Interview by: Alistair Craven
Roy Spence is chairman and CEO of GSD&M Idea City, a leading national marketing communications and advertising company.
Under Roy’s leadership and their Purpose-based Branding™ philosophy, the agency has helped grow some of the world’s most successful brands and has used their talents to make a difference in communities around the country and the world.
Roy has been named Ad Man of the Year and Idea Man of the Century and has been interviewed by The Wall Street Journal, USA Today, The New York Times, BusinessWeek, US News & World Report, Esquire, Fast Company, INC. and Fortune for his perspectives on advertising, marketing and finding and fulfilling an organization’s purpose. A popular keynote speaker, he regularly addresses audiences from throughout the business, government and non-profit communities.
Haley Rushing cofounded the Purpose Institute along with Roy Spence. The Purpose Institute is an organization dedicated exclusively to helping clients discover and articulate their purpose and values in the world.
Over the years, Haley has helped a number of the country’s most visionary organizations develop business strategies that are founded on a strong core purpose and authentic core values, including Southwest Airlines, Wal-Mart, Charles Schwab, Norwegian Cruise Line, Whole Foods, World Market, Univision, The American Council on Education, Texas A&M and, most recently, the American Red Cross.
AC: Can you give us a quick definition of purpose and its importance in a business?
Roy Spence & Haley Rushing:
A purpose statement is a definitive statement about the difference an organization is trying to make in the world. It’s the reason why a company exists beyond making money. And it’s important because it drives everything.
- It drives decision-making: you can look at an opportunity or a challenge and ask yourself, "Is this the right thing to do given our purpose? Does this further our cause?" If it does, you do it, if it doesn’t you don’t;
- It drives meaningful innovation: employees are inspired to find new and fresh ways to fulfil the purpose of the organization;
- It drives consistency: Purpose acts as an anchor that holds the organization steady during tumultuous times and also acts as a North Star to guide you on your way as you journey towards your agreed upon destination;
- It drives performance: study after study has shown that purpose-driven organizations ultimately achieve higher levels of performance than comparison companies who, ironically, are focused exclusively on profit.
AC: Can you explain what you term “finding the thrill?”
Roy Spence & Haley Rushing:
Every great leader should be clear about what "the thrill" is for their organization. What turns the organization on? What are you genuinely fanatical about? Where do you naturally go above and beyond the status quo? Look at behaviours, attitudes, and beliefs that exist within the organization in order to discover signs of fanaticism that may hold the key to your true passion.
Sam Walton and the people of Wal-Mart found the thrill in figuring out new ways to lower costs so that their customers can save money. Herb Kelleher, Gary Kelley and the employees of Southwest Airlines find the thrill in opening up the skies to more people by keeping their costs low and their spirits high. John Mackey and the team members of Whole Foods Market find the thrill by doing business in a way that nourishes not only people’s bodies, but also the vendors they work with, the communities in which they operate and the planet at large.
If there’s nothing ‘thrilling’ about the work that you do, it’s highly unlikely that your employees will be thrilled to go to work, or that the marketplace will be thrilled to buy your products and services.
AC: How do you define corporate culture?
Roy Spence & Haley Rushing:
The Late Professor Sumantra Ghoshal characterized corporate culture best when he described it as "the smell of the place." As he put it, some places can smell like Calcutta in the summer – stifling, unbearable, oppressive…while others feel like Fontainebleau in the Spring – vibrant, alive, revitalizing, and invigorating. And you get the smell of the place very quickly. That smell is largely determined by the leadership of the organization and can be managed.
"Without a purpose, there is no heartfelt motivation or inspiration to drive innovation in a constructive and meaningful way."
We believe that by discovering and articulating the core values authentic to a culture and by harnessing the collective energy and will of an organization towards a purpose that gives the work significance and meaning, the smell of the place can begin to feel more like a walk through Fontainebleau than a summer in Calcutta. Values and purpose are the starting point of a great corporate culture.
AC: How does having purpose help to foster innovation?
Roy Spence & Haley Rushing:
Without a purpose, there is no heartfelt motivation or inspiration to drive innovation in a constructive and meaningful way. Innovation for innovation’s sake often results in a lot of wasted time and energy. Innovation designed to facilitate a core purpose in new and exciting ways is where meaningful progress is made. Let’s take Pampers as an example.
For decades, Pampers saw themselves as being in the business of keeping babies dry. When Jim Stengel, Former CMO of P&G, recognized that ‘dryness’ was linked to better sleeping habits which are critical for brain development, he elevated the brand to a higher purpose – taking them out of the ‘dry butts’ business and putting them in the baby development business. With that purpose in place, innovation spread like wildfire. They created a vibrant online community at Pampers Village where parents can find useful information to help cultivate healthy development of their children. They developed a Pampers Parenting Network with a host of experts to answer any and all questions about developmental milestones. They partnered with UNICEF to offer a vaccination to a child in need for every package of Pampers purchased. The purpose served as a launching pad for meaningful innovation that catapulted Pampers to P&G’s first $8 billion dollar brand.
AC: Perhaps one of the more difficult stages involves communicating purpose. Where do you think organizations tend to go wrong in this regard?
Roy Spence & Haley Rushing:
The two pitfalls we see are (1) a lack of authenticity; and (2) a lack of commitment.
If the purpose isn’t real – if the organization isn’t walking the talk – it’s highly unlikely that the communication, even the best communication, is going to have any real effect. On the flipside, if the organization is walking the talk, creating clear and inspirational language that celebrates the difference the organization is making in the world, it can increase the level of employee engagement and really energize the culture.
The other fatal flaw is a lack of commitment to communicating the purpose on a consistent basis. People are often supremely inspired coming out of the gate – pep rallies, inspirational videos, corporate manifestos – only to revert to business as usual, status quo communication shortly thereafter. For purpose to be communicated effectively, it needs to be done consistently – over time, in all communications, for all employees. Wal-Mart has done a phenomenal job doing just this with their new purpose-based rally cry: Save Money. Live Better.
AC: You discuss a key element as being direct communication with employees. How feasible is this within large, multinational organizations?
Roy Spence & Haley Rushing:
Large, multinational organizations have no shortage of communication with their employees. What they have is a shortage of consistency and common ground. They have hundreds, if not thousands, of pieces of communication that their employees are bombarded with each year. We do corporate communication audits for most of our clients and the biggest problem is fragmentation and misalignment of messaging.
Purpose can provide the common thread that ties together the multitude of communication that goes out to employees so that they begin to see and understand the big picture. When a company is large enough, the external advertising can also be designed with the employee audience in mind. For years, we used Wal-Mart Associates in our ad campaigns to role model the "Wal-Mart Way" to 1.2 million associates worldwide.
AC: Product extension and diversification strategies are often called upon when organizations struggle in difficult times. Can such strategies interfere with purpose?
Roy Spence & Haley Rushing:
Having a purpose in place can make sure that product extension and diversification is pursued in an intelligent way. Hallmark has a very noble purpose: To create meaningful connections that enhance relationships and enrich lives. Imagine the product extensions and sectors that they might get into that directly fulfil that core purpose in new and exciting ways.
Or take the incredibly eclectic and diverse Virgin. Their purpose is to be a consumer champion by identifying markets where, in their words, "the customer has been ripped off or under-served, where there is confusion and/or where the competition is complacent", and make a difference by re-writing the rules of the game through the well-defined values of Virgin.
From that purpose-based perspective, Virgin is wide open to pursue any sector that is not serving the customer well and could use a healthy dose of Virgin values to redefine the experience; hence, a portfolio that includes everything from telecommunications to travel, financial services, leisure, music, publishing and retailing.
AC: How important is an organization’s leader when it comes to driving purpose?
Roy Spence & Haley Rushing:
It’s not just important, it’s essential. For purpose to be meaningful, it needs to be championed by the executive leaders in the organization. In fact, we believe that the primary responsibility of a leader in a purpose-based organization is to build, nurture and sustain the core purpose and core values of the organization. If the leader is not on board, then decisions will not be made to ensure that the organization is in fact fulfilling the purpose in meaningful ways. If the leader doesn’t embody the values and get fired up about the purpose, the employees won’t either. If the leader doesn’t feel beholden to the purpose, then decisions will be made that take the organization down paths that make the purpose untenable. Even companies with a history of great purpose can be derailed when a new leader steps into a role and begins to trespass all over the purpose.
AC: Interestingly, you state that if you are a true leader of purpose, "you won’t simply do what your competitor is doing." Can you elaborate on this?
Roy Spence & Haley Rushing:
If you try to be like the competition, the best you’ll ever be is a "worse them." There was a brief moment in time where Wal-Mart got a bit of Target envy. They decided they needed to spend more on fixtures and finish out and expand their offering to include $500 bottles of wine and sushi bars. Rather than increasing their ‘competitive advantage’ they were lambasted for not understanding and embracing the real value that they offer to their customers – which is significant. When they focus their energy on being a better Wal-Mart – improving their low cost model so that they can save people money – they’re unstoppable.
"The simple fact of the matter is this: great brands are born out of great leaders, who have created great organizations that create something that actually matters to people."
Southwest Airlines is another great example of a company with enormous competitive pressures. JetBlue caused quite a stir initially – causing many debates about whether or not to offer in-flight TV. Ultimately, Southwest chooses not to navigate by the competition but to navigate by their own internal compass – which is always set on keeping costs as low as possible so that they can fulfil their purpose of giving people the freedom to fly.
AC: Can you tell us about purpose-based branding?
Roy Spence & Haley Rushing:
The simple fact of the matter is this: great brands are born out of great leaders, who have created great organizations that create something that actually matters to people. True to the name, purpose-based branding is simply the process of building a brand based on the fundamental purpose of the company (that stands in stark contrast to companies that want to build their brand based exclusively on the perceived value created through the advertising alone).
We look at every advertising assignment and think about how we can use it as an opportunity to communicate the purpose of the company in an intriguing, relevant and compelling way. We find segments of the population that share the values of the brand and would recognize the value of the brand in their lives and then we connect with them based on their unique media habits. And we’re constantly measuring the results that we get in the marketplace and making improvements to the work as needed.
We’ve developed purpose-based branding as a powerful tool to;
- tell the world what a company stands for,
- to attract and inspire employees who share their values,
- to face the realities of the current market situation and address them with powerful and persuasive messaging.
AC: Of all the case studies shared in your book, which stand out as the most rewarding that you have worked on?
Roy Spence & Haley Rushing:
That’s easy: Southwest Airlines. Herb Kelleher, Colleen Barrett and their band of brothers at Southwest had done all the hard work to create a revolutionary new business model that dramatically reduced the cost of flying and increased the percentage of the public that was able to fly. What we did was bring language that captured the difference they had made in the marketplace. We discovered that their purpose was to give people the freedom to fly. We helped them launch it internally by anointing all of their employees Freedom Fighters and issuing a Freedom Manifesto from Herb to all of the employees. We switched from launching markets to liberating markets, complete with Freedom Parades marching down main streets. We worked with the people department to re-cast their benefits as "employee freedoms." We created promotions, like Friends Fly Free, loyalty programmes like Rapid Rewards, and product innovations like DING! that all had an element of freedom imbedded in them. It’s been an incredibly rewarding experience and we continue to grow and evolve the expression of their purpose over time. It’s been and will continue to be a great trip!
AC: Are there any closing comments you wish to make?
Roy Spence & Haley Rushing:
When the dust settles from this economic Armageddon, the only companies and organizations left standing will be those who actually stand for something beyond making money. Without a purpose that improves people’s lives and contributes to the greater good, organizations will struggle.
It is our hope that business leaders and entrepreneurs will use the current crisis as an opportunity to re-evaluate the core purpose of business, to go beyond the exclusive and relentless drive to maximize profit and increase shareholder value at any cost. Instead we propose a more purpose-driven approach to business capable of creating value for everyone in a more sustainable and real way.
May 2009.
You can order It’s Not What You Sell, It’s What You Stand For from amazon.com