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Prophet turned to consumers to find out which brands matter most in their lives today. We surveyed more than 13,000 consumers in the United States to determine which 228 unique brands they simply cannot live without.
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Brand Equity – Brand Value_1_A
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Right-now thinking, content marketing and nimble messaging nurture customer bonds.
The 2021 Prophet Brand Relevance Index® (BRI), recently launched and as we sift through the top performers, it’s clear to us that relationship-driven marketing strategies are powering the strongest companies.
Now in its sixth iteration, the BRI is based on four core principles of relentless relevance, measuring whether a brand is customer-obsessed, ruthlessly pragmatic, pervasively innovative and distinctively inspired. But a year of pandemic, social unrest, political upheaval and economic uncertainty is causing some brands to soar and pushing others entirely out of the conversation.
To understand how consumers measure the most relevant brands, we closely study the specific relevance dimensions in the top-ranked brands. We see three clear consumer marketing trends executives can tap into, regardless of industry and category.
Organizations that are confident enough to jump into a pressing need, solve it fast, and communicate effectively are among the year’s biggest gainers. Top brands demonstrated an embracement of the relationship-driven marketing mindset.
Johns Hopkins Medicine, No. 8, vaults into the Index for the first time, primarily due to the creation of its widely-used COVID-19 dashboard. Launched in late January last year, when many people felt they weren’t getting the answers they needed from the government or media sources, it quickly became not just a trusted data provider, but also a source of daily contact.
As Black Lives Matter protests swept the world, many companies did little more than slapping a black box into their Instagram accounts. But Xbox, No. 19 and one of the Index’s biggest gainers, responded differently. It tightened rules around hate speech, sparking meaningful conversations among gamers worldwide.
And to pass the time during the pandemic, millions of consumers turn to KitchenAid, No. 3. It increases adoration by leveraging its Yummly food platform, with 26 million users and more than 2 million recipes, it elevates fans from mere cooks to domestic divas.
“Right now” thinking also includes launching new products and services that speak directly to the moment. These new offers go well beyond features and functionality. They address important emotive needs–and consumers reward that thoughtfulness. Chick-fil-A, No.39, is the only restaurant in the top 50. That’s a credit to compassionate introductions like family meal kits, well outside its quick-serve wheelhouse.
The most relevant brands are content juggernauts, using new agile processes, techniques and channels to create sprawling ecosystems. And these ever-growing hubs reach well beyond their central customer base, finding unexpected avenues to acquire new and potential customers. In doing so, they don’t just remain top of mind: They become constant companions.
“The best marketing and sales organizations have been focusing on speed skills for years now, reengineering both organization and culture to add more flexibility.”
Peloton, No. 2, isn’t only relevant because of its bikes, treadmills and the fact that – as gyms and fitness studios closed – people needed digital sweat sessions more than ever before. Its incredible rise started long before the pandemic and is directly linked to a smart, relationship-driven and agile content strategy, providing a constant stream of workouts, a “virtuous cycle,” built into a system that allows them to constantly retouch the content. With its commitment to supporting content throughout its lifecycle, its classes by now welcome millions of at-home meditators, yogis and weightlifters over and over again.
Coming in at No. 5 LEGO recognized the pandemic’s effect on adult’s normal social and leisure activities, the creative outlet brand for kids introduced several grown-up art projects, including Andy Warhol style murals and the Botanical Collection… LEGO also leads by creating an entire digital content ecosystem around its products, from movies to minimovie series and microsites designed around LEGO storylines, innovative tools and processes to drive customer-generated content.
The best marketing and sales organizations have been focusing on speed skills for years now, reengineering both organization and culture to add more flexibility.
These brands entered 2020 more agile than their competitors. But as events unfolded, it became clear just how essential this is. Our BRI is filled with examples of brands as nimble as ninjas, continually updating their messages and flexing their agile muscles.
Take Sephora. It rises 36 places to land at No. 33, an astonishing gain in a year where industrywide, makeup sales plunged 19 percent. Few nights out give consumers little reason to buy cosmetics, however, Sephora keeps gaining relevance, with messages focusing on beauty as a key part of self-care.
Amazon, No. 10, offers a different example. Its sales are skyrocketing, reflecting the surge in e-commerce. Yet it recognizes that many consumers question its lack of transparency around employee health. So, it’s running an extensive ad campaign explaining the many ways it is working to protect its front-line workers.
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FINAL THOUGHTS
Even amid intense upheaval in consumer behavior, marketing and selling strategies can help brands increase relevance–and revenues. To achieve uncommon growth, organizations must look for ways to deepen their relationship-driven marketing capabilities. This will help each respond to new needs and opportunities as quickly as they arise, invest in content that expands the brand’s universe and find ways to update messaging to meet the moment.
You can learn more brand implications and business insights by downloading the 2021 Prophet Brand Relevance Index®.
If you’re particularly interested in driving relevance within your marketing & sales organization, please reach out.
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Costco, LEGO and Peloton prove that the stickiest engagements build the strongest fan base.
Prophet’s 2021 Prophet Brand Relevance Index® ranks hundreds of U.S. brands on the characteristics that consumers care about the most. In the sixth edition of our ground-breaking research, we measured brands’ relevancy based on how customer-obsessed, ruthlessly pragmatic, pervasively innovative and distinctively inspired they were.
After a year of global economic and social upheaval, it’s no surprise that the rankings have shifted dramatically. Our world’s abrupt transition from physical to digital, high degrees of consumer uncertainty and an increased need for human connection have all impacted how strongly brands across all industries showed up for consumers and continued to deliver innovative experiences.
Here are three brands that led the way in the innovation stakes over the past year:
Its bike may be stationary, but the Peloton brand wasn’t, cruising in at No.2 in our Index, up 33 spots. The pandemic’s closure of workout studios and gyms definitely helped boost its brand relevance, but to get customers paying a premium for at-home sweat sessions, a fine-tuned experience was core to success. Peloton’s personalized workouts, digitally connected community and relentless in-category innovation delivered experiential excellence by enabling customers to be in unparalleled control of their health.
Peloton now has over 3.6 million users, with the average Connected Fitness subscription user clocking in 20.7 workouts a month. The brand has innovated its product line by expanding from bikes to treadmills and even commercial fitness equipment, all while establishing itself as an on-demand content powerhouse with over 10,000 classes in its digital library. Users can track every joule generated and calorie burned – and Peloton’s UX acts as a personal trainer, providing personalized “power zones” and class recommendations to optimize individual performance.
On our Index, Peloton scored highest on providing emotional connection and meeting new user needs. We see these attributes inextricably linked with the powerful, data-powered experience it consistently delivers. For consumers looking for sanctuary in a time of record uncertainty and atrophy, Peloton doesn’t just sell exercise equipment or even a good workout – it sells motivation.
Takeaway: Truly innovative brands are the ones pushing the status quo by finding new ways to engage customers in experiences that most matter to them.
LEGO zipped into 5th place, rising from No.28. As the pandemic shut schools and corralled an entire generation into at-home classrooms, LEGO unleashed countless experiences that combined play and education. Its ability to blend the digital with the physical, collaborate with innovative out-of-category players and craft experiences that make consumers feel safe and connected all helped the brand stack up high on our experience & innovation winners list.
With some 90 percent of children outside their usual learning environments, the Danish toymaker launched digital initiatives like “Let’s Build Together,” which produced thousands of hours of online content for kids. It also maintained a strong product design offensive with new toys like LEGO VIDIYO, which is AR-enabled and comes with an app to build music videos in a modular fashion.
LEGO was also unafraid to explore collaborations in verticals like fashion and multimedia, recognizing that entertainment has fewer bounds today than ever before. At the same time, it also catered to a clear consumer desire for online safety by creating kid-safe digital ecosystems through its LEGO Life App.
With these innovative pushes, it’s no wonder LEGO received top scores on the Prophet Brand Relevance Index for “engages with me in new and different ways” and “has better products, services and experiences than competitors.”
Takeaway: Innovation winners are extending their lead by finding new ways to inspire their customers, especially with innovative out-of-category partnerships.
Grocery stores got plenty of attention in 2020, but Costco made the biggest strides in relevance, rising to No. 6 from No.15. Even more impressively, it’s the first time any retailer (except Apple and Amazon) has ever appeared in the Top 10. Beyond a nice categorical boost, Costco’s north star of fair pricing, membership-based business model and simplified product matrix helped it excel in its customer experience strategy.
“Simplifying choice amidst chaos and focusing on quality products is, in an age of information overload, a revolutionary act..”
Costco is a bit of a dark horse among its peers – a low-tech, brick-and-mortar play in the age of e-commerce and grocery aisle robots. Last year, it held back on curbside pickup despite many other retailers doing so and has kept its retail experience famously streamlined, with utilitarian signage, bulk bins and nary an external ad to be seen. Yet the brand boasts a 90 percent member retention rate, thanks to its ability to double-down on the right customer segments and make each warehouse trip a satisfying haul.
Costco understands the psychology of their target consumer to a tee, enabling the brand to deliver a consistently excellent experience. Simplifying choice amidst chaos and focusing on quality products is, in an age of information overload, a revolutionary act. As a result, Costco scored highly on our Index for “lives up to its promises” and “is a brand I trust.”
Takeaway: Stay true to your brand experience “north star”, consistently delivering against this matters most to your customers.
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FINAL THOUGHTS
While the end of the pandemic appears in sight, people’s expectations of brand experiences have changed for good. Brands must be more diligent than ever by crafting strategic consumer experiences and infusing continuous innovation into their business portfolio. Those that develop more connected, emotionally compelling and pragmatic experiences will win the race to relevance, generating greater revenues – and uncommon growth.
Learn more about the brands that stood out in this year’s Prophet Brand Relevance Index®. And if you’re looking to build and maintain the capacity to innovate then our Experience & Innovation practice can help, get in touch today.
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How companies are recalculating the complex math of advertising during the Big Game. It’s riskier than ever.
The Super Bowl LV is right around the corner. The Kansas City Chiefs will face the Tampa Bay Buccaneers and this year’s match-up is all about legacy vs. new. The duel of Tom Brady vs. Patrick Mahomes. Will Tom Brady be able to win another Super Bowl and retain his GOAT status? Or will the 25-year-old star outperform him on a national stage? It will be a fascinating game to watch.
Off the field, we also see the duel of legacy vs. new as we look at the much-ballyhooed ad spots surrounding the Super Bowl. Several legacy brands that traditionally bought ad spots are sitting out this year: Budweiser, Pepsi, Coke. While other brands like Chipotle, DoorDash and Indeed are willing to get in the game and spend $5M+ for 30 seconds of airtime. Even amidst the criticism against the NFL for their lackluster response to Black Lives Matter, the controversy of physical audiences during the pandemic and viewership ratings once again on the decline, the Super Bowl is still considered the quintessential placement for U.S. advertisers.
“The Super Bowl is still considered the quintessential placement for U.S. advertisers.”
In addition to navigating these ongoing challenges, this year’s Super Bowl also brings the duel of advertising on legacy television vs. digital video to a head. Brands are increasingly aware that coveted eyeballs are turning off the television while the reach and engagement on YouTube, Twitch and other digital platforms are becoming the new prestige play. CMOs today are seeing digital video advertising deliver results and brand awareness is also functioning as a direct response.
We believe this interesting match-up of legacy vs. new highlights 3 shifts in how CMOs decide where and how they invest their marketing dollars:
CMOs are increasingly under pressure to move the needle and do it fast. Their mandate has expanded from the top of the funnel down to acquiring customers. As a result, they are continuously experimenting with ways and channels to optimize the return of their marketing investment – often challenging practices that have been considered “tried and true.” For the first time in decades, Anheuser-Busch announced that the iconic Budweiser brand is sitting this Super Bowl out. We can still expect to see ads from BudLight and the first-ever corporate spot. Regardless, this still came as a big surprise to many.
The pandemic has shifted consumer behavior. Consumers have become more open to trying new brands – even new players – forcing brands to defend their positions. As a result, CMOs are changing their approach from maximizing reach to proactively finding ways to embed their brands in consumers’ lives. This year, for some consumers, the Super Bowl will not be as important as in prior years, given social distancing. Budweiser understands this and is reportedly reallocating its Super Bowl budget to a topic that is more relevant to its audience: COVID relief in the form of coronavirus vaccination awareness efforts.
Shifting marketing strategy and execution depending on context or market conditions is not new. The best marketers have done it to raise the bar and set the standard on how to engage consumers (remember the “dunk in the dark” tweet from Oreo in 2013?). Today this is increasingly difficult as consumers expect and demand brands to be authentic. Consumers are quick to call out anything that looks and feels different or “off-brand.” With the ease and speed of social media, brands have to answer to their customers. It will be interesting to track how Budweiser executes on the COVID-19 efforts now and into the future from an authenticity perspective, at the risk of exposing the brand and hindering the return of their investments.
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FINAL THOUGHTS
Investing in a Super Bowl ad is a big decision for any marketer. Sometimes the decision is clear and compelling: by showing up to where consumers are, on the right platforms, in the right context and with authentic engagement, marketers have a better shot at maximizing the return of their investments.
But the case is not always clear and yet organizations continue to invest. Why? The culture within organizations is slow to change. Successful marketers go beyond the data to focus on aligning the mindsets and behaviors of their organizations to ensure they make the right decisions, not the decisions that have “worked” in the past. It’s a tall order.
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Our research finds that companies struggle to carve out a purpose that’s both authentic and actionable.
Businesses have been using purpose-driven strategies for years, but recent events are testing those missions like never before. Between the pandemic, political polarization and all-new virtual connections, organizations see that just having a purpose is not enough. They need one that is durable, flexible and completely human. And they realize that leading with purpose, an all-important North Star, is their best chance to stay relevant to customers and employees.
Prophet’s Purpose Diagnostic enables companies to assess the strength of their purpose in four critical dimensions, measuring whether it is…
We analyzed the diagnostic results, which now include responses from over 150 leaders in more than 20 countries, and discovered common pain points where companies are falling behind. These insights also highlight the best ways to close gaps, so companies can focus on strengthening purpose in ways that engage stakeholders, build relevance and unlock uncommon growth.
The toughest element to get right is making purpose actionable–bringing it to life in steady, meaningful ways. Overall, 28 percent of leaders reported this as the most problematic. But authenticity and the ability to share purpose are close behind.
Action is critical. If organizations can’t deliver on purpose, it doesn’t matter how inspiring, authentic or shared it is. It just becomes another empty promise. When companies fail to act, organizations lose the trust of customers and employees looking to brands to play a critical role in addressing social challenges. Purpose must be integrated into all aspects of how companies do business. It’s the way they show up in the world. This was especially true at the director, vice president and managerial level, and lower rungs in the organization. That makes sense: Those with the most accountability for how well their purpose is put into action, within a specific business area, are most likely to acknowledge weaknesses.
“If organizations can’t deliver on purpose, it doesn’t matter how inspiring, authentic or shared it is. It just becomes another empty promise.”
But developing an authentic purpose, one that feels uniquely it’s own rather than generic, is also daunting. That is particularly true in the C-suite. These executives are most likely to say their purpose lacks authenticity. They believe purpose feels less connected to their business and isn’t specific enough to their company.
And those in manager-level positions and below are most likely to say their purpose isn’t shared, likely because they have the closest understanding of how the broader organization experiences the purpose. To them, this inability to communicate purpose is as problematic as making it actionable.
There are no short cuts to strengthen and deepen an enterprise’s purpose. To function as a true North Star, a beacon that rallies all stakeholders and sparks exceptional growth, companies must continually nurture and manage their purpose. But our findings do point to specific steps to bolster each dimension.
If a company’s purpose needs to be more…
Companies must act on purpose and measure the impact of those actions. The biggest failing among our respondents is the lack of metrics. They say they don’t have direct, or even indirect, ways to measure whether they deliver. Without such a measurement, it’s difficult to assess progress.
When purpose lacks authenticity, the biggest challenge leaders face is differentiating themselves from competitors. “Our purpose is unique to our company” received the lowest score of all authenticity measures. Leaders need to drive greater relevance with their customers and employees: What does this brand do that others don’t? How does it add value to peoples’ lives? The more specific the purpose, the more relevant and authentic it is to the company.
When a purpose is genuinely shared, it’s easier to build bridges and start conversations. Whether it’s with shareholders, employees or customers, the right purpose forges a common bond. It fosters connection and demonstrates a clear understanding of what employees and customers need. Our research uncovered two fundamental weaknesses in this domain, with “Employees at all levels are familiar with the purpose” and “Our purpose cultivates a community and creates a dialogue” earning the lowest scores.
Purpose-led businesses aim to make a difference in the world. And they need to elevate the stories that demonstrate how they help society. Without consistent reinforcements of a company’s impact, employees and customers can forget what it stands for and why it matters. While just 20% of respondents said this was the most problematic area, all brands need to question whether their purpose is bold enough. Otherwise, it can’t inspire the storytelling required to spread the word. In our research, the ability to mobilize stories to demonstrate a lived purpose was identified as a key challenge.
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FINAL THOUGHTS
How strong is your purpose? Take the diagnostic today to understand where your organization may be faltering. The right purpose, used in the most effective ways, can increase loyalty and drive revenue gains. But most importantly, it leads to the future. Purpose doesn’t just help businesses decide what to do. It guides them in the best ways to do it.
Interested in strengthening your purpose and overall brand strategy? Let’s connect to see how you can unlock growth.
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How companies like Grab, Airbnb, Super Monkey and Glossier are turning purpose into brand success.
Crisis like COVID-19 is a touchstone for companies. Customers and employees are looking to their favorite brands to help solve problems, creating an enormous opportunity for companies who are purpose-driven.
But while purpose is essential for any brand today, just having one is not enough: Brands are on trial. Stakeholders are calling brands out on hypocrisy, mixed messages and failed initiatives. Even companies that thought they had a clear purpose need to prove they are investing in substantial change and not just “woke washing.”
“Customers and employees are looking to their favorite brands to help solve problems.”
Defining and living your organization’s purpose is hard. It’s messy. And it’s never-ending. But the most successful companies in these trying times will derive their purpose from shared human values, stay true to what they do and relevant to what their stakeholders need. And they’ll act on it every day.
These four companies are using purpose in powerful ways, and working hard to live it in challenging times:
Grab’s purpose started with a question – how can we empower individuals and better people’s lives and local communities through technology? This aspiration became more important than ever as the economic impact of the pandemic shook its employees, customers and neighborhoods.
Facing the crisis, Grab stepped up. On top of financial contributions to various COVID-19 community funds and meal schemes, Grab introduced over 100 initiatives that leverage its technology, ride-hailing and food delivery networks to support and safeguard its users, partners, communities and frontliners. For example, GrabCare is an around-the-clock, on-demand service enabling healthcare professionals to travel to and from medical facilities seamlessly.
Committed to empowering local communities, Grab accelerated its merchant-partner onboarding processes to help over 78 thousand small traditional businesses go online. The company also encouraged the community to help each other. Through its new “Meal for your driver” feature, Grab users purchased more than 700 thousand meals for its delivery partners and drivers. “Only when we come together and support one another, can we then overcome this challenging time together,” said Yee Wee Tang, Managing Director of Grab Singapore.
When a company’s purpose ties directly to what it does, brands feel more authentic. This becomes even more important during times of change. Airbnb exists to “create a world where you can belong anywhere.” With sweeping travel restrictions and lockdowns, the company had to pivot quickly to find new ways to express hospitality. Open Homes for COVID-19 frontline workers gave hosts an immediate way to help. And it began creating online experiences that allow guests to learn new activities and meet people from around the world. By enabling people to connect, even while stuck at home, Airbnb is finding new ways to stay relevant.
Shared purposes are not just relevant to one audience, they are felt deeply by each–employees, customers and communities. That calls for genuine listening to make sure that actions, products and services align with the values and beliefs of those stakeholders. Glossier’s purpose is “to give voice through beauty” by “leveraging the power of the personal narrative.” Throughout the COVID-19 crisis, Glossier’s most frequent request was for a product to help with increased irritated skin from repeated handwashing. Inspired by stories and comments, Glossier quickly developed a hand cream, donating thousands of units to first responders.
The company is also recognizing that obsession with that external community has a downside, leading it to prioritize the needs of customers over that of its own workers, especially people of color. When shoppers engage in racist behavior, for example, the company’s “the customer is always right” stance gets toxic. Glossier isn’t running away from that dissonance but trying to learn. The lesson? Make sure your purpose is grounded in shared human values–including employees–and take responsibility when things go wrong.
The final dimension emerges when companies demonstrate that purpose is not just an empty promise. If companies can’t deliver, it doesn’t matter how inspiring or authentic they are.
Chinese fitness chain Super Monkey is known for its exceptional community-based experiences as well as a near-perfect retention rate of coaches. The company became an industry disruptor with its innovative business models known as “Urban Spot in Motion” and drop-in classes that can be booked directly via WeChat. All of its initiatives are rooted in Super Monkey’s brand purpose of “integrating sports into life,” or making fitness accessible for everyone.
COVID-19 has put Super Monkey’s purpose to the test. The company first offered a 10,000 yuan interest-free loan to every coach, in order to protect the normalcy of their life. Two days later, Super Monkey quickly launched free live-streamed fitness classes, dubbed “Super Monkey At-Home Squats,” in an effort to deepen connection with members and encourage them to stay active. More than 170,000 people joined its first session. To go a step further, Super Monkey continued to create more innovative fitness routines so that members could encourage their family members, no matter old or young, to exercise together – integrating sports into everyone’s life.
Despite the crisis, Super Monkey has reinforced its brand purpose with action, outshining the competition. During its recent Singles’ Day sales event, Super Monkey sold store credits worth over 100 million yuan in 24 hours, a testament that Super Monkey is becoming a synonym for a fit and energetic lifestyle in China.
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FINAL THOUGHTS
Just as people look to friends, family, and government during hard times, they are holding a magnifying glass up to businesses. Customers expect companies to treat people well, engage the community and evolve to meet a changing world. Workers are questioning employee value propositions. They want businesses to put people over profit. Words and actions matter.
Companies need to ask hard questions and revisit them often. Does your purpose…
At Prophet, we help brands unlock growth– beginning with the “DNA” and purpose of their businesses. Let’s connect to learn more about how we can strengthen yours.
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Learn how brand growth moves will help you win customers and growth in the long term with these real-world examples.
At Prophet, we believe the most powerful brands are those that are “Relentlessly Relevant.” We have measured relevance through Prophet’s proprietary Brand Relevance Index and know it is a predictor of long-term growth for brands. Effective leaders recognize the power of their brand assets to support ambitious growth goals and transformation efforts.
In today’s world, as technologies evolve and consumers seek more active relationships and connections with businesses, it’s becoming more challenging for brands to maintain relevance.
So how can brands stay a step ahead of consumers and their competition? They can start by asking three key questions:
By making moves. Brand moves.
Brand strategies offer companies a foundation on which to build their purpose, but alone, strategy doesn’t build relevance. To drive profitable growth and deliver tangible impact, strategy must be put into action.
Brand moves are actions businesses make to strengthen and sustain their brand. They can help activate a strategy (campaigns, events, etc.) or bring the strategy to life (products, services, experiences, etc.) with both consumers and employees.
Think of AT&T’s Thanks® program, which brings its customer-centric strategy to life through a loyalty program with exciting benefits and perks. Or AXA’s Equitable launch event that galvanized thousands of employees around the return of a 160-year-old legacy brand.
“To drive profitable growth and deliver tangible impact, strategy must be put into action.”
Oftentimes, growth-focused brand strategy moves become a signature trademark of the brand itself. Take for instance, Gatorade’s G Series product line, which fuels athletes from warm-up to recovery, delivering on their leadership in the sports fuel market. Or Amazon’s Prime Day, an annual event with deals for Prime members, delivering on its strategy of unparalleled and expedient service for its customers.
Given that today, only 5 percent of CMOs are highly confident in their ability to impact the overall direction of the business and to garner support for their initiatives among their peers, brand moves provide CMOs the opportunity to enhance their influence within the organization and demonstrate measurable outcomes. With brand moves, marketing leaders can drive a cross-functional team to deliver on high visibility programs delivering in-market impact.
Whether it’s a business as established as Amazon or AT&T, or a startup in its beginning phases, all brands can adhere to four key principles to ensure their brand growth moves deliver effective and relevant outcomes:
Brand growth moves that embody these four principles drive significant, positive impact on a global scale.
Since the launch of the G Series product line, Gatorade has seen increases of over $2B in franchise revenue and was the only brand in PepsiCo’s portfolio to see double-digit growth over five years. And in the last ten years of AmEx Small Business Saturdays, consumers reported spending an estimated total of over $120B at local small businesses, with seven out of ten adults aware of the (holi)day.
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FINAL THOUGHTS
Companies like these and many others have used the power of brand moves to create and maintain relentless relevance and uncommon growth for decades—with proven results.
So how should your brand ensure its strategy gets off the page and out into the world? It’s your move.
Interested in learning more about how Prophet can help you turn strategy into action, creating brand moves that lead to measurable impact? Talk to our team today.
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Clarity about company values provides the only lens needed for fast, effective decisions.
“How did you go bankrupt?” Bill asked. “Two ways,” Mike said. “Gradually and then suddenly.”
This exchange takes place between characters in Hemmingway’s “The Sun Also Rises,” sitting outside a cafe in 1920’s Spain. But it could just as easily describe how large established companies like Toys “R” Us, Nokia and Yahoo! were caught flat-footed in today’s Digital Age. In fact, only 54 companies remain today from the original 1955 Fortune 500 list.
As customer needs evolve at a rapid pace and technology pushes the boundaries of the possible, “organizational agility” is increasingly critical. Organizational agility is the ability to sense and respond to the market quickly. And companies without a finger on the pulse of customer needs will see their businesses suffer – first gradually, then suddenly.
With the global pandemic, economic downturn and social justice movement, organizational agility around your purpose is more relevant than ever before. And there are a number of approaches and frameworks – from SAFe to LeSS – that are helping large organizations become smarter, faster and more responsive at scale. But while they’re helpful, they’re not enough. To transform, companies need more than just an upgrade to their org structures and processes (what we call an organization’s “Body.”) They need to reach deep into their DNA. They need purpose.
Truly agile organizations measure success in terms of their purpose – higher-level goals that are meaningful both to the company and to its customers. Purpose doesn’t just make an appearance in ad campaigns or lobby walls – it’s infused into employees’ day-to-day work. Purpose enables employees to deliver better experiences, attract talent, and create platforms for growth through new products, services and business models. And as a result, it gives these organizations a competitive advantage in the Digital Age.
To drive agility, an organization’s purpose needs to be more than just lip service. It needs to play an active role in the business. Prophet’s research report “Becoming Purposeful” found that successful, “purposeful” organizations apply their purpose to everyday operations. This helps create faster, smarter, more nimble enterprises in three important ways:
Aligning on a brand’s purpose is hard enough; it takes even more effort to put it into action. Creating purposeful organizational agility requires sustained attention to significant changes at all levels of the organization.
To start, leaders need to be clear about what the organization and its brand stand for. It needs to be authentic, unique and differentiating in the market. It needs to resonate with both customers and employees. Top to bottom, inside to out, internal and external messaging needs to be aligned.
“As customer needs evolve at a rapid pace and technology pushes the boundaries of the possible, “organizational agility” is increasingly critical.”
But purpose can’t just be communicated; it needs to be wired into the operating model. This means a sustained change management effort that looks at organizational structures, roles, policies, processes, incentives, and governance models. For example, restructuring how product teams develop and bring new solutions to market. And these changes need to be adopted by employees so that they become “business as usual.” Digging into the operating model signals that the company is indeed serious about change.
And finally, purposeful agility requires leadership. One might assume autonomous agile teams require less of senior leaders. In fact, it’s the opposite. While there is less day-to-day interaction from senior leaders, agile teams require greater clarity and strategic framing. Senior leaders are the torchbearers for the company’s purpose and strategic direction. This means that senior leaders need to be more visibly active coaches, “spiritual” leaders, and storytellers – and less of order givers and decision-makers.
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FINAL THOUGHTS
Businesses new and old are experimenting with organizational agility in exciting ways: some out of necessity, some out of opportunity. In our experience, there is no one-size-fits-all approach to organizational agility. It’s a matter of trying different techniques, with different teams in different contexts, until operating with agility becomes the new way of working. But in all cases, leadership must recommit itself to its purpose and make it the lingua franca of the organization. In this way, teams have a clear North Star when they are traversing unchartered territory, and always know the way home.
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Stakeholders are calling brands out on hypocrisy, mixed messages and failed efforts. Not all will survive.
Sixty-two percent of global consumers say their country will not make it through the current crises if companies don’t step up. Customers and employees are looking to their favorite brands to help solve problems, creating an enormous opportunity for companies that are purpose-driven.
But while purpose is essential for any brand today, just having one is not enough: Brands are on trial. Stakeholders are calling brands out on hypocrisy, mixed messages and failed initiatives. Even companies that thought they had a clear purpose need to prove they are investing in substantial change and not just “woke washing.”
Defining and living your organization’s purpose is hard. It’s messy. And it’s never-ending. But the most successful companies in these trying times will derive their purpose from shared human values, stay true to what they do and be relevant to what their stakeholders need. And they’ll act on it every day.
“Make sure your purpose is grounded in shared human values–including employees–and take responsibility when things go wrong.”
These four companies are using purpose in powerful ways, and working hard to live it in challenging times:
Citi’s purpose–to provide financial services that “enable growth and progress”–took on electrifying new meaning as the economic impact of the pandemic shook its employees, customers and neighborhoods. Citi went beyond what most banks did – loan forgiveness and mortgage relief– to not just delay devastation but truly deliver on that purpose. “Citi’s mission and purpose have long been rooted in enabling growth and progress. As the world continues to search for solutions to address the global pandemic, racism, and more, at Citi we know that our role is to identify issues to stand for and influence in order to enable relevant and meaningful progress for our clients, colleagues and communities,” said Mary Ann Villanueva, Director of Citi’s Brand Culture and Engagement.
Efforts included committing $100 million in support aimed directly at that promise of progress, launching Restarting Together to encourage startups supporting society through the crisis, helping customers secure PPP loans, and helping those most impacted by the pandemic including the World Central Kitchen and National Disability Institute and many more. Citi has also expanded beyond financial progress to support racial equality through recent campaigns and commitments to the Black Lives Matter movement, including investing in Community Development Financial Institutions, which play a vital role in low-income communities and communities of color.
When a company’s purpose ties directly to what it does, brands feel more authentic. This becomes even more important during times of change. Airbnb exists to “create a world where you can belong anywhere.” With sweeping travel restrictions and lockdowns, the company had to pivot quickly to find new ways to express hospitality. Open Homes for COVID-19 frontline workers gave hosts an immediate way to help. And it began creating online experiences that allow guests to learn new activities and meet people from around the world. By enabling people to connect, even while stuck at home, Airbnb is finding new ways to stay relevant.
Shared purposes are not just relevant to one audience, they are felt deeply by each–employees, customers and communities. That calls for genuine listening to make sure that actions, products and services align with the values and beliefs of those stakeholders. Glossier’s purpose is “to give voice through beauty” by “leveraging the power of the personal narrative.” Throughout the COVID-19 crisis, Glossier’s most frequent request was for a product to help with increased irritated skin from repeated handwashing. Inspired by stories and comments, Glossier quickly developed a hand cream, donating thousands of units to first responders.
The company is also recognizing that obsession with that external community has a downside, leading it to prioritize the needs of customers over that of its own workers, especially people of color. When shoppers engage in racist behavior, for example, the company’s “the customer is always right” stance gets toxic. Glossier isn’t running away from that dissonance but trying to learn. The lesson? Make sure your purpose is grounded in shared human values–including employees–and take responsibility when things go wrong.
The final dimension emerges when companies demonstrate that purpose is not just an empty promise. If companies can’t deliver, it doesn’t matter how inspiring or authentic they are. People pay attention to what brands do, not what they say. Walmart has long struggled with negative perceptions. But it continues to make progress through finding new ways to act on “saving people money so they can live better.”
Because of its vast size, it pays great attention to subtleties and the importance of multiple actions. Among the steady drumbeats that help all people “live better”? In addition to cash bonuses for employees, it’s closing all locations this Thanksgiving to show gratitude. It introduced Express delivery so customers can avoid crowds. It turned parking lots into drive-in theaters, showing movies for free. And in requiring all employees and shoppers to wear masks and supporting expanded testing efforts, it’s helping everyone.
Just as people look to friends, family, and government during hard times, they are holding a magnifying glass up to businesses. Customers expect companies to treat people well, engage the community and evolve to meet a changing world. Workers are questioning employee value propositions. They want businesses to put people over profit. Words and actions matter.
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FINAL THOUGHTS
Business leaders need to ask hard questions about their company’s purpose and revisit their answers often.
At Prophet, we help brands unlock growth– beginning with the “DNA” and purpose of their businesses. Let’s connect to learn more about how we can strengthen yours.
REPORT
To achieve uncommon growth, double down on cultural changes to equip your teams for the future.
For most business leaders, this is a pivotal time. The decisions being made are dictating whether you survive or thrive in these uncertain times and there is enormous pressure on leaders to step up and provide the structure, guidance and clear communication that people are looking for.
This playbook brings together some of the latest thinking from our experts to help with those decisions, from how to double down on your company culture and equip your teams for the future way of working, to understanding the new needs of your customer and making the digital go-to-market shift. It provides some actionable ideas to get your business back on track now as we move out of this crisis and for the growth opportunities beyond.
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As consumers value the basics more, companies promising simplicity and reliability have a new advantage.
Branding expert David Aaker recently launched his 17th book, Owning Game-Changing Subcategories: Uncommon Growth in a Digital Age. Associate Partner Bernhard Schaar from Prophet’s Berlin office spoke to Prophet Vice Chairman David Aaker to discuss the background of his new book, his perspectives on COVID-19 and its implications for brands and branding.
David Aaker: Growth is healthy because it brings benefits to different stakeholders. For customers, it generates reassurance and credibility and often energy and excitement as well. For organizations, it represents momentum—growth creates growth. For employees, it represents opportunity, pride in the organization and even meaning in work-life—the absence of growth can be discouraging or even depressing and job-threatening.
DA: I would highlight four main learnings.
DA: A key element to successful subcategory competition that is ignored in most innovation and strategy books is branding. I wanted to introduce brand into the arena of strategic innovation and market disruption. An exemplar brand has three jobs in addition to refining and testing the “must haves”:
DA: Branded communities are groups of people that bond because of shared involvement in some activity or interest area connected to a brand. Brand communities create or enhance brand relationships, add energy and involvement, provide credibility and build barriers to competitors. It is hard to draw a customer away from a brand community they are engaged in to another. Nike, for example, has built a strong brand community of sports lovers who share the same passion and aspirations. It has been built in part by integrating its digital platforms to connect and engage. Its agility and creativity was shown when it rapidly launched its virtual workout classes via their Nike Training Club app.
DA: Creating new subcategories has always been, with rare exceptions, the only path to real growth. But the arrival of digital in the last two decades has put subcategory creation on steroids. They are now more frequent, they grow much faster and they have more upside, by a big margin. In the digital era, a huge number of subcategories have been generated or enabled by:
DA: In the start-up world, this thinking is fundamental to their business – they are doing exactly that already. But large established firms need to prepare for this new reality by keeping up with technological development, adapting their distribution to include e-commerce and becoming good at communication in the digital age. Strategically, there needs to be a realization that the best path to growth is now owning new subcategories that change the customer experience or brand relationship.
DAa: There are a host of changes in behavior caused by the crisis – among others, people are valuing the basics more. The search for simplicity and reliability is more pronounced. More fundamentally, peoples’ values and acknowledging what is really important to them have changed. Social contacts, trust, authenticity, higher purpose and keeping safe have all been dialed up. Some of these changes will represent opportunities for new ways of serving customers.
DA: This is probably an organizational issue. Much of what we, at Prophet, talk about in management culture and digital transformation applies. The basic problem is that established businesses within big firms are generating strong profits and have financial and political control over budgets and strategies. They are really adept at operations, making incremental improvements in offerings and marketing and showing positive return for those improvements. They are also good at pointing out flaws in strategies that have not been fully developed and tested. As a result, moonshots get killed or starved.
“Uncommon growth is growth that is substantially higher than the expected growth year-to-year. It is out of the ordinary.”
A good way to move ahead is to protect the future efforts by creating a new subcategory and giving a separate budget, and perhaps even a separate organization, that physically is separated from the core organization. A flat organizational structure can also help. Additionally, a firm can work on its culture and decision-making process to allow the innovation around new subcategories to live or even thrive. The measurement of people needs to reflect a risky mission and should not be mainly geared to running the existing business well. Game-changing subcategories don’t create themselves; you need to find and promote them.
DA: In regular times, and even more so in challenging times such as today, those brands that disrupt the marketplace by creating new subcategories that are anchored on a set of “must haves” and effective exemplar brands are the ones that will continue to achieve uncommon growth. If a loyal brand community can be developed, then success will be assured.
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FINAL THOUGHTS
In the future, the successful brands, in my view, will often be those that are agile and flexible, have employed digital effectively, are truly empathic and have a higher purpose and find ways to connect with customers in a meaningful and involving way.
Want to interview Dave or feature him on your next podcast? Please connect with David Aaker directly.
Explore how David Aaker and Prophet can help your business create game-changing brands that resonate with both your customers and employees.
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Our diagnostic helps companies find a North Star that inspires loyalty and growth.
Businesses have been leaning into purpose-driven strategies for years, but recent events have tested them as never before. Whether responding to the worldwide pandemic, new ways of working, racial protests or political polarization, we’ve seen that companies with a purpose centered on shared human values rather than business goals are the ones more capable of acting swiftly and effectively. Purpose doesn’t just help these businesses decide what to do, it guides them in the best ways to do it.
This purpose is the North Star that steers actions and decision-making on a day-to-day basis. And it guides all elements of the company’s DNA, including its brands, strategy and employee value proposition.
And those without a well-articulated and actionable purpose? They’re struggling. When companies shout out hollow words on social media, customers abandon them, and brands lose their relevance. When we surveyed consumers in April, 58 percent said that in order to earn or keep their trust, it was very-to-extremely important for a brand to offer a relevant set of beliefs and values. By June, this number had jumped to 69 percent.
“When companies shout out hollow words on social media, customers abandon them, and brands lose their relevance.”
Prophet developed a diagnostic to assess how durable your company’s purpose is across four key dimensions (authentic, inspiring, shared, actionable). The custom analysis produces results that let you know where you may have a weak spot and where you might take your purpose next.
It’s likely your mission isn’t ambitious enough or has been defined too narrowly. Brands like Disney, NPR and Spotify are endlessly uplifting because their purpose speaks to shared human values; they know how their products and services make a difference in the world and in people’s lives. But even companies with a fairly pragmatic purpose can be more aspirational.
To be more inspiring:
When companies connect their purpose to the way they earn money, it makes perfect sense. Google, for instance, exists to “organize the world’s information,” which clicks with anyone who’s ever used a search engine. But when an oil and gas company misses the mark completely by saying its focus is protecting the environment, or a soft-drink brand claims to be committed to health, there’s an immediate disconnect.
To be more authentic:
The right purpose feels true and important with every audience–employees, customers and communities. It must be understood and pervasive, felt by every stakeholder. And it contributes to the overall betterment of society. For Patagonia, nothing matters more than fiercely protecting the environment. At Nike, the commitment to racial injustice, which connects so deeply with its customers and athlete spokespeople, is more believable. If your company’s purpose doesn’t feel urgent to each group you’re targeting, it’s likely the wrong ambition.
To find a genuinely shared purpose:
Of the four traits, this is the last mile. If your organization can’t deliver on its purpose–no matter how inspiring or authentic–everything else is pointless. Purpose needs to be enabled by leaders: Their actions and decisions serves as the role-model to the entire organization.
Recent months have shown what happens when purpose is just an empty promise. Those include companies parroting “We’re in this together” messages, only to be called out for endangering employees, or jumping on “Black Lives Matters” platforms, even while actively discriminating against employees and customers.
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FINAL THOUGHTS
Take our diagnostic today to see how your purpose is and isn’t working for your brand today.
At Prophet, we help brands unlock growth– beginning with the “DNA” and purpose of their businesses. Let’s connect to learn more about how we can strengthen yours.
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