The Role of Corporate Purpose and Values

Corporate values and purpose have taken center stage in the business world in recent years. This has happened for several reasons, among them the rise of investors, job seekers, employees, and customers who increasingly choose to do business with companies whose values align with their own. And as Gen Z become more affluent and influential, corporate purpose and values will become even more important.   

Recently, Patagonia cast a spotlight on the role of corporate purpose and values when billionaire founder Yvon Chouinard announced the transfer of the company’s ownership to a trust and a non-profit organization dedicated to protecting the environment. Patagonia has always embraced the protection of the planet as part of its purpose and values. Chouinard’s was an extreme measure that essentially banked the entire company’s future on its purpose and values.  As a result, we’ve seen a surge in public conversation about just how far companies should push their values and purpose.  

To wit: should everyone take the Patagonia approach? Is it time for all of us to reevaluate our corporate purpose and values? Do we believe in them enough to take the Patagonia approach, or are they just sentimental? Are they strong enough to help guide your company through the next unforeseen economic downturn – or are they just a pipe dream from the marketing team? 

What we are seeing now is that brands are acting – for good and for bad – based on their values. Values and purpose are now as much of an asset as they are a liability depending on how a brand applies them. They are an asset if the brand can apply them in a positive way to help attract the right type of talent, evaluate who they do business with, and use them as a north star when times are both prosperous and turbulent. They are a liability if a brain fails to integrate them completely, such as when employees, customers, and investors call out a brand whose actions do not align with their values. 

It’s time to revisit these guides, and make sure they align with what is material to any business – and at the heart of its core and leadership.  

What are a brand’s purpose and values? 

Purpose is your “why” – why you exist. Our purpose is to create, amplify, and optimize meaningful communications with audiences across all digital channels (read more about that here). Purpose is especially important in uncertain times, when morale is low, or when trends and distractions present themselves, purpose is what brings you back to your core capabilities as a business, “what you are here to do, why you exist.” 

Values are the directional guides to help you stay focused on your purpose. They constitute the beliefs that help direct a company’s actions each day. They are not necessarily the beliefs that make a company’s people “do good.” For instance, Investis Digital’s values are Measure Success, Keep Innovating, Inspire Greatness, Bring Passion, and Embrace Clarity. These values help guide our business decisions and can also serve as a moral compass, but more importantly they set expectations for our work. 

Values and purpose must support what is material to the business 

Values and purpose must be in harmony with the overall objectives of the business. As a supporting measure for long-term sustainability, to be genuine, they must be tied to a material aspect of the business. Put another way, purpose and values need to support a business sell goods or services to make a profit. They need to help publicly traded firms sell goods or services to make a profit – and provide a return on investment to shareholders, too. Without profits and a return on investment, a business isn’t in business – it’s in the non-profit sector. 

Patagonia’s stated purpose is to save the home planet, and its core values comprise “building the best products, causing no unnecessary harm, using business to protect nature, and not bound by convention.” Patagonia has managed to align its purpose and values with its operations for years, including how it sources and manufactures its products in an eco-friendly way. Patagonia has succeeded financially because its purpose and values have connected with an increasingly eco-friendly consumer – not because its purpose and values are “correct.” Had Patagonia failed to connect with consumers who shared the company’s ethos, the business would have suffered. 

It's a common misconception that “purpose” means being purpose-driven, or supporting the betterment of society and the planet. In Patagonia’s case it is, but this is not true for every brand. For example, Apple, one of the world’s most valuable brands, exists to create products that enrich people's daily lives. As CEO Tim Cook said in 2019, “We believe that we are on the face of the earth to make great products and that’s not changing.” Now, Apple does a lot for the betterment of society and the earth, including a sustainability program. But Apple’s core focus is the design of a great product, and this focus has served the company well.  

Values and purpose must hold true in good times and bad times 

What makes Patagonia’s action especially impressive is that the company is operating amid an economic downturn. It would be tempting for Patagonia to ease up a bit and focus on improving its financial results right now. But instead, the company doubled down on the purpose and values that made Patagonia succeed in the first place.  

The worst thing a business can do is allow a downturn to make you abandon your brand values. If ESG is central to your narrative, if anything you should double down on ESG, not run from it. Gen Z investors in particular will call you on it if you send a message that your brand values only matter during prosperous times. And investors in general will become confused if a business flipflops during hard times, which will undermine their confidence in the business.  

If innovation is central to your purpose and values, don’t get conservative and play it safe when times are tough. Continue to invest in innovation.  

Businesses need to re-examine their purpose and values periodically 

Purpose and values are not written in stone. There are times when a business should re-examine what it stands for and why it exists. Those times include when a business is undergoing a merger, launching a fundamentally new product or service, or responding to a shift in the values of its customers and job seekers. In doing so, businesses need to be strategic. They should ask questions such as: 

• Do they support the business? 
• Are they material to your business?  
• Are they broad enough for interpretation?  
• Are they too broad for application?  
• Are they specific enough to enable decision making?  
• Are they genuine?  
• Are they externally and internally published? 
• Are they measurable?  
• Are they understood by your employees?  
• Are they understood by your audiences?  
• Do employees use them to make decisions on behalf of the business? 
• What are the potential risks with your values? 
• What are the potential benefits of your values?  
• What will you have to turn away from by embracing your purpose and values? Say no to? 
• How will you respond when employees don’t live up to those values? 
• What can you say yes to?  
• Do you have case studies that support your values in decision making?  

Netflix recently re-examined its values amid an employee outcry over the company featuring entertainment and content that offended them. The company needed to respond to employees who were boycotting content such as the controversial The Closer, hosted by Dave Chapelle. As a result of this process, Netflix re-iterated its embrace of artistic expression as one of its values. 

Artistic expression is essential to Netflix because to limit artistic expression means limiting the content it shows, which limits its audience, which limits its ability to earn revenue. So, Netflix ended up publishing a manifesto of sorts in which the company underlined the importance of free expression. The company invited employees to leave if the company’s values clashed with their own – quite a bold move, but sensible.   

Articulating purpose and values is not easy – but it’s rewarding 

Investis Digital recently conducted a survey with Forrester Consulting to understand how well businesses articulate their brand values. Only 25 percent of businesses we surveyed rate themselves as very effective at consistently managing their brand values across digital channels. In addition, nearly 40 percent of businesses said that they don’t even actively manage their company brands through digital channels at all. 

As a result, businesses struggle with problems such as sending muddled messages to the market. On the other hand, the brands that figure out how to manage and share their brand values realize benefits ranging from an increase in sales to an improved reputation. 

Brands that clearly communicate their values across channels experience benefits ranging from improved reputation to enhanced retention of employees, customers and shareholders. According to the study with Forrester, more than half of businesses see an improved reputation as a result of consistently communicating their brand values, and about half see an increase in sales/revenue. 

In fact, we work with businesses to build stronger, more valuable brands by articulating their purpose and values across their digital estate. This process does not happen without hard work and a strategic examination of the core business. It requires doing things such as: 

• Auditing your brand values with the help of a tightly integrated team. What are your values, exactly? Has anything happened recently to update them, such as a merger or expansion into new markets? 
• Examining each touchpoint in all your stakeholders’ journeys, from customers to job seekers to investors. How many devices and touch points do they use through the journey from awareness to conversion? Where do they spend most of their time interacting with you? 
• Auditing all the messages you share with your shareholders from one channel to the next. Look at your brand from their viewpoint. Do your messages reflect your purpose and values? And is it evident that you demonstrate that you live your values wherever a stakeholder might encounter your brand? 
• Listening closely to get a read on what customers, employees and shareholders think of your brand. Perform sentiment analysis and conduct surveys of each type of stakeholder. Then look for disconnects in your brand story. 

The steps above are foundational. But they’re an important start. 

Contact Investis Digital 

To learn more about telling your brand’s story in the digital age, contact Investis Digital. We can help you share your purpose and values credibly through our Connected Content approach.