In our last post, we talked about the importance of values for businesses. Strong values create the foundation for a company’s purpose, brand positioning, product strategy, and culture. Identifying and communicating those values to your customers, employees and other constituents can have a galvanizing, energizing effect on businesses.
In Jim Stengel’s excellent book GROW, he uses his extensive experience as CMO of Procter and Gamble to examine the impact of values on businesses. Stengel details the results of a study of 50 firms who had articulated very clear values, and compared their performance vs. the S&P 500 over a ten-year period. They dramatically outperformed the index by over 400% in profitability during that time. Stengel identified five Fundamental Human Values (FHV) that can provide a foundation for a company’s brand positioning. Here are the Five Fundamental Values that drive a successful organization:
- Joy and Happiness – Disney, through its theme parks and entertainment properties, creates experiences of great joy and happiness. There are other dimensions to happiness that aren’t the same euphoric feeling, but are still powerful foundations for a brand, such as peace of mind – what life insurers offer at a fundamental level. Confidence, trust, relaxation, security are all aspects of this value.
- Connection and Community – Brands that help bring people together and make them feel part of something larger than themselves. All telecom companies can be seen as fostering connection. Facebook and LinkedIn are about establishing and nurturing connections. Surprisingly, Starbucks also fits into this category. It creates a home-away-from-home for its customers, where they feel comfortable and welcome, part of something bigger than themselves.
- Curiosity and Exploration – Brands that allow people to discover and learn. In the virtual world, Google is all about finding information you seek. This is also the category for a brand like Patagonia, whose clothing and other products encourage people to discover and explore the world.
- Pride and Ego – Every luxury brand appeals to the ego of its purchaser. Carrying a Prada bag, driving a Mercedes-Benz, or wearing a Rolex are ways of expressing status and achievement. But this value is also expressed in B2B: SAP’s “Best Run Businesses Run SAP” was clearly about creating an elite status for its B2B finance customers.
- Innovation and Societal Impact – When a brand fosters creativity and allows people to do new things or do them in a very different way, they deliver on this value. Apple, Tesla, and 3M are just a few companies that are focused on Innovation and Societal impact.
In our practice, we’ve seen the impact of establishing values as well. As an example, we worked with a client in the Fintech space and helped them discovered that their software ultimately delivered on trust (Which is a flavor of happiness and contentment). Trust enabled their key decision makers to feel better about the accuracy and truthfulness of their financial statements. Providing truthful and accurate financial statements enhanced the trust that customers, partners, investors, and employees had for the organization. And when the world at large is able to trust in the financial information provided by companies, it creates a foundation on which the global economy functions with less risk.
So while you couldn’t say our client was responsible for the functioning of the global economy, you could honestly say that they were doing their part to help the global economy operate with greater transparency and trust. And the brand positioning is sustainable in an ever more complicated future, no matter how complex reporting regulations become. This idea was soon infused into its company’s communications, and its employee recruitment efforts. Trust is now a central pillar of the business, and every employee knows and understands this.
You’ll notice the Fundamental Human Values are different from what you find in most corporate mission statements and About Us pages. If you search “company values” in Google you’ll turn up insipid platitudes like these:
- Our company believes in Integrity in all its dealings. We treat our customers, employees and our partners with the utmost respect.
- We value transparency in our interactions and strive to be forthright in our communications.
- We value diversity in our work force and seek out employees who are reflective of the world of large.
These are admirable values, but they aren’t values that, in and of themselves, inspire customers to do business with the organization. People don’t buy a car because they need transparency. As we showed above, people buy a Mercedes because it gives them status. Or Tesla because they want an Electric (aka non-polluting) car. A lack of transparency may be a reason NOT to do business with a company, but not a reason TO purchase.
The Fundament Human Values are EMOTIONAL values. As we talked about previously, emotion is instrumental in decision-making, and also associated with long term memory development. If you are able to deliver on an emotional need of your customers, you’re more likely to impact their thinking and become ingrained in their memory. In the words of the late poet laureate Maya Angelou, “People will forget what you said, people will forget what you did, but people will never forget how you made them feel.”
We’ll talk more about the Fundamental Human Values in our next few posts as well. As always, tell us what you think in the comments.