What if doing good were good for profits?
Ed note: This is a reprint of my LinkedIn “Thought Leader” post from October 9th. To follow me on LinkedIn, click here.
In Oliver Stone’s Wall Street 2, Gordon Gekko is no longer proclaiming that greed is good, but promoting Is Greed Good?—his book exploring the excesses of the financial industry. In my opinion, the answer today is that “Good is Good.” In fact, were I to give advice to any young entrepreneur, I would encourage him or her integrate sustainability and ideals into whatever they were selling—not just for moral reasons, but also for profits.
Over the past decade, CSR initiatives have moved front and center, defining brands, business models, and even products. I picked up on this trend in 2007, leading me to publish an op-ed in Le Monde on what I called Products with Social/Societal Added Value. I predicted that we would only see more products with an integrated CSR element in the coming years and with a stronger emphasis on ideals.
This phenomenon came to head during the London Olympics where for the first time in the brand’s history, Procter & Gamble aired a campaign promoting all their brands under a solid ideal: Proud Sponsors of Moms. Through a series of moving ads, P&G demonstrated that even market leaders like Tide, Duracell, and Pampers needed more than just product attributes—they needed ideals.
P&G’s shift towards a more corporate ideal-based communication must please Jim Stengel, a former Global Managing Officer at Procter. In 2008, Stengel left Procter & Gamble to do research with UCLA’s Graduate School of Management—his 2011 book Grow: How Ideals Power Growth and Profit at the World’s Greatest Companies is the result of this research. Grow posits that businesses that have strong ideals are and will be market leaders. This hypothesis is backed up with data analyzing the performance of 50 megabrands that are defined as having “created meaningful relationships with people” through brand ideals. Analyzed over a 10-year period, these brands were shown to be higher performing than the brands on the S&P 500. Grow’s great merit is that in addition to walking the walk, and lauding a few examples of socially responsible ideal-driven corporations, it talks the talk and shows that in terms of a bottom line, brand ideals help brand performance.
In addition to Jim Stengel’s excellent analysis of this phenomenon comes Who Cares Who Wins: Why good business is better business by Havas CEO David Jones. Jones adds to Stengel’s analysis stating, “In the coming decade, businesses that are the most socially responsible will be the most successful.” I was particularly in agreement with his case studies of the Pepsi Refresh
Project and Gatorade Replay operations as examples of social media campaigns that had strong ideals at their core. I can speak for my agency when I say that TBWA\ was thrilled to work with such disruptive clients who were willing to take risks in the name of values.
Ideal-based companies continue to inspire and flourish. Patagonia, founded in 1972, continues to promote sustainability through their Common Threads initiative that encourages customers to return worn-out gear to the store to be recycled. Likewise, Ben & Jerry’s Ice Cream has publicly taken a stand with the Occupy movement. What is most heartening is to see the influence that these ideal-based business models have, not only on today’s young brands (I am thinking of Innocent drinks and Method cleaning products), but also on market Goliaths like P&G, Unilever, and Mars. From the “Proud Sponsor of Moms” to Dove’s “Campaign for Real Beauty” to Pedigree’s Adoption Drive, major players are getting in on the game.
I hope that Jim Stengel will update the findings that he published in Grow in the years to come. We cannot predict the future, but in my opinion, the smart money is on the companies that combine good ideas with strong ideals.
(cover image: 123rf.com)