They don’t get there through vision and mission statements. When you strip away the platitudes from those documents, what’s left typically boils down to: “We want our current business model to make or keep us the leader of our current pack of competitors in current and immediately foreseeable market conditions.” This is a formula for mediocrity. It aims too low, locking an enterprise into a business model based on the agenda of the business, not that of the customer. If such a statement mentions the customer at all, it’s the customer as seen from the company’s point of view and in terms of the company’s agenda.
Truly sustainable business models are linked to fundamental human values — an ideal of improving people’s lives. This clarifies the business’s true reason for being, which in turn supports open-ended processes that can drive many different business models in succession. The model will, after all, have to change with market conditions, and the only sure basis for creating viable business models over the long term is when a business and its customers share an agenda. To hit higher targets and get and stay in front of the competition requires an ideal.
Procter & Gamble had a remarkable run in the first decade of the 21st century. But in 2000, it was in big trouble, having recently lost $85 billion in market capitalization in only six months. Its core businesses were stagnating, and its people were demoralized.
A.G. Lafley, then the CEO, asked me to take on the role of global marketing officer to help transform the culture of the company to one wherein “the consumer is boss.” I jumped at the challenge, and proposed building the best marketing organization in the world — attracting the best talent; focusing on growing the market share of the majority of our businesses; and making our marketing known, recognized, and admired by all the people important to P&G’s future.
To hit these big targets, we needed an even bigger goal: identifying and activating a distinctive ideal (or purpose, as P&G dubbed it). We would improve people’s lives; that would be the explicit goal of every business in the P&G portfolio. We could then establish each business’s true reason for being as the basis for new growth, and we could link them all into a strong foundation for P&G’s recovery by building each business’s culture around its ideal.
Every P&G business had to communicate its ideal internally and externally. A.G. Lafley and I and the rest of the senior management team expected each business leader to articulate how each brand’s individual identity furthered P&G’s overarching mantra of improving people’s lives. We also had to model the ideal ourselves. And we had to measure all our activities and people in terms of the ideals of our brands and the company as a whole. The success of that effort brought P&G’s extraordinary growth from 2001 on.
The business case for brand ideals is not altruism or corporate social responsibility. It concerns connecting what happens inside a business with what happens outside it, especially in the “black box” of consumers’ minds and the way they make decisions. If you’re willing to align your business with a fundamental human ideal, you too can achieve extraordinary growth. Imagine the possibilities that creates for you, your people, and your community.
- Jim Stengel is the former global marketing officer of Procter & Gamble and is a consultant to senior management and an adjunct professor at the UCLA Anderson School of Management. This article is excerpted from his book, Grow: How Ideals Power Growth and Profit at the World’s Greatest Companies (Crown Business, 2011).