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How having a higher purpose feeds the profit line Add to ...

Grow: How Ideals Power Growth and Profit at the World's Greatest Companies

By Jim Stengel

(Crown Business, 322 pages, $31)

*****

When Motorola Inc. split into two companies in January, 2011, the glamorous consumer technology side of the business became Motorola Mobility. The other half, which had long served government, public safety and business enterprises, seemed like the forgotten sibling. Rechristened as Motorola Solutions, it had no spark.

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Its solution was to focus on its core ideals, beginning with posters highlighting heroic “moments that matter,” when Motorola technology played a key role in an emergency. One poster showed a festival in England and told how a child had disappeared, a father was frantic and how, thanks to a police officer’s Motorola MTH800 radio and the company’s Airwave network, they were reunited within minutes. The posters evoked pride and a sense of identity for staff, resonating deeply with them and customers who saw the posters in company offices.

The poster campaign exemplifies how companies can engage their staff and the public when they drill down to find the ideals at the heart of their product or service.

“If you want great business results, you and your brand have to stand for something compelling,” Jim Stengel, former global marketing officer for Procter & Gamble and now a consultant, writes in Grow: How Ideals Power Growth and Profit at the World's Greatest Companies.

In 2006, Mr. Stengel was determined to find out which companies were growing more quickly than P&G, and why. He expected to pick up some tactical tips that he could use to supercharge his brands.

What he learned was more powerful than that, hugely strategic and totally unexpected: Businesses driven by a higher ideal – a higher purpose – outperformed their rivals by a wide margin.

Mr. Stengel began by studying growth over a five-year span, but later updated his research to a 10-year period (2001-2011), which included periods of economic boom and bust. He identified 50 brands with extraordinary growth, which expanded three times faster than their rivals.

They ranged from fast foods (Chipotle) to bottled water (Aquarel), soft drinks (Coca-Cola) to luxury apparel (Hermès), personal care (Natura) to electronic payments (Visa and MasterCard). All 50 brands had an ideal of improving life in a way appropriate to their category.

He found that their core ideals fell into five areas of fundamental values:

Eliciting joy: The brand activates experiences of happiness, wonder and limitless possibility. Examples: Lindt chocolates, Moët & Chandon champagne, Zappos online shoe retailer.

Enabling connection: The brand enhances the ability of people to connect with one another and the world in meaningful ways. Examples: Research In Motion’s BlackBerry, FedEx, Starbucks.

Inspiring exploration: The brand helps people explore new horizons and undergo new experiences. Examples: Amazon.com, Apple, Discovery Communications (operator of the Discovery Channel).

Evoking pride: The brand gives people a feeling of increased confidence, strength, security and vitality. Examples: Calvin Klein, Jack Daniel’s, Mercedes-Benz.

Impacting society: The brand affects society broadly, which can include challenging the status quo and redefining business categories. Examples: Dove beauty products, IBM, Sensodyne toothpaste.

“[I] your business or brand is not serving an ideal in one of these five fields of fundamental human values, you’re likely not positioned for significant growth,” Mr. Stengel argues. Companies must look at their brand and product and determine which ideal it might connect with in customer’s minds.

Highest-growth businesses are run by leaders who are determined to make a positive difference in people’s lives, Mr. Stengel says. They might be viewed as business operators who get things done, but they are also artists, whose primary medium for artistic expression is an ideal.

Such leaders are creative and driven by more than the bottom line. Effective leaders must understand whether their strengths are those of a business operator or a business artist, and find a colleague who can fill the other role, he says. At Apple Inc., for example, the unparalleled artist, Steve Jobs, teamed with chief operating officer Tim Cook, who worried about operational details.

The idea that purpose is vital to business success is not novel. But Mr. Stengel gives it statistical heft with his research, and depth with his exploration of top companies driven by ideals (along with fascinating stories from his own front-line experiences). He also provides a road map of five essential steps to build a business that will grow through ideals. Grow is an easy-to-read, inspiring book.

Postscript

In Great Leaders Grow (Berrett-Koehler, 128 pages, $25.95), prolific author Ken Blanchard, whose books include The One-Minute Manager, and Mark Miller, vice-president of training and development for fast-food chain Chick-fil-A, offer a fable about a young man entering his first job who, with the help of a mentor and the inspiration of his recently deceased father, learns how to become a leader for life.

The four-step formula is to gain knowledge, reach out to others, open your world to new leadership and life experiences, and walk toward wisdom through feedback and self-evaluation. The lessons aren’t novel, but the story is inspiring, perhaps in particular to people in their first years in the work force.

Special to The Globe and Mail

Harvey Schachter is a Battersea, Ont.-based writer specializing in management issues. He writes Monday Morning Manager and management book reviews for the print edition of Report on Business and an online work-life column Balance.

E-mail Harvey Schachter

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