Very well-argued. In addition, the issue about why everyone ignored the source/funder comes back to another tendency today - the obsession with “fact-based” evidence. I see graphics and statistics hurled around the internet with gay abandon with little thought given to the age or source of the data, or the reason that it was gathered in the first place.
Thanks Sue – yes I see a lot of that too. And to be fair, the onus will be on me to be equally questioning of any anti-purpose research that comes out. In general, I think ad effectiveness research is an *extremely* hazy area where people have way too much confidence in the conclusions.
Ok, the research is flawed, and, from CSR to triple bottom line to stakeholder capitalism to the canonization of purpose to whatever comes next, it all gets co-opted, debased and diluted by corporate forces from Davos to Danone to Wall St.
Even so, there’s an argument ‘purpose’ is an attempt to counterbalance the dominant effect on our social lives of business maximizing shareholder value. In a post-08 world it appears to have had a broader effect than previous incarnations.
“It’s about the dangers of businesses exercising political and cultural influence far beyond their remit, and getting in the way of real societal progress as result.”
What’s their remit? Was there a time when business didn’t exercise political and cultural influence? Where’s the evidence it’s getting in the way?
Why the hints at a return to Friedman?
In Capitalism and Freedom (1962) Friedman wrote, ‘there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition, without deception or fraud’.
In 1970, he wrote ‘the social responsibility of business is to make as much money as possible while conforming to their basic rules of the society, both those embodied in law and those embodied in ethical custom’.
“The actual argument was subtler than that, but this is how it was received”
Received, enthusiastically seized and implemented in practice, so that wealth creation within the financial markets has become an end in itself, & business has enjoyed enormous influence on the ‘rules of the game’ with no shortage of scandal.
Friedman’s nod to ‘ethical custom’ is interesting, something Lessig’s framework later recognized. Lessig suggests 4 interacting overlapping forces that have a regulating mechanism to constrain and guide behavior; markets, law, ‘architecture’, and social norms. There are no bright lines.
Brands are social relations, advertising is about creating social norms and ‘saleability’. I doubt Field’s research is the best case purpose can muster. Elsewhere Cadbury’s won a Gold APG award addressing old age loneliness.
Maybe the question we need to keep asking is how to keep making it better?
Thanks Rupert – all fair questions. At some point, I'm going to try to condense my case into one definitive post, because I'm aware I'm nodding towards various arguments without going fully into them. This post was more about addressing the Peter Field research in particular, because I fear it will be more influential than it deserves to be. Right now, I feel like I'll be repeating points I've already made if I answer the questions you raise, but I'll definitely bear them in mind as a challenge in future.
Your article was really thought-provoking Nick but I’m particularly glad to see this exchange with Rupert. My concern otherwise is that the purpose debate feels increasingly polarised - our choices are either deluded businesses tilting at windmills or the ‘only profit matters’ gang emulating Gordon Gekko. Somewhere in between there must be a place where responsibility and commerciality can co-exist effectively, right?
Yes, responsibility and commerciality can absolutely coexist – and many small, medium and large businesses have done that admirably for decades. But purpose is fundamentally an evasion of responsibility, not an embracing of it – one that really took off post-2008 crash. The beguiling fiction of purpose and profit being happy companions is WAY too convenient for businesses, and continually obfuscates clear thinking and tough choices. If you haven’t already, it’s worth catching up on previous posts (Purpose wins. Who loses?) where I’ve had some good exchanges with Rupert in the comments. Thanks for reading!
Thank you for writing such an articulate and thoughtful piece and for raising our attention to the sponsorship of the study. The sceptic in me wonders whether the story in the data was exactly what they didn't want to hear - that on average, non-purpose campaigns generate 1.6 ‘very large’ business effects, while purpose campaigns generate only 1.1. You can imagine sitting at that first presentation of the research findings ...and the tumbleweed.... I wonder if Peter Field was then urged to 'explore' the data in a different way to ensure it told the story they wanted it to tell. Which is of course, conjecture, and I appreciate your professionalism in avoiding a headline that screamed this reading between the lines.
"It is the Davos-backed, corporate-political consensus that progressives need to kick against – the establishment, not the insurgent." Exactly. Are you for change or not? Making unrestrained capiltalism seem cuddly through "purpose" isn't radical. It's out and out collaboration.
We're now at the stage where activism is a "gap in the market" to be exploited by spin-off creative shops, (see link https://www.lbbonline.com/news/why-sustainability-is-best-achieved-one-bite-sized-chunk-at-a-time, I was looking up who produced the UN dinosaur ad out this week) applying the established cultural branding approach lifted from consumer culture theory, but without any really serious engagement with the economic issues. "Sustainability is best achieved in bite-sized chunks", they claim. Is it? The language of consumption is like an iron cage! Wishy-washy shareholder capitalism 2.0.
The simple fact is we are stuck on the horns of a dilemma, don't grow businesses and you risk social collapse, do grow businesses in the economic system, as presently designed, and we risk ecological collapse (and social collapse).
In the end, I think we'll end up with a really significant change in ownership structures, something like what Varoufakis is proposing, within a market structure, and where we all are directly invested in the sustainable dev. goals, thinking about it there's a good Intelligence2 debate with the FT's Gillian Tett and Varoufakis, she is extremely well prepared and his responses 'in the moment' are impressive.
Many people forget that a brand has an internal and external role to play (purpose, values, behaviours vs. positioning, proposition, personality) - 'Purpose' originally (i believe) was not developed to be advertised.
Last week in Forbes, Burger King’s CEO explained their lack of performance down to a struggle to find the right value narrative – if ever in doubt it reaffirms the importance of capturing the right consumer value proposition, the ‘what’s in it for me?’ in order to win.
Congratulations on an informative article, I think you're right, but I also think we're way beyond the tipping point. Keep up the good work and I hope to be prove wrong.
Thanks Anthony – I’m hoping we’re at a tipping point somewhere near the end of purpose. Lots of mainstream articles/books popping up about the dangers of ‘woke’ capitalism and corporate over-reach. I live in hope.
The large majority of companies/brands do not exist, primarily to heal society or the environment. So they would be better off not to use that as an ad claim and risk getting ‘found out’. But that does not mean that most brands do/could not have a purpose that goes beyond making profits and which can give them meaning in the hearts and minds of important stakeholders (customers, employees, influencers, etc) that triggers purchase - maybe even loyalty. Think of Airbnb making us feel like we Belong, Red Bull letting us dream of gaining super-human powers, Vanguard Investments stands up for the small investor trough education and low fees, while Hermès brings us social status and prestige at a premium price, guided by creativity, craftsmanship and high quality materials. These brands are not claiming to save the world (though most companies sure try avoid being perceived as messing it up, as you point out). But they promise more than ‘superior products at a good value,´ as well. They give their brand meaning beyond the material. And meaning is something most if us are seeking un this (post-)modernist and consumerist-critical world. Are we not?
The large majority of companies/brands do not exist, primarily to heal society or the environment. So they would be better off not to use that as an ad claim and risk getting ‘found out’. But that does not mean that most brands do/could not have a purpose that goes beyond making profits and which can give them meaning in the hearts and minds of important stakeholders (customers, employees, influencers, etc) that triggers purchase - maybe even loyalty. Think of Airbnb making us feel like we Belong, Red Bull letting us dream of gaining super-human powers, Vanguard Investments stands up for the small investor trough education and low fees, while Hermès brings us social status and prestige at a premium price, guided by creativity, craftsmanship and high quality materials. These brands are not claiming to save the world (though most companies sure try avoid being perceived as messing it up, as you point out). But they promise more than ‘superior products at a good value,´ as well. They give their brand meaning beyond the material. And meaning is something most if us are seeking un this (post-)modernist and consumerist-critical world. Are we not?
Thanks for the comment – I try to cover some of these issues in an earlier post: https://nickasbury.substack.com/p/purpose-wins-who-loses I think you’re conflating purpose with the broader idea of meaning/value. For-profit businesses do not have a purpose beyond profit, no matter how much they strain to convince themselves otherwise. But they can and do have many levels of meaning in the lives of customers and employees – that was the case long before purpose came along and will remain so (with greater authenticity and confidence) after the delusion of purpose has gone.
I guess if you let companies only have one ‘Purpose’, then finding funding to sustain themselves might be the most important one (acknowledging that quite a few companies succeed to attract funding without making ‘profits’ in a GAAP sense).
But couldn’t brands be about more than that? Just like humans seem to be about more than ‘Survival’? We create brands for ourselves, after all.
But you are right. “Purpose” has become such a loaded term in Brand Strategy by now that we have adopted the terms “Dream” composed of a brand Mission and its Myth instead. Trying to capture the ‘left’ and ‘right’ brain aspects of the reason for being of brands.
Super well argued..I agree with your ethical problem..I had the same issue. Corporate interest ( well meaning as they may be) and not elected political leadership or cultural consences driving views of society . There is risk associated with that kind of power..Havingvsaid that we should not take away the enormous good companies can do( specially in the developing world) by adopting rwal purpose.
Thanks – I agree we shouldn't lose sight of the good that business can do in the world. But I believe that 'purpose' is the wrong way to frame it – and ultimately leads to bad societal outcomes. I try to make that case in an earlier post – https://nickasbury.substack.com/p/purpose-wins-who-loses
Thank you for sharing this. However, I think that we bludgeon purpose for things it was never meant to do and do not understand or laud it for what it does. For one, purpose is not about ads - it is about direction and inspiring people who work there. It will exist irrespective of whether it is advertised or not. As someone famously said: "Profit and growth are to business are what breathing is to life. But the purpose of life ain't breathing". Maybe, we stop this correlation with ads. Maybe, marketing should not own purpose - because then it becomes a gimmick or is reduced to it. The second aspect is time: purpose endures or no. relieve purpose from the shackles of demand-supply cycles and comps - read "The Living Company" - a book that traces reasons for some brands/enterprises lasting more than 300 years. The world's oldest beer brand is 1000 years old. Third, purpose is about inspiring and aligning ALL internal actions. From the work done in Brand consulting, one has seen Purpose having objectives like winning Innovation awards in 2-3 years not at Cannes but in industry and scientific innovation forums. Last, purpose is not about making money - it is about what you are willing to lose money for. What do you do when no one is looking. In fact, having purpose is probably the only hope where avarice and greed seem the only dominant motivations. I believe in purpose whether you advertise it or not - provided you act on it. Have one if you are an advertiser or not. We need purpose for exactly the same reason you mention we should not have it.
Thanks for the comment – I agree that purpose is fundamentally a business issue, not a marketing issue. And it is possible for a business to be 'purpose-led' without majoring on that in its marketing. However, it's the business side of purpose that actually concerns me much more.
For me, the only definition of purpose that matters is the one embraced by Larry Fink and BlackRock – the idea that businesses should pursue an explicitly social purpose beyond profit. So it's effectively synonymous with stakeholder capitalism. And I think it's the wrong model – opening the door to massive corporate over-reach into areas that should be decided by democracy, not market forces.
Your idea that 'purpose is not about making money – it's about what you are willing to lose money for' is great, but it's the polar opposite of the case that purpose advocates make for it. The whole idea from the outset has been that purpose and profit go hand in hand: 'doing good is good business'. I write more about that here: https://www.creativereview.co.uk/end-brand-purpose/
I understand Nick - overreach is a real risk. Unlike many where the business was "born" out of a need area, it wanted to solve that is also positive. Patagonia is an outlier in that sense - but, has become the poster boy for everyone from aluminium to fossil fuel. My issue is that purpose advocates are mostly from advertising or like the CEO from Danone - using for personal PR. Maybe, purpose should be silent and practiced with stakeholder participation and governance from outside to develop innovations that transform the business in the right direction.
This is such a well-researched and well-argued piece Nick.
Thanks Tom – I've somehow fallen deep into this rabbit hole
Agreed. Extremely so.
Very well-argued. In addition, the issue about why everyone ignored the source/funder comes back to another tendency today - the obsession with “fact-based” evidence. I see graphics and statistics hurled around the internet with gay abandon with little thought given to the age or source of the data, or the reason that it was gathered in the first place.
Thanks Sue – yes I see a lot of that too. And to be fair, the onus will be on me to be equally questioning of any anti-purpose research that comes out. In general, I think ad effectiveness research is an *extremely* hazy area where people have way too much confidence in the conclusions.
Ok, the research is flawed, and, from CSR to triple bottom line to stakeholder capitalism to the canonization of purpose to whatever comes next, it all gets co-opted, debased and diluted by corporate forces from Davos to Danone to Wall St.
Even so, there’s an argument ‘purpose’ is an attempt to counterbalance the dominant effect on our social lives of business maximizing shareholder value. In a post-08 world it appears to have had a broader effect than previous incarnations.
“It’s about the dangers of businesses exercising political and cultural influence far beyond their remit, and getting in the way of real societal progress as result.”
What’s their remit? Was there a time when business didn’t exercise political and cultural influence? Where’s the evidence it’s getting in the way?
Why the hints at a return to Friedman?
In Capitalism and Freedom (1962) Friedman wrote, ‘there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition, without deception or fraud’.
In 1970, he wrote ‘the social responsibility of business is to make as much money as possible while conforming to their basic rules of the society, both those embodied in law and those embodied in ethical custom’.
“The actual argument was subtler than that, but this is how it was received”
Received, enthusiastically seized and implemented in practice, so that wealth creation within the financial markets has become an end in itself, & business has enjoyed enormous influence on the ‘rules of the game’ with no shortage of scandal.
Friedman’s nod to ‘ethical custom’ is interesting, something Lessig’s framework later recognized. Lessig suggests 4 interacting overlapping forces that have a regulating mechanism to constrain and guide behavior; markets, law, ‘architecture’, and social norms. There are no bright lines.
Brands are social relations, advertising is about creating social norms and ‘saleability’. I doubt Field’s research is the best case purpose can muster. Elsewhere Cadbury’s won a Gold APG award addressing old age loneliness.
Maybe the question we need to keep asking is how to keep making it better?
Thanks Rupert – all fair questions. At some point, I'm going to try to condense my case into one definitive post, because I'm aware I'm nodding towards various arguments without going fully into them. This post was more about addressing the Peter Field research in particular, because I fear it will be more influential than it deserves to be. Right now, I feel like I'll be repeating points I've already made if I answer the questions you raise, but I'll definitely bear them in mind as a challenge in future.
Your article was really thought-provoking Nick but I’m particularly glad to see this exchange with Rupert. My concern otherwise is that the purpose debate feels increasingly polarised - our choices are either deluded businesses tilting at windmills or the ‘only profit matters’ gang emulating Gordon Gekko. Somewhere in between there must be a place where responsibility and commerciality can co-exist effectively, right?
Yes, responsibility and commerciality can absolutely coexist – and many small, medium and large businesses have done that admirably for decades. But purpose is fundamentally an evasion of responsibility, not an embracing of it – one that really took off post-2008 crash. The beguiling fiction of purpose and profit being happy companions is WAY too convenient for businesses, and continually obfuscates clear thinking and tough choices. If you haven’t already, it’s worth catching up on previous posts (Purpose wins. Who loses?) where I’ve had some good exchanges with Rupert in the comments. Thanks for reading!
absolutely superb
“Or maybe I am being naïve.“ is the new gold standard way to end a blog post.
Ha, high praise from the original blogger. I think 'Anyway' will always be king.
Thank you for writing such an articulate and thoughtful piece and for raising our attention to the sponsorship of the study. The sceptic in me wonders whether the story in the data was exactly what they didn't want to hear - that on average, non-purpose campaigns generate 1.6 ‘very large’ business effects, while purpose campaigns generate only 1.1. You can imagine sitting at that first presentation of the research findings ...and the tumbleweed.... I wonder if Peter Field was then urged to 'explore' the data in a different way to ensure it told the story they wanted it to tell. Which is of course, conjecture, and I appreciate your professionalism in avoiding a headline that screamed this reading between the lines.
Sharp thinking, as always. Look forward to reading the poem version of this...
Ha, thank you. Not enough rhymes for 'purpose'.
"It is the Davos-backed, corporate-political consensus that progressives need to kick against – the establishment, not the insurgent." Exactly. Are you for change or not? Making unrestrained capiltalism seem cuddly through "purpose" isn't radical. It's out and out collaboration.
We're now at the stage where activism is a "gap in the market" to be exploited by spin-off creative shops, (see link https://www.lbbonline.com/news/why-sustainability-is-best-achieved-one-bite-sized-chunk-at-a-time, I was looking up who produced the UN dinosaur ad out this week) applying the established cultural branding approach lifted from consumer culture theory, but without any really serious engagement with the economic issues. "Sustainability is best achieved in bite-sized chunks", they claim. Is it? The language of consumption is like an iron cage! Wishy-washy shareholder capitalism 2.0.
The simple fact is we are stuck on the horns of a dilemma, don't grow businesses and you risk social collapse, do grow businesses in the economic system, as presently designed, and we risk ecological collapse (and social collapse).
In the end, I think we'll end up with a really significant change in ownership structures, something like what Varoufakis is proposing, within a market structure, and where we all are directly invested in the sustainable dev. goals, thinking about it there's a good Intelligence2 debate with the FT's Gillian Tett and Varoufakis, she is extremely well prepared and his responses 'in the moment' are impressive.
Hi Nick,
A fantastic read! thank you.
Many people forget that a brand has an internal and external role to play (purpose, values, behaviours vs. positioning, proposition, personality) - 'Purpose' originally (i believe) was not developed to be advertised.
Last week in Forbes, Burger King’s CEO explained their lack of performance down to a struggle to find the right value narrative – if ever in doubt it reaffirms the importance of capturing the right consumer value proposition, the ‘what’s in it for me?’ in order to win.
again a great read.
Remi Couzelas
Beautifully considered article.
Thanks Paul 👍
Congratulations on an informative article, I think you're right, but I also think we're way beyond the tipping point. Keep up the good work and I hope to be prove wrong.
Thanks Anthony – I’m hoping we’re at a tipping point somewhere near the end of purpose. Lots of mainstream articles/books popping up about the dangers of ‘woke’ capitalism and corporate over-reach. I live in hope.
I really enjoyed reading this - thanks.
👍
The large majority of companies/brands do not exist, primarily to heal society or the environment. So they would be better off not to use that as an ad claim and risk getting ‘found out’. But that does not mean that most brands do/could not have a purpose that goes beyond making profits and which can give them meaning in the hearts and minds of important stakeholders (customers, employees, influencers, etc) that triggers purchase - maybe even loyalty. Think of Airbnb making us feel like we Belong, Red Bull letting us dream of gaining super-human powers, Vanguard Investments stands up for the small investor trough education and low fees, while Hermès brings us social status and prestige at a premium price, guided by creativity, craftsmanship and high quality materials. These brands are not claiming to save the world (though most companies sure try avoid being perceived as messing it up, as you point out). But they promise more than ‘superior products at a good value,´ as well. They give their brand meaning beyond the material. And meaning is something most if us are seeking un this (post-)modernist and consumerist-critical world. Are we not?
The large majority of companies/brands do not exist, primarily to heal society or the environment. So they would be better off not to use that as an ad claim and risk getting ‘found out’. But that does not mean that most brands do/could not have a purpose that goes beyond making profits and which can give them meaning in the hearts and minds of important stakeholders (customers, employees, influencers, etc) that triggers purchase - maybe even loyalty. Think of Airbnb making us feel like we Belong, Red Bull letting us dream of gaining super-human powers, Vanguard Investments stands up for the small investor trough education and low fees, while Hermès brings us social status and prestige at a premium price, guided by creativity, craftsmanship and high quality materials. These brands are not claiming to save the world (though most companies sure try avoid being perceived as messing it up, as you point out). But they promise more than ‘superior products at a good value,´ as well. They give their brand meaning beyond the material. And meaning is something most if us are seeking un this (post-)modernist and consumerist-critical world. Are we not?
Thanks for the comment – I try to cover some of these issues in an earlier post: https://nickasbury.substack.com/p/purpose-wins-who-loses I think you’re conflating purpose with the broader idea of meaning/value. For-profit businesses do not have a purpose beyond profit, no matter how much they strain to convince themselves otherwise. But they can and do have many levels of meaning in the lives of customers and employees – that was the case long before purpose came along and will remain so (with greater authenticity and confidence) after the delusion of purpose has gone.
I guess if you let companies only have one ‘Purpose’, then finding funding to sustain themselves might be the most important one (acknowledging that quite a few companies succeed to attract funding without making ‘profits’ in a GAAP sense).
But couldn’t brands be about more than that? Just like humans seem to be about more than ‘Survival’? We create brands for ourselves, after all.
But you are right. “Purpose” has become such a loaded term in Brand Strategy by now that we have adopted the terms “Dream” composed of a brand Mission and its Myth instead. Trying to capture the ‘left’ and ‘right’ brain aspects of the reason for being of brands.
More on that framework in this summary article : https://bit.ly/DreamDoDareSummaryArticle
Super well argued..I agree with your ethical problem..I had the same issue. Corporate interest ( well meaning as they may be) and not elected political leadership or cultural consences driving views of society . There is risk associated with that kind of power..Havingvsaid that we should not take away the enormous good companies can do( specially in the developing world) by adopting rwal purpose.
Thanks – I agree we shouldn't lose sight of the good that business can do in the world. But I believe that 'purpose' is the wrong way to frame it – and ultimately leads to bad societal outcomes. I try to make that case in an earlier post – https://nickasbury.substack.com/p/purpose-wins-who-loses
Thank you for sharing this. However, I think that we bludgeon purpose for things it was never meant to do and do not understand or laud it for what it does. For one, purpose is not about ads - it is about direction and inspiring people who work there. It will exist irrespective of whether it is advertised or not. As someone famously said: "Profit and growth are to business are what breathing is to life. But the purpose of life ain't breathing". Maybe, we stop this correlation with ads. Maybe, marketing should not own purpose - because then it becomes a gimmick or is reduced to it. The second aspect is time: purpose endures or no. relieve purpose from the shackles of demand-supply cycles and comps - read "The Living Company" - a book that traces reasons for some brands/enterprises lasting more than 300 years. The world's oldest beer brand is 1000 years old. Third, purpose is about inspiring and aligning ALL internal actions. From the work done in Brand consulting, one has seen Purpose having objectives like winning Innovation awards in 2-3 years not at Cannes but in industry and scientific innovation forums. Last, purpose is not about making money - it is about what you are willing to lose money for. What do you do when no one is looking. In fact, having purpose is probably the only hope where avarice and greed seem the only dominant motivations. I believe in purpose whether you advertise it or not - provided you act on it. Have one if you are an advertiser or not. We need purpose for exactly the same reason you mention we should not have it.
Thanks for the comment – I agree that purpose is fundamentally a business issue, not a marketing issue. And it is possible for a business to be 'purpose-led' without majoring on that in its marketing. However, it's the business side of purpose that actually concerns me much more.
For me, the only definition of purpose that matters is the one embraced by Larry Fink and BlackRock – the idea that businesses should pursue an explicitly social purpose beyond profit. So it's effectively synonymous with stakeholder capitalism. And I think it's the wrong model – opening the door to massive corporate over-reach into areas that should be decided by democracy, not market forces.
Your idea that 'purpose is not about making money – it's about what you are willing to lose money for' is great, but it's the polar opposite of the case that purpose advocates make for it. The whole idea from the outset has been that purpose and profit go hand in hand: 'doing good is good business'. I write more about that here: https://www.creativereview.co.uk/end-brand-purpose/
I understand Nick - overreach is a real risk. Unlike many where the business was "born" out of a need area, it wanted to solve that is also positive. Patagonia is an outlier in that sense - but, has become the poster boy for everyone from aluminium to fossil fuel. My issue is that purpose advocates are mostly from advertising or like the CEO from Danone - using for personal PR. Maybe, purpose should be silent and practiced with stakeholder participation and governance from outside to develop innovations that transform the business in the right direction.