the companies on the Stengel 50 (a list of the world’s fastest growing brands, powered by purpose) over the last decade would have been 400% more profitable than an investment in the S&P 500.

But some simple rules exist to pull this off with aplomb. Most importantly, brand purpose must be done in an authentic way which is true to the organisation. 

Saying is also not enough – the company must also live the purpose, even if it leads to uncomfortable truths or strategic segues. Building a community outside of the organisation around the purpose is also a positive in that it creates a sense of emotional involvement and brand momentum.

Brands now, like people, are multi dimensional. And in the best brands their profit and purpose align. Don’t we all want to be a better person and help the world to be a better place at some level?

Amber Coulter
Partner at TRA

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