In the coming years, millennials are not going to buy into what you’re selling—they’re going to buy into what you stand for. They’re going to want to know, both from a product and a political standpoint: Is what you’re selling supporting what you stand for?
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An interview with Ad man Roy Spence
(...) Your book, of course emphasizes “what
you stand for,” to the extent that it overshadows competent leadership
and a solid business plan. What do you mean by purpose?
Purpose is a definitive statement of the difference you’re trying to make in the marketplace and the world. Purpose trumps everything else.
We got involved with Southwest Airlines almost thirty years ago. They were doing well, but Herb Kelleher looked at me and said, “What do we do?” And we looked and said, “Herb, if you look at the purpose of your organization—not the soft, chewy, gooey things but your hard-nosed business model—you are in the business of allowing more people to go and see and do things they’ve never dreamed of. So you’re not in the airline business—you’re in the freedom business.” And he said, “Oh, my God—I knew we were doing this, but I didn’t know that’s what we were doing.” So Southwest goes into Philadelphia to liberate the market; the employees are freedom fighters. And every decision tries to keep costs down, to focus precious dollars on what’s necessary rather than what is nice, because then they can keep fares down and uphold their purpose of freedom. That’s the power of purpose.
But
Southwest was successful before you had that conversation. Did it make
a difference to identify freedom as the company’s purpose?
I’ll tell you what purpose does: It accelerates performance. We represented Wal-Mart for seventeen years. I was at a stockholders’ meeting when Sam Walton was alive, and he said, “I think our business model is real simple: We’ve got to save people money, and if we do that, I think they can live better.” That core business model guides every discussion, through good times and bad times. Southwest’s purpose accelerated performance because we weren’t debating what business we were in or what our mission statement was. It’s OK to change advertising, packaging, slogans, and operations—everything but the purpose.
(...) Every new CEO says, “Let’s do a new mission statement,” and no one remembers them. You know, “improve shareholder value” and whatever. That’s why people are cynical: Mission statements don’t help you in tough times. They don’t keep you on track. Purpose anchors you. The purpose of the PGA Tour is to be the exception in sports, in every way; the purpose of Southwest Airlines is to democratize the skies; the purpose of Wal-Mart is to save money so people can live better; the purpose of Disney is to use imagination to bring happiness to millions; the purpose of the United States Air Force is to keep us safe from air and space and cyberspace attacks.
I think that, especially during this Armageddon, there’s going to be a renaissance of purpose; people are going to ask, “What is my company about?” Millennials are not going to work for organizations that aren’t in the make-a-difference business. Consumers are going to be looking for both values and value.
And yes, the cynics will be there. And if they don’t buy into all this, it’s OK. But I think the long-term way is to win on purpose. Then, the mission of a company is how you do it, and the vision statement is how do you see the world after you’ve done your purpose and mission. (...)
So purpose both keeps a company on track and sets it apart?
Here’s the thing: In every corporation and every politician, in every university, in every country, sooner or later, you get envy. Wal-Mart gets Target envy; Home Depot gets Lowe’s envy. You’re struggling, and you see another organization in your space. And the tendency—if you don’t have a purpose that you can articulate—is to strike out on a mission to become a worse them. So Wal-Mart introduces sushi, and it goes to New York and does fashion shows, just like Target. Purpose says: “Wait a minute; stop it; if we try to be like them, the best we’ll ever be is a worse them. It’s the best we’ll ever be. So instead of being a worse them, let’s become a better us.” Well, you can’t become a better us unless you know what us is.
If you have purpose after the dust of this financial Armageddon settles, you will begin to thrive just at the moment that others are still grasping for straws: Oh, I’ve got to hire a new CEO; oh, I’ve got to have a new logo; oh, I’ve got to have new products; oh, I’ve got to have new packaging. As Johnny Lee sang, you’re looking for love in all the wrong places. You’ve got to look for love in the difference and the purpose of an organization.
And if your policies or your products or the way you treat people inside your organization do not support your purpose, people see it. I remember a day when Sam Walton walked in and said, “We’re going to overtake Sears.” We were in folding chairs eating ham sandwiches; Wal-Mart had $20 billion less in sales than Sears. And he said, “You know what happened today? Sears just reneged on their satisfaction-guarantee policy.” Well, that satisfaction guarantee was the core of the company; it dated back to when it was a catalog company. And Sears never recovered. (...)
You advise companies and leaders to aim high in
developing and naming a purpose because if you shoot too low, it will
be dismissed as an unworthy purpose.
Well, I also say in the book not to aim too high or you’ll be left up in the air. You have to find the middle: If you aim too low, it becomes just a tactic; if you aim too high, the B.S. buzzer goes off. If someone comes in and says, “Why don’t we be in the save-humanity business?”, everybody will say, “Oh, I’ve got to go to lunch.” You want it to be authentic and real.
But high is better than low. Years ago, Jim Collins and I did our first purpose work with the University of Texas, and we interviewed everyone: faculty, deans, alumni. At the end, we presented it to this huge, diverse, opinion-rich audience, and we said, “This university has a purpose. We’re not in the teaching business; we’re not in the tenure business; we’re not in the research business; we’re not in the fund-raising business; we’re not in the endowment business; we’re not in the bricks-and-mortar business. We are in the business of transforming lives for the benefit of society.” The room was quiet, and this one old, cynical, hard-nosed teacher—a guy with a flattop who never said anything at big meetings and was retiring that year—had tears coming down his face. And he stood up and said, “I wish I had known that was the business we were in. I thought I was just here to teach math.” (...)
The companies that are going to win in this marketplace will have a combination—what Jim Collins called “the Genius of the And”—of value and of purpose. But you’re either going to be trying to find the anchor of purpose or you’re going to be grasping for straws. There’s not going to be anybody in between.
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These are only a few excerpts from an article published in the March/April issue of The Conference Board Review.
Read full post here.
