The difference between a company's mission, vision and purpose
These words are often used interchangeably. Purpose, however, goes beyond mission and vision. Here's why, and how to define it
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In every category, hundreds of brands compete for our attention. Perhaps half-a-dozen are tried, and only a few earn our loyalty. For example, many famous brands, such as Dell, HP, Toshiba, Samsung, Sony, Lenovo and others, sell electronics. Surprisingly, they don't have a cult-like following that Apple enjoys. Do you know why?
Well, the answer is given in the third-most popular TED talk of all time: “How Great Leaders Inspire Action.” In this epic TED talk, which has received more than 50 million views, British author Simon Sinek shares his idea of the Golden Circle: Why? How? What?
By why, he means purpose. By how, he implies a process. By what, he means what it is that you do. He says, "People don't buy what you do. They buy why you do it."
In today's super-competitive world, merely highlighting the functionality and features of an offering is not enough. Brands have to develop unique relationships with their audience, and purpose plays an instrumental role in that. If a company talks about its purpose, it attracts employees, customers, partners, influencers, etc. who believe in it. People don't look up to Apple as a computer, music player or phone company. They look up to Apple as a company that likes to challenge the status quo, and by associating with Apple, they belong to a cohort that represents something special.
As per research by Kantar Consulting, over the past 12 years, businesses with a high sense of purpose have experienced a 175 percent increment in brand valuation. Besides, according to a report by Accenture, 63 percent of customers want to associate themselves with brands that stand for a purpose, reflecting customers’ own values and beliefs. Interestingly, in 2018, Unilever’s 28 purposeful brands grew 69 percent faster than the rest of its business. Also, they contributed to 75 percent of the company's overall growth. Alan Jope, CEO of Unilever, said, “In the future, every Unilever brand will be a brand with purpose."
Sometimes purpose, vision and mission are used interchangeably. However, purpose goes beyond the vision and mission:
» Purpose means why a brand exists (the impact it wants to make). For example, the purpose of Southwest Airlines, the company says, is to connect people to what's important in their lives through friendly, reliable, low-cost air travel.
» Vision means what a brand aspires to be. For example, the vision of Southwest Airlines is to become the world's most loved, most efficient, and most profitable airline.
» Mission means how a brand will achieve its objectives. For example, the mission of Southwest Airlines is dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride and company spirit.
The most important thing about a purpose is that it makes sense to both head and heart, is relevant to the target audience, and is differentiated from the competition. For example, EY and Deloitte are among the largest service providers in the accounting industry. Although they provide similar services, their purpose is different. The purpose of EY is building a better working world, and the purpose of Deloitte is to make an impact that matters.
There are many benefits of having a brand purpose. A few of them are:
Along with many other activities, the company has manufactured and donated alcohol-based hand sanitiser to hospitals and frontline workers around the world. Suppose you think in terms of factors like the top of the mind recall, reputation score, customer perception, public admiration, etc. AB InBev would have perhaps moved up in the ladder.
The company’s purpose challenges it to put the needs and well-being of the customers first. As a response to this crisis, the company recalled 31 million bottles of Tylenol capsules and offered replacements free of charge. Within two months, the brand was back in the market and regained substantial market share by the end of 1983.
Once your brand has the foundation of purpose, you will keep learning about the challenges of customers, upcoming trends in the respective category, and, accordingly, develop unique strengths and differentiated offerings to serve your customers that will eventually lead to profits.
(Views expressed are personal)