On Elizabeth Holmes, Theranos, Noble Cause Corruption, why 'starting with why' is a charter for corporate self-delusion, and the importance of saying 'nay'.
One of the issues for companies/brands that blow their own trumpets loudly in one area of “social good” is that they draw attention to other areas of the company’s operations or brand portfolio where they may not be so virtuous - for example contributing to obesity with their food products
Nick - hello, first time caller. Re the rise of 'why' (and the door it opens to emotional guff) you might be interested to see this recently published study of language charting the rise of 'feel' and 'believe' and the demise of 'determine' and 'conclude'. Also tells a similar story with 'I' vs 'we'. https://phys.org/news/2022-01-rationality-declined-decades.html
Very interesting. I think we need to be careful telling a story about the decline of rationality because some very bad things (World Wars I & II, various Revolutions, some pretty genocidal imperialism) occurred during the "Golden Years" of rationality. Just because people use the language of rationality does not mean that they are rational.
N.B. I am not in anyway down on logic or reason or evidence or data. But I also like that we can talk about our emotions now in a way that my parents struggle with. And we have to recognise that human beings are driven primarily by their emotions rather than by abstract thought.
I'm kinda with David Hume on this. He didn't just say that reason is the slave of the passions, he said it ought only to be.
It is easy to mock purpose. It is much harder to articulate why it is so pernicious. The best piece of clear thinking yet on why we should be skeptical of those who wave it about as their call to arms. Up there with Richard Shotton's early work to expose its vapidity. Brilliant - thanks Nick.
Good thinking and writing. I think the attractions of brand purpose for professionals - in both ad agencies and large corporations are manifold. It is different to the 80s when investment bankers did not pretend that their predatory behaviour had a higher purpose ("you're in the jungle, baby, you're gonna die" as Axl Rose so astutely opined at the end of that decade). I agree that a lot of this is only partially cynical.
My take is that many of us in these roles and industries would like to be doing something noble and good. But we also like money and the power and status that come with money. So we try to reconcile these conflicting desires. And we just hope that we never called on to explicitly chose purpose over profit because we might not like the outcome of that choice.
I would rather corporate executives were not openly racist , misogynist or homophobic (yes, that is the low bar that I choose to drink at). However I agree with you that Purpose is often used to obscure less noble actions and motives.
As Axl Rose also sang: "Delusions are numberless, I vow to extinguish them all" (oh, hang on, that might be one of the Bodhisttva Vows, I get confused).
Wasn't expecting Axl Rose to play such a large part in this :)
I think Purpose is definitely seductive for clients, because it promises to reconcile those conflicting desires. You want to make money, but you also want to be ethical – and Purpose says 'it's cool, those two things totally go together'. Whereas the reality is that they will often be in tension, in all sorts of small and subtle ways. And you stand a much better chance of making good ethical decisions if you're alert to the tension, rather than lulled into believing it doesn't exist.
There are many cases of Purpose being used as a cynical cover. But I think there are even more cases of people genuinely trying to do it properly, but finding it actually confuses the ethical reality rather than clarifying it.
I would agree with all of this. Perhaps one question is: Are commercial organisations capable of having complex, nuanced discussions about ethics? And I think the answer is generally "no". Executives cannot honestly discuss what their values actually are. And therefore they cannot honestly formulate what an ethical course of action would mean for them.
So we are stuck with the Ersatz morality of Purpose.
Or to put it another way:
If we could take the time to lay it on the line...
...Or I'll just end up walkin' in the cold November rain
Thanks Duncan – yes, very interesting. I think one problem with stakeholder capitalism is its vagueness – it sounds great to say you're answerable to wider things like the community / society / planet. But if you're answerable to everyone, you're answerable to no one – there's no mechanism to decide which particular stakeholder's interests should carry more weight than any other stakeholder.
My #1 facepalm moment reading Sinek was the point where he explains that starting with the why is easier for a start-up, and it's actually okay for other businesses to start with the what and work their way in the why. He then shows a side view of his onion diagram. Which is when it hit me - this actually has much in common with old fashioned brand pyramid. It's a pyramid "shot" from above. Onions are pyramids. Black is white. And sprinkled with brain science.
Yes, I've actually been involved in some of those 'retro-fitting' processes where established companies try to work back to their 'why', usually by paying outside consultants to guide them through a months-long process that results in some version of 'We're here to make the world a better place!' It's such a tortuous thought process – if you have to go through a process like that to define your 'why', it almost certainly isn't your 'why'.
Very interesting read, but I think you've been overly extreme and used two very handy and topical companies to try and build an argument that lacks substance once inspected. Theranos and WeWork aren't the same and to try and say so, over simplifies their two situations. One perpetuated a massive fraud by lying about a product, denying scientific fact and creating a product that many were rightly skeptical of. Her use of purpose was an effective sales tool, that tricked many but it's not the sole reason she created the monster she did. She cost people their lives and is rightly facing the consequences for that.
WeWork built a good company, which currently holds a market cap of $5bn, their "crime" was over stating it and taking the investment world for a bunch of fools. As Marmite commentator Scott Galloway says they were guilty of "yoga babble" and a purpose that was frankly ridiculous. But this was openly mocked at the time by many in the media and that lead to Adam Neumann's rightful downfall. No one invested in the extension of human consciousness, but the valuation which is the stock of Soft Bank's of the this world. It was a vehicle of hype, which purpose played a role in, but it was perpetuated by an investment industry obsessed with unicorns. Is Elon Musk guilty of the same crime due to the over stating nature of self drive for Tesla?
Start With Why is everyone's favourite book on branding as it's very accessible. In a world of brand strategy and planner models that are often complex just to justify the work in the first place, here was an antidote that anyone with a college degree could take and use. It's a useful bridge for us in the brand world to help open people up to the power of a good brand. But a why is never on its own, even in his thin book. The codification of a what and how is always the partner to the why, it's just the why that can have the power. And I agree with that.
We see two types of founders come through our doors at Koto. Firstly the addressable market founder who see's the $1bn category and wants a piece of the action. The second is the passion founder who through personal experience knows something could be better. The latter is more often than not the more successful brand and therefore company. The skin they have in them makes them feel the pain and therefore strive to over come it. A good purpose is just often the simplification of this struggle.
Airbnb, who I have been lucky enough to work with since 2013, is a purpose driven company that understands the power of belonging to create transformational travel experiences. They have built an incredible travel company by being purpose led. They have challenges at a neighbourhood level, but the company's overall effect has been incredibly positive. Just ask the 100,000 displaced people they have housed in times of crisis since 2012.
I am all for questioning branding and the role it plays in the tech which is transforming our society, often for the worst, but I think you need much broader examples to create a coherent take down of purpose to convince me.
I think Nick’s articulating something we all see, I’d politely add Airbnb to it, while wanting to try and salvage something before it all sinks under the weight of its own hypocrisy.
Critics of ‘purpose’ are drawing from Hayek. The very idea of social justice is a quasi-religious belief, the rewards of the market are not just, what matters is that prices are set by competition, governed by fair rules. Listen to them today, it’s prioritize profit so that you can then afford to treat employees, suppliers, the environment fairly and ‘pay your taxes’, which in practice results in zero-contract hours, 40 yrs of flatlined wages, offshoring profits and so on, with Hayek’s ’fair rules’ written by lobbyists, and a politics that maintains this arrangement.
What can be salvaged? Here’s a distinction I see.
Any messianic, will-to-power, evangelical-entrepreneur mission statement is an immediate red light, any brushing-off of externalities an amber light. When I hear people in advertising self-referentially assert their “great power” to change consumer behavior, it's a warning sign there’s trouble ahead.
So what would be a green light? Unilever has come in for a lot of criticism recently. Back in the 1880’s when the Lever Bros. marketed their uniquely lathering sudsy soap the company had an objective “to make cleanliness commonplace and lessen the load for women.” There's emancipatory social change in there, expressed matter-of-factly, based in the product itself. More recently Hellman’s came in for criticism, they ran a “taste not waste” campaign addressing HH food waste, encouraging people to make snacks with leftovers, sales went up, (but I’ve no evidence food waste declined). In both cases they looked to fix a real problem in the world, balancing significance, ambition with modesty.
Looking at Airbnb, 'the power of belonging to create transformational travel experiences’.
It’s wishy-washy postmodern branding bs sitting on top of a flexible s/t rental platform, albeit built on a brilliant original insight. It certainly started with a communitarian feel in my experience as a host/traveller. Now it’s not unusual to be asked to say “you’re a friend staying, and not from airbnb,” you rarely meet the host in person, (also pre-covid). It has become adjacent to the buy-to-let market; creating inflation, supply side distortions, community insecurity, and so on. A bit of charity does not change this, in fact it looks cynical. They've built an incredible company because it gave people a way to extract some utility from their spare room, or make some $ while away, that previously wasn't available.
But underneath it all I think there’s one simple thing driving this, over-valuations, leading to amorality, hubris, reckless behavior, all in pursuit of maximizing future profits. Airbnb probably could have been a very nice medium sized business, pioneering a category. Unfortunately they got gripped by a world domination zero-to-one, culting-of-brands ideology.
I'm not sure it's about cases studies and examples, I think it's about principles, language and profit motive.
I think you're point is essentially big = bad. I reject that notion as nothing more than politics. Your disdain for the business Airbnb has become is based upon the loss of this original intent as you see it, seen through the lens of your own confirmation bias of the experience. I don't think internet discussion ever really squares big political differences, but I think your distaste for purpose is a veneer on top of those political feelings.
I see big companies done well as having the power to enact real change. If Airbnb stays as a medium business and has purity in your mind, then the large majority of people never experience it. I have seen and heard many stories of people going to somewhere to stay and leaving having their mind changed about many things. Yes non host present bookings happen a lot, but so do endless host present ones. That aside belonging doesn't have to be some massive transformation, it can be taking a tourist out of the normal hotel district area of a city, into a more real part of the city, showing tourists a different side of a place can enact change.
Amorality, hubris and reckless behaviour are big claims to throw in this specific example. I can see them in the case of WeWork and Theranos of course, but to say Puporse combined with scale is some kind of signal for them is over simplification of a world that is far more complex.
Thanks for the comments James – I know you have a lot of first-hand insight into all this.
On the issue of over-simplifying / being extreme, I’d say that’s a fairer description of the ‘Start With Why’ mantra or Larry Fink declaring ‘a company cannot achieve long-term profits without embracing purpose’. Purpose advocates often use these black-and-white statements, but rarely get called extreme.
Airbnb is a really useful example, because you take it as a case supporting the Purpose side, whereas I’d argue the opposite (and it sounds like Rupert would agree). That’s not to say I think they’re an evil company, or even a consciously hypocritical one – I suspect the founders are decent, well-intentioned people. But I think Purpose works badly for them on several levels.
Firstly, it’s just not a good descriptor for how they got where they are. Like most successful companies, they didn’t start with why – they started with airbeds and a gap-in-the-market idea that gradually got bigger. Any entrepreneur looking to follow them would be best learning from that approach, rather than thinking about their ’why’.
Secondly, positioning around Purpose is a high-risk move PR-wise, because you get a much bigger backlash when bad stories come along, like sharing customers data with China – the hypocrisy makes these stories irresistible for the media. And thirdly, there’s the Noble Cause Corruption argument that Purpose gives you a way to justify ethically dubious decisions like the China data-sharing – a subtler thing, and harder to prove, but it's a real phenomenon.
I agree there have always been PT Barnum figures in business – and there would hardly be any advertising if we outlawed all forms of exaggeration/hype/over-claiming. But it’s one thing to make over-hyped claims about your product (best vacuum cleaner ever!) and another to do it about your moral character (we're here to make the world a better place!) And I think that’s what makes cases like WeWork so different – they’re not just harmless hype merchants; they’re causing real damage (a trail of screwed suppliers, underpaid employees, toxic workplace culture) all under the guise of doing good. It’s hard to read The Cult of We and not be appalled by the hypocrisy and double-think.
One weird aspect of being anti-purpose is you get cast as both a left-winger (you just hate big business) and more often a right-winger (you just want to go back to greed-is-good). I have nothing against big business, but there is this weird phenomenon of WeWork / Uber / Airbnb achieving huge scale without turning a profit. In many ways, I’d rather be a smaller business (maybe Basecamp as one example) who have turned an honest profit every year.
One final point – I think the extreme version of my argument would be to declare that Start With Why is dead and we should all Start With How. But I’ve deliberately avoided that as I think simplistic mantras are part of the problem. Of course, ‘why’ is always a worthwhile question and I continue to do a lot of branding work where that’s a big part of it, especially in the not-for-profit realm. But I’ve also worked on several big corporate projects where the obsession with ‘why’ becomes incredibly torturous and unproductive.
Anyway, thanks again for the challenge – lots to think about.
One point I made was Unilever often does it well and it is very big and their big mainstream brands that do also seem to have a knack for sticking the landing.
*Of course it's politics*. Purpose is a response to Milton Friedman's "Social Responsibility of Business". Money is political. Businesses have socioeconomic consequences. My distaste is for evidence of hypocrisy, opportunism, disregard for consequences etc.
"Confirmation bias." Some brands appear to get it more right than others, why is that, what can be learned, can guidelines be written?
A while back Uber ran a purpose campaign for female passenger safety. From a company that's circumnavigated employee and consumer protection law, financed by that bastion of women's rights Saudi Arabia, aka Team Bonesaw. More recently a bank with the 3rd worst sustainability record, according to Rainforest Action Network, won a category in Campaign's US purpose/sustainability awards. And so on and so on. On the other hand I thought Carrefour's "Black Supermarket" was an exceptionally well executed purpose activation, so did Hazel Henderson, she's been doing this since the 60's.
"Disdain". I've been a airbnb'er since it started, still am, yes I've experienced the change. First you brushed off it off as 'challenges at a neighborhood level', that's fundamental to their entire brand, then ignored the specific points I made about the effects on property mkt. If Airbnb was a medium sized business there would be a bunch of other rental brands and everyone would still get to experience it.
"I see big companies done well as having the power to enact real change" Yes. Did you read the specific point I made about Unilever?
"Purity." No. You're projecting and imputing something I've not said. Airbnb, Peloton, Allbirds, WeWork etc, they all get massive valuations then do things to make the numbers and in the process *dilute* what they were. What happened to a brand standing for something and being consistent?
"That aside belonging doesn't have to be some massive transformation" Hilarious! That's perfect, take a big bold thing - dramatic change, metamorphosis, conversion - then knock it back a bit with some qualification, and voila!
Purpose must die is a thought i can most definitely get behind
One of the issues for companies/brands that blow their own trumpets loudly in one area of “social good” is that they draw attention to other areas of the company’s operations or brand portfolio where they may not be so virtuous - for example contributing to obesity with their food products
Yes totally – just on that tactical level, it leaves you very exposed.
Nick - hello, first time caller. Re the rise of 'why' (and the door it opens to emotional guff) you might be interested to see this recently published study of language charting the rise of 'feel' and 'believe' and the demise of 'determine' and 'conclude'. Also tells a similar story with 'I' vs 'we'. https://phys.org/news/2022-01-rationality-declined-decades.html
Thanks Ed, that looks fascinating.
Very interesting. I think we need to be careful telling a story about the decline of rationality because some very bad things (World Wars I & II, various Revolutions, some pretty genocidal imperialism) occurred during the "Golden Years" of rationality. Just because people use the language of rationality does not mean that they are rational.
N.B. I am not in anyway down on logic or reason or evidence or data. But I also like that we can talk about our emotions now in a way that my parents struggle with. And we have to recognise that human beings are driven primarily by their emotions rather than by abstract thought.
I'm kinda with David Hume on this. He didn't just say that reason is the slave of the passions, he said it ought only to be.
BTW I would also strongly recommend this book: https://www.allenandunwin.com/browse/books/general-books/psychology/The-Perils-of-Perception-Bobby-Duffy-9781786494566
It is easy to mock purpose. It is much harder to articulate why it is so pernicious. The best piece of clear thinking yet on why we should be skeptical of those who wave it about as their call to arms. Up there with Richard Shotton's early work to expose its vapidity. Brilliant - thanks Nick.
Thank you Russ, much appreciated.
Good thinking and writing. I think the attractions of brand purpose for professionals - in both ad agencies and large corporations are manifold. It is different to the 80s when investment bankers did not pretend that their predatory behaviour had a higher purpose ("you're in the jungle, baby, you're gonna die" as Axl Rose so astutely opined at the end of that decade). I agree that a lot of this is only partially cynical.
My take is that many of us in these roles and industries would like to be doing something noble and good. But we also like money and the power and status that come with money. So we try to reconcile these conflicting desires. And we just hope that we never called on to explicitly chose purpose over profit because we might not like the outcome of that choice.
I would rather corporate executives were not openly racist , misogynist or homophobic (yes, that is the low bar that I choose to drink at). However I agree with you that Purpose is often used to obscure less noble actions and motives.
As Axl Rose also sang: "Delusions are numberless, I vow to extinguish them all" (oh, hang on, that might be one of the Bodhisttva Vows, I get confused).
Wasn't expecting Axl Rose to play such a large part in this :)
I think Purpose is definitely seductive for clients, because it promises to reconcile those conflicting desires. You want to make money, but you also want to be ethical – and Purpose says 'it's cool, those two things totally go together'. Whereas the reality is that they will often be in tension, in all sorts of small and subtle ways. And you stand a much better chance of making good ethical decisions if you're alert to the tension, rather than lulled into believing it doesn't exist.
There are many cases of Purpose being used as a cynical cover. But I think there are even more cases of people genuinely trying to do it properly, but finding it actually confuses the ethical reality rather than clarifying it.
Axl Rose would no doubt say it better.
I would agree with all of this. Perhaps one question is: Are commercial organisations capable of having complex, nuanced discussions about ethics? And I think the answer is generally "no". Executives cannot honestly discuss what their values actually are. And therefore they cannot honestly formulate what an ethical course of action would mean for them.
So we are stuck with the Ersatz morality of Purpose.
Or to put it another way:
If we could take the time to lay it on the line...
...Or I'll just end up walkin' in the cold November rain
Hi Nick - thought this was very much up your alley. https://moneyweek.com/investments/investment-strategy/604356/shareholder-capitalism-return-power-to-company-owners
Thanks Duncan – yes, very interesting. I think one problem with stakeholder capitalism is its vagueness – it sounds great to say you're answerable to wider things like the community / society / planet. But if you're answerable to everyone, you're answerable to no one – there's no mechanism to decide which particular stakeholder's interests should carry more weight than any other stakeholder.
My #1 facepalm moment reading Sinek was the point where he explains that starting with the why is easier for a start-up, and it's actually okay for other businesses to start with the what and work their way in the why. He then shows a side view of his onion diagram. Which is when it hit me - this actually has much in common with old fashioned brand pyramid. It's a pyramid "shot" from above. Onions are pyramids. Black is white. And sprinkled with brain science.
Yes, I've actually been involved in some of those 'retro-fitting' processes where established companies try to work back to their 'why', usually by paying outside consultants to guide them through a months-long process that results in some version of 'We're here to make the world a better place!' It's such a tortuous thought process – if you have to go through a process like that to define your 'why', it almost certainly isn't your 'why'.
Very interesting read, but I think you've been overly extreme and used two very handy and topical companies to try and build an argument that lacks substance once inspected. Theranos and WeWork aren't the same and to try and say so, over simplifies their two situations. One perpetuated a massive fraud by lying about a product, denying scientific fact and creating a product that many were rightly skeptical of. Her use of purpose was an effective sales tool, that tricked many but it's not the sole reason she created the monster she did. She cost people their lives and is rightly facing the consequences for that.
WeWork built a good company, which currently holds a market cap of $5bn, their "crime" was over stating it and taking the investment world for a bunch of fools. As Marmite commentator Scott Galloway says they were guilty of "yoga babble" and a purpose that was frankly ridiculous. But this was openly mocked at the time by many in the media and that lead to Adam Neumann's rightful downfall. No one invested in the extension of human consciousness, but the valuation which is the stock of Soft Bank's of the this world. It was a vehicle of hype, which purpose played a role in, but it was perpetuated by an investment industry obsessed with unicorns. Is Elon Musk guilty of the same crime due to the over stating nature of self drive for Tesla?
Start With Why is everyone's favourite book on branding as it's very accessible. In a world of brand strategy and planner models that are often complex just to justify the work in the first place, here was an antidote that anyone with a college degree could take and use. It's a useful bridge for us in the brand world to help open people up to the power of a good brand. But a why is never on its own, even in his thin book. The codification of a what and how is always the partner to the why, it's just the why that can have the power. And I agree with that.
We see two types of founders come through our doors at Koto. Firstly the addressable market founder who see's the $1bn category and wants a piece of the action. The second is the passion founder who through personal experience knows something could be better. The latter is more often than not the more successful brand and therefore company. The skin they have in them makes them feel the pain and therefore strive to over come it. A good purpose is just often the simplification of this struggle.
Airbnb, who I have been lucky enough to work with since 2013, is a purpose driven company that understands the power of belonging to create transformational travel experiences. They have built an incredible travel company by being purpose led. They have challenges at a neighbourhood level, but the company's overall effect has been incredibly positive. Just ask the 100,000 displaced people they have housed in times of crisis since 2012.
I am all for questioning branding and the role it plays in the tech which is transforming our society, often for the worst, but I think you need much broader examples to create a coherent take down of purpose to convince me.
I think Nick’s articulating something we all see, I’d politely add Airbnb to it, while wanting to try and salvage something before it all sinks under the weight of its own hypocrisy.
Critics of ‘purpose’ are drawing from Hayek. The very idea of social justice is a quasi-religious belief, the rewards of the market are not just, what matters is that prices are set by competition, governed by fair rules. Listen to them today, it’s prioritize profit so that you can then afford to treat employees, suppliers, the environment fairly and ‘pay your taxes’, which in practice results in zero-contract hours, 40 yrs of flatlined wages, offshoring profits and so on, with Hayek’s ’fair rules’ written by lobbyists, and a politics that maintains this arrangement.
What can be salvaged? Here’s a distinction I see.
Any messianic, will-to-power, evangelical-entrepreneur mission statement is an immediate red light, any brushing-off of externalities an amber light. When I hear people in advertising self-referentially assert their “great power” to change consumer behavior, it's a warning sign there’s trouble ahead.
So what would be a green light? Unilever has come in for a lot of criticism recently. Back in the 1880’s when the Lever Bros. marketed their uniquely lathering sudsy soap the company had an objective “to make cleanliness commonplace and lessen the load for women.” There's emancipatory social change in there, expressed matter-of-factly, based in the product itself. More recently Hellman’s came in for criticism, they ran a “taste not waste” campaign addressing HH food waste, encouraging people to make snacks with leftovers, sales went up, (but I’ve no evidence food waste declined). In both cases they looked to fix a real problem in the world, balancing significance, ambition with modesty.
Looking at Airbnb, 'the power of belonging to create transformational travel experiences’.
It’s wishy-washy postmodern branding bs sitting on top of a flexible s/t rental platform, albeit built on a brilliant original insight. It certainly started with a communitarian feel in my experience as a host/traveller. Now it’s not unusual to be asked to say “you’re a friend staying, and not from airbnb,” you rarely meet the host in person, (also pre-covid). It has become adjacent to the buy-to-let market; creating inflation, supply side distortions, community insecurity, and so on. A bit of charity does not change this, in fact it looks cynical. They've built an incredible company because it gave people a way to extract some utility from their spare room, or make some $ while away, that previously wasn't available.
But underneath it all I think there’s one simple thing driving this, over-valuations, leading to amorality, hubris, reckless behavior, all in pursuit of maximizing future profits. Airbnb probably could have been a very nice medium sized business, pioneering a category. Unfortunately they got gripped by a world domination zero-to-one, culting-of-brands ideology.
I'm not sure it's about cases studies and examples, I think it's about principles, language and profit motive.
Thanks both – quality of comments on here is in danger of out-classing the post! Will reply at more length soon...
I think you're point is essentially big = bad. I reject that notion as nothing more than politics. Your disdain for the business Airbnb has become is based upon the loss of this original intent as you see it, seen through the lens of your own confirmation bias of the experience. I don't think internet discussion ever really squares big political differences, but I think your distaste for purpose is a veneer on top of those political feelings.
I see big companies done well as having the power to enact real change. If Airbnb stays as a medium business and has purity in your mind, then the large majority of people never experience it. I have seen and heard many stories of people going to somewhere to stay and leaving having their mind changed about many things. Yes non host present bookings happen a lot, but so do endless host present ones. That aside belonging doesn't have to be some massive transformation, it can be taking a tourist out of the normal hotel district area of a city, into a more real part of the city, showing tourists a different side of a place can enact change.
Amorality, hubris and reckless behaviour are big claims to throw in this specific example. I can see them in the case of WeWork and Theranos of course, but to say Puporse combined with scale is some kind of signal for them is over simplification of a world that is far more complex.
Thanks for the comments James – I know you have a lot of first-hand insight into all this.
On the issue of over-simplifying / being extreme, I’d say that’s a fairer description of the ‘Start With Why’ mantra or Larry Fink declaring ‘a company cannot achieve long-term profits without embracing purpose’. Purpose advocates often use these black-and-white statements, but rarely get called extreme.
Airbnb is a really useful example, because you take it as a case supporting the Purpose side, whereas I’d argue the opposite (and it sounds like Rupert would agree). That’s not to say I think they’re an evil company, or even a consciously hypocritical one – I suspect the founders are decent, well-intentioned people. But I think Purpose works badly for them on several levels.
Firstly, it’s just not a good descriptor for how they got where they are. Like most successful companies, they didn’t start with why – they started with airbeds and a gap-in-the-market idea that gradually got bigger. Any entrepreneur looking to follow them would be best learning from that approach, rather than thinking about their ’why’.
Secondly, positioning around Purpose is a high-risk move PR-wise, because you get a much bigger backlash when bad stories come along, like sharing customers data with China – the hypocrisy makes these stories irresistible for the media. And thirdly, there’s the Noble Cause Corruption argument that Purpose gives you a way to justify ethically dubious decisions like the China data-sharing – a subtler thing, and harder to prove, but it's a real phenomenon.
I agree there have always been PT Barnum figures in business – and there would hardly be any advertising if we outlawed all forms of exaggeration/hype/over-claiming. But it’s one thing to make over-hyped claims about your product (best vacuum cleaner ever!) and another to do it about your moral character (we're here to make the world a better place!) And I think that’s what makes cases like WeWork so different – they’re not just harmless hype merchants; they’re causing real damage (a trail of screwed suppliers, underpaid employees, toxic workplace culture) all under the guise of doing good. It’s hard to read The Cult of We and not be appalled by the hypocrisy and double-think.
One weird aspect of being anti-purpose is you get cast as both a left-winger (you just hate big business) and more often a right-winger (you just want to go back to greed-is-good). I have nothing against big business, but there is this weird phenomenon of WeWork / Uber / Airbnb achieving huge scale without turning a profit. In many ways, I’d rather be a smaller business (maybe Basecamp as one example) who have turned an honest profit every year.
One final point – I think the extreme version of my argument would be to declare that Start With Why is dead and we should all Start With How. But I’ve deliberately avoided that as I think simplistic mantras are part of the problem. Of course, ‘why’ is always a worthwhile question and I continue to do a lot of branding work where that’s a big part of it, especially in the not-for-profit realm. But I’ve also worked on several big corporate projects where the obsession with ‘why’ becomes incredibly torturous and unproductive.
Anyway, thanks again for the challenge – lots to think about.
One point I made was Unilever often does it well and it is very big and their big mainstream brands that do also seem to have a knack for sticking the landing.
*Of course it's politics*. Purpose is a response to Milton Friedman's "Social Responsibility of Business". Money is political. Businesses have socioeconomic consequences. My distaste is for evidence of hypocrisy, opportunism, disregard for consequences etc.
"Confirmation bias." Some brands appear to get it more right than others, why is that, what can be learned, can guidelines be written?
A while back Uber ran a purpose campaign for female passenger safety. From a company that's circumnavigated employee and consumer protection law, financed by that bastion of women's rights Saudi Arabia, aka Team Bonesaw. More recently a bank with the 3rd worst sustainability record, according to Rainforest Action Network, won a category in Campaign's US purpose/sustainability awards. And so on and so on. On the other hand I thought Carrefour's "Black Supermarket" was an exceptionally well executed purpose activation, so did Hazel Henderson, she's been doing this since the 60's.
"Disdain". I've been a airbnb'er since it started, still am, yes I've experienced the change. First you brushed off it off as 'challenges at a neighborhood level', that's fundamental to their entire brand, then ignored the specific points I made about the effects on property mkt. If Airbnb was a medium sized business there would be a bunch of other rental brands and everyone would still get to experience it.
"I see big companies done well as having the power to enact real change" Yes. Did you read the specific point I made about Unilever?
"Purity." No. You're projecting and imputing something I've not said. Airbnb, Peloton, Allbirds, WeWork etc, they all get massive valuations then do things to make the numbers and in the process *dilute* what they were. What happened to a brand standing for something and being consistent?
"That aside belonging doesn't have to be some massive transformation" Hilarious! That's perfect, take a big bold thing - dramatic change, metamorphosis, conversion - then knock it back a bit with some qualification, and voila!
Hi Nick I suspect this has reached your inbox already but if not - fascinating podcast series on business and purpose https://www.callingbullshitpodcast.com/hey-facebook-whats-that-smell/
Ah yes, thanks – I listened to the latest one just recently. Thought Tariq Fancy was excellent.