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LEADERSHIP IS A PROCESS OF SOCIAL INFLUENCE, WHICH MAXIMISES THE EFFORTS OF OTHERS TOWARDS THE ACHIEVEMENT OF A SHARED GOAL.
Thursday, March 08, 2012
Jim Stengel, former global marketing officer for Procter & Gamble, believes that businesses must rethink their purpose to achieve far better results.
But not just the most apparent purpose, but a higher order ideal or purpose. For example, Johnnie Walker exists to make great whisky, but its higher order ideal is to celebrate journeys of progress and success.
Starbucks must make great coffee, but it must do more if it is to attract people and innovate in ways that make life better for the people they serve both inside and outside the organisation. “It’s necessary,” writes Stengel in Grow, “to want to be the best-performing enterprise around, with the highest standards, the best people, and the most satisfied customers.
However, this simply doesn’t aim high enough and look far enough ahead. To hit higher targets and stay out in front of the competition requires an ideal. ”To that end, Starbucks also exists to create connections for self-discovery and inspiration. It’s what fuels passion and creates meaningful work. A brand ideal of improving people’s lives is the only sustainable way to recruit, unite, and inspire all the people a business touches, from employees to customers.”
Stengel believes that a higher-order brand ideal must improve people’s lives in one of five fields of fundamental human values:
Eliciting Joy: Activating experiences of happiness, wonder, and limitless possibility; create moments of happiness that engage our thoughts and emotions as well as our physical senses. (Coca-Cola, Zappos, Lindt)
Enabling Connection: Enhancing the ability of people to connect with one another and the world in meaningful ways. Key concepts in this field are connect, listen, reach, and community. (Airtel, Fed Ex, Blackberry, Natura)
Inspiring Exploration: Helping people explore new horizons and new experiences. Helps customers learn, gives them powerful tools, and invites them to reinvent themselves and their world. (Apple, Discovery Communications, Pampers, Red Bull)
Evoking Pride: Giving people increased confidence, strength, security, and vitality; supporting self-expression and inspiring passion. (Calvin Klein, Heineken, L’Occitane)
Impacting Society: Affecting society broadly, including by challenging the status quo and redefining categories. (Accenture, IBM, Method, Seventh Generation)
Stengel’s bases his conclusions on a ten-year growth study involving 50,000 brands. The study tracked the connection between financial performance and customer engagement, loyalty and advocacy. The result was “The Stengel 50.” In the 2000’s, an investment in these companies would have been 400% more profitable than an investment in the S&P 500. “If you’re willing to embrace the same concept and align your business with a fundamental human ideal, you can achieve extraordinary growth in your own business and your own career. My research shows that your growth rate can triple.”
Stengel’s point is good psychology. Success is more complex than any one factor. More good decisions than bad (intelligent people make silly mistakes too); timing and luck all play a part too. And then great companies get off track, not because they were doing the wrong thing, but because they stop doing them or failed to adapt appropriately. The ideas presented in Grow are what worked for Stengel for the time he was at Procter & Gamble and properly applied may work for you too. Generally, if it is based on sound principles, it’s always worth consideration. And Sengel’s ideas are.
One implication of the study is interesting. Stengel reports that the “study challenged P&G’s paradigm of moving people around frequently. The companies that were growing the fastest had a different paradigm. In recruiting and hiring they looked for people whose values fit with their brands, and tended to keep people working in the same areas for much longer.”
He categorizes the people that run The Stengel 50 as business artists. “The fastest-growing businesses in the world have a leader whose relationship to the business is not primarily that of an operator, no matter how savvy, but an artist whose primary medium is an ideal.”
The business case for ideals is about playing a role in the lives of both customers and employees at a much more important level than the competition does. It’s about connecting with people holistically: rationally and emotionally, left brain and right brain.
Stengel recommends that you continually ask four questions:
1. How well do we understand the people who are most important to our future?
2. What do we and our brand stand for?
3. What do we want to stand for?
4. How are we bringing the answers to these questions to life?
The power is in the answers and executing against them. What is your primary purpose? What do the people you serve care about beyond what they buy from you? Could you benefit from discovering your higher ideal?