Building on the insights of such books as Firms of Endearment and It’s Not What You Sell, It’s What You Stand For, this retreat/worship explores the business case for purpose-based leadership and strategy as well as the key aspects of integrating purpose into organizational planning, operations and culture.

For additional information and details, please visit our workshop page.

Mark Nepo

By Kathleen Hosfeld

Increasingly marketing must be about dialogue. In a recent article about the changing nature of marketing in the “Twenty-Tweens” (our current age),  I described three different forms of communication – information sharing, persuasion and dialogue. Information sharing and persuasion are the two forms most people associate with marketing. But the nature of business, the demands of customers and stakeholders are quickly outstripping the capacity of information sharing and persuasion alone to respond.

What do we mean by dialogue? I’ve said that it’s the type of conversation where two or more parties bring together information out of which something new is created.

Poet David Whyte has talked about this type of communication in terms of what it means to be a leader today. In a video on his website he talks about the conversational nature of reality:

“The conversational nature of reality has to do with the fact that whatever you want to happen will not happen. A *version* of it will happen. Some aspects of it will happen. You will be surprised also and quite often gladdened that what you wanted to happen in the beginning actually didn’t happen and something else occurred. Also it’s true that whatever society, or life or your partner or your children want from you will also not happen. They also will have to join the conversation.”

Whyte’s speaking engagements with companies on the conversational nature of reality have to do with what kind of leadership stance one can take in response to this dynamic. Who do we need to be as leaders to participate in the conversational nature of reality?

The same question faces organizations. What kind of stance do we need to take with our customers and partners in order to thrive in the conversational nature of reality? Many companies who have been early pioneers of collaboration and co-creation will say there’s tremendous potential return on investment from engaging in dialogue. Marketing – including communications, product innovation and more – is at its best in dynamic collaboration with customers and other stakeholders. To tap that potential we need to start from a place of strong core of identity and purpose, and then have the skills and tools to support dialogue as it scales through the organization.

The scale of dialogue takes place on a continuum of complexity. On the left side of the X axis we have dialogues one-to-one; on the right side we have dialogues one-to-thousands or even millions. On the left side of the continuum we rely on interpersonal skills and good facilitation of conversations to get to the shared creation. On the right side, we need technology platforms (crowd sourcing, social media and corporate social platforms) to support true two-way “conversation” on a mass scale.

All along the continuum, we need to be able to relax our grip on our own ideas and be open to what we can “create together.” In his video, Whyte takes issue with what he calls the “strategic” approach, by which I think he means predetermining a set of actions and getting too attached to them in ways that ignore the conversational nature of reality. I would say that the type of strategy – marketing and organizational — that actually works today is one that takes the conversational nature of reality into account. It is not static. It is not a fixed plan. Rather it’s a framework that includes a strong purpose and identity and that creates a container – much like a greenhouse – where the seeds sown in dialogue can take root and grow.

By Kathleen Hosfeld
As we approached the year 2000, Margaret Wheatley published an updated and revised edition of “Leadership and the New Science,” in which she explored themes from contemporary science and their implications for organizational life.

She wrote in a time when economic volatility seemed to be accelerating, and organizational life felt more and more chaotic and uncontrollable. How can we achieve a new sense of order in organizational life, she asked, without actual control over the infinite variables that threaten to upset the status quo every day?

Wheatley’s book never strayed into advice about management practice; but she suggested two things were essential for organizations to adapt to changing conditions and to thrive over time: a “clear center” and freely flowing communication.  My interpretation of her “clear center” is a clear and compelling purpose that draws and holds the parts of the organization together.

A decade later, our experience of economic reality continues to be volatile. Yet, the dynamics of the ordered universe continue to suggest forms and patterns that help organizations hold together in times of difficulty and thrive in times of abundance.

Purpose Has Changed
The idea of the clear center – a purpose – has continued to evolve. In 1999, if you’d asked about a company’s purpose the response would have been “to make a profit.” While that’s still often the case, an increasing number of firms see their purpose as a statement of how they would like to make the world a better place. They see their purpose as something that gives meaning to their work, and can actually drive better financial performance.

Purpose is also the foundation of strategy. Purpose and strategy working together are less a static plan than a framework of identity that allows a company to renew itself over time. Strategy adapts to changing conditions; purpose is what gives a firm internal continuity over time.  This is like what biologists called autopoiesis – the ability of a system to renew or regenerate over time.

Business Relationships Have Changed
While this sounds like a lot of self-focused organizational naval gazing, Wheatley also points out that organisms (and organizations) “survive only as we learn how to participate in a web of relationships.”  This points to two other patterns in the ordered universe, that of differentiation and of interconnection, visible in flora, fauna, and star systems. We understand ourselves in comparison with others, those we serve, those with whom we partner and those with whom we compete. This too, is an area where perceptions have changed. It is much more common today to hear executives speak about stakeholders and community partners as integral to their enterprise and its success.

Communication Has Changed
One of the things that has changed significantly since 1999 is the proliferation of different tools for two-way communication that foster evolution, adaptation and renewal.  Social media, crowd-sourcing, and other collaborative innovation technology platforms all have the potential to feed adaptive change. These interactive communication tools create the potential for significantly more communication inside the organization, as well as between the organization and its external partners.

Change Has Changed
Wheatley’s new science view focuses on organizational change resulting from external stimulus. Yet, another impetus of change comes from within. It is not the sun, rain and soil that force an acorn to become a tree.  The acorn is a system whose purpose is to become a tree. It works together with the sun, rain and soil to become a tree. So, too, in organizations, purpose serves as the platform for strategy to respond to and work with external stimulus to unleash organizational potential.  Strategy design is like mapping the organizational genome, discovering what the organization is designed to become.

Strategy Has Changed
Strategy has moved from a fixed set of decisions about specific responses to the market, to a self-organizing capacity to respond relatively quickly to market opportunities in service of purpose.  One of the fallacies of early thinking about so-called “self-organizing” in organizations was that it just happened.  Like anything else in organizational life, we’ve learned that it takes intention and attention.  In the case of strategy design this can be a fairly robust exercise in both right brain contemplation and left-brain analysis. The point is it’s not all SWOT Analyses and Action Steps.

Businesses and other organizations who are embracing these great patterns and lessons from the created world, are finding that they just simply work better. Not only do they represent a more sustainable model of enterprise, they offer more meaning and a greater sense of legacy as well.

If the answer comes back “to make money” we know that there’s a huge opportunity for unleashing the hidden potential of the firm. That opportunity lies in engaging the company with a purpose greater than money alone.

As I’ve said before, profit is important. It’s just generating profit is first level mastery. Once you’ve figured out that part of the game, the answer is “what’s next?” Service, gratitude and creating a better world — those present meatier and fulfilling challenges. They tap the potential producitivity of your best employees. Companies with a unique purpose out-perform
those who don’t according to Harvard Business Review blogger Bill Taylor, and the authors of “It’s not what you sell, it’s what you stand for.”

The book came out a while back, but Taylor provides a good update of what companies and organizations experience — and how they benefit — when they are “Different on purpose.” Check out the article here.

Looking for a resource to help you find that unique purpose and express it in your brand? Contact us.

• In what way do we create perceived value for our customers?
• What value do we create that reflects the best of our collective gifts and intentions?
• What is the unique value we can create in the market that no other company is as qualified to create?
• Which types of value creation in which we engage give us an opportunity for positive impact in a wide variety of markets or settings?

Some of you might recognize the pattern of the four-point test of the core competence model in the questions above. This model, developed by Gary Hamel and C.K. Prahalad years ago, is an enduring model for breakthrough strategy and strategic innovation.

The first question probes the extent to which we are serving the market by offering something of real value. The second question looks at who we are together as a work community; is there a cohesive sense of identity and purpose that we share?  The third question points to the unique capability that each company has distinct from any another company; what is it that we can do together that no one else can? The fourth question tackles the scope of the firm’s vision; how far does it reach, and how might it change our market, our community, our world?

Why are these spiritual questions? Spirituality taps the fullest experience of what it means to be alive, and for many of us this is expressed in relationships.   These questions help us examine the strength of our relationships with ourselves (are we deeply in touch with and expressing the essence of who we are as individuals and as a company?) and others (are we using our gifts and strengths to benefit others as ourselves through either support or challenge?).

Spiritual does not mean airy-fairy and impractical. All four of these questions can be used to advance key performance indicators and other benchmarks that measure organizational performance and outcomes.  The difference is hitching the practical, financial and quantitative aspects of business to something larger, engaging with meaningful action, and allowing the firm to be drawn upward as a result.

By Kathleen Hosfeld

Freeze and wait. That’s been the reaction of many to this time of economic uncertainty. While that works for animals who camouflage themselves in their surroundings until danger has passed, its wisdom only goes so far in the human marketplace.

This strategy assumes that the “danger” will indeed pass, and that things will “get back to normal.” Early signs, however, suggest that the old status quo has been disturbed permanently. How much consumer and corporate behavior will change for good remains to be seen. Many agree, however, that this crisis has changed them in fundamental ways.

In this time those that are thriving are doing something fairly counter-intuitive. They are moving in the direction of their hearts, and doing the things they long to do. As a result, they are stepping out of stagnant eddies into places where new energy and activity are flowing.

I recently watched a short film called Lemonade that tells stories of people in the advertising industry who used their layoffs as a call to action. By unleashing the power of what was meaningful to them, their lives and careers were redirected in important ways.

Around Thanksgiving 2009, I wrote a small blog article titled “Let the Beauty We Love Be What We Do.” It’s a challenge to counteract fear with a move toward what we love.  What do you feel called to do? Now is the time. Take your own career or your organization in a direction you have always longed to go. It may not make sense and yet it’s the right move.

Yesterday’s logic is to focus on the numbers – the numbers you can hit or the numbers you can earn. The new logic is to find the place where you can make a difference, the place that is meaningful to you, and let that energy carry you forward.

No-cost places to start include:

• Watch the Lemonade movie.
• Read the blog article I wrote and spend some time thinking about the beauty that you love.
• Reconsider your value propositions for key stakeholders.  Are they compelling to you? Do they speak to your desire to make a difference in the world?  Use our free value propositions worksheets for this exploration.
• Start a conversation in your workplace around the question: “How do we want to make a difference at this workplace, through this work, or using the assets and resources we have available to us?”

I’m interested to know what changes you decide to make. Let me know.

I’m a fan of perspectives that make sense of seemingly conflicting points of view. This is why I love PEAK: How Great Companies Get Their Mojo From Maslow by Chip Conley.

Conley, owner of the Joie de Vivre boutique hotel chain in California, writes about his own and others’ experiences in cultivating deeply satisfying relationships with employees, customers and investors (this book is a very readable compendium of stakeholder marketing ideas). His stakeholder strategies ultimately contributed to the survival of his company in the travel industry meltdown following 9/11. He based his methods on the teachings of psychologist Abraham Maslow.

“Maslow believed that human beings seek to meet base needs for sleep, water and food (physiological)” Conley writes, and that we focus on the lowest unmet need at a time. “As those needs are partially fulfilled we move up … to higher needs for physical safety, affiliation or social connection, and esteem.” Finally, we aspire to the top of the pyramid which is self-actualization.

Conley used Maslow’s hierachy to map out how his company satisfied these needs for employees, customers and investors (his key stakeholders). His book provides a wealth of detail on how his firm did this, how others have done it and how to apply this to your own firm.

So what conflicting points of view does he brings together?  Depending on your own view of human nature, as a marketer you may find yourself believing one of the following views about how to win customers: 1) customers act from their most base needs (bottom of hierarchy) or 2) customers act (or should) from their highest motivations (top of the hierarchy) and values.  This dichotomy shows up starkly in branding and advertising models, many of which assume we make all our purchase decisions with the most primitive part of our brain. There’s a tension between these and the strategies that try to sell products based on “doing the right thing,” assuming green or social criteria will make a difference. (They can and do, but sometimes not enough).

The truth that Conley articulates so well is that good marketing and good relationships address both of these polarized views and all the needs in between.

Take customer relationships for example. The most basic need a customer has, according to Conley, is that we meet their expectations. Our products and services have to do what they expect them to do. He points out, however, that this alone rarely creates loyalty or the more-coveted evangelism.  Fostering loyalty means identifying the desires customers have, which are typically desires for social connection/belonging and esteem. Evangelism comes when we offer customers the opportunity for transformation and self-actualization – to be more fully themselves, or the self they long to be.

This is solid advice for any firm that thinks it’s not tapping the full potential of its customer relationships. Start with the basics: Are we clear about what our clients expectations are for our product or service?  Are we meeting their survival and safety needs? Second, how are our relationships and interactions – do we provide warm customer service? Do we make our clients feel important and valued? Finally, do we offer our clients an opportunity to be more than just a consumer?

At Joie de Vivre, they meet the top of the pyramid by offering what Conley calls “identity refreshment.”  You stay at a hip hotel and you feel like the hipster you want to be. Through examples such as Harley Davidson, Whole Foods, Apple Computer, the high tech service group Geek Squad, as well as his own company, Conley provides numerous creativity-sparking stories and examples.  The book is packed with tips for how to apply these ideas in your own firm.  Equally valuable are his suggestions for building strong partnerships with employees and investors.

Can companies do reasonably well at the bottom or the middle of the hierarchy? Certainly. If you aspire, however, to levels of relationship that create evangelists for your brand, and resilient companies that can withstand volatile economic cycles, says Conley, you need to deliver value at all the points along the hierarchy: survival, success and transformation.

“Be the change we want to see in the world” is so often used, we have become somewhat immune to its message that it all starts with us. The place we make change most effectively is in our own lives.

As more of us seek to engage in creating economies and communities that work for all, it may be that hope associated with change isn’t enough to inspire us. We’re unclear about what changes are needed to create the world we want. The idea of change begs the issue of strategy. What will work? Which of the many issues I care about should I tackle first?

When such questions paralyze us into inaction, another approach is to move in the direction of what we love. What are we grateful for? What are we so grateful for that we want all to experience it?

The Sufi poet Rumi wrote about how the particular longings of our individual hearts shape our relationship with the Divine. In the process of spiritual becoming he said “A rose opens because she is the fragrance she loves.” We grow toward the beauty that most inspires us. We unfold more of ourselves, become more truly ourselves, as we release more of what we love into the world.

Bringing this sentiment to the workplace, to our relationships with clients, customers and other stakeholders involves taking time to ask: “What are we inspired to become? What is our highest aspiration for our work? What joy do I want others to experience?”

It’s not a simple process to bring such thoughts into practical application, and integrate them into our daily lives. But it’s an important process for this time. It means to live a life of faith. Faith in what? Faith in love. In beauty. In hope. In the basic ability of human beings to  work together to create a world that works for all of us.

In another poem, Rumi invites us to “Let the beauty we love be what we do. There are hundreds of ways to kneel and kiss the ground.” Many of us recognize that each person has his or her own unique gifts to give the world. Our individual lives can be a continual exploration of those gifts over time.

So, too, can we as companies and organizations act in service of the beauty we collectively love, and bring it to flower in the world for the good of all. When offered in the spirit of gratitude and generosity, our actions can truly be the change we seek.

~~~

The line “The rose opens….” Is from the poem Every Tree, translated by Coleman Barks in the book The Glance, Songs of Soul-Meeting, published in 1999 by Penguin Books.

The line “Let the beauty we love…” is published in The Essential Rumi, also translated by Coleman Barks, 1997 HarperOne.

~~~

Want a reminder to keep this sentiment alive in your life? Get the “Let the Beauty We Love” mug and we’ll send $5 to Kiva.org to support entrepreneurs around the world through microfinance loans.

We live in an exciting time during which companies are questioning traditional models of marketing, and are pioneering new approaches that create better financial returns. More importantly, more companies are raising the ethical bar on their marketing and seeking to earn both the trust and loyalty of the market. Stakeholder marketing is an approach that does both. It’s something that you may hear more about in the coming months.

What is stakeholder marketing?  It’s an approach that recognizes that the “market” is not just a narrowly defined customer target (or series of customer segments). It perceives that customers are interconnected with employees, vendors, government and community, the environment and more.  It’s based on the premise that in order to effectively conduct commercial transactions companies must engage with a system of interconnected partners, known as stakeholders.

In the article Transformation of Marketing, I have identified three elements of the emerging model of marketing practiced by high-integrity companies: embracing a systems perspective, creating social good, and living the brand. Stakeholder marketing is an important part of embracing a systems perspective because it engages with the marketplace as such a dynamic system. It can also reflect the intention to create social good, depending on the degree of mutuality to which the company aspires.

The intention of those who’ve practiced stakeholder marketing is to establish, cultivate and deepen positive relationships of trust between their organization and the groups directly affected by their activities. These relationships result in cooperation that helps a company further its goals. For many who practice stakeholder marketing, their goals include service to stakeholders as an end in itself not as a means to an end. Some organizations may see the value of stakeholder relationships only in terms of how they might help the organization achieve goals for growth or profit. Research indicates that stakeholder orientation in a firm correlates to improved financial performance. However, as those who have practiced stakeholder marketing will tell you, the rewards can be far greater.

In the book Firms of Endearment, the authors assert that stakeholder marketing creates such positive relationships and perceptions with stakeholders, that those who practice it spend less to get the word out and to shape public perceptions of their brand. They benefit from significant word of mouth that is fueled by customer loyalty and advocacy.

Serving Instead of Managing

A primary characteristic of stakeholder marketing is that it is not an attempt to manage or control perceptions or behavior. Rather it expresses itself in efforts to engage stakeholders collaboratively to create value together. It incorporates a strong ethic of service not just to customers but also to other partners in the value chain. The following provides an evolving series of stances that organizations can take or have taken in response to stakeholders.

Prior to the advent of the Internet, companies with the financial resources to do so could more easily control the information that audiences received about products or services. Customers and other stakeholders had neither the time nor the money to fully investigate all the companies from whom they might purchase products or services, or with whom they might work. As a result, during this time companies assumed that marketing’s role was to create and protect perceptions of the firm and its products in order to sell.

With the advent of the Internet, all stakeholders gained considerable new information about and influence over perceptions of companies, products and services. Stakeholders were better able to communicate out their experiences of a product, service or company. Other stakeholders were able to access this information, giving them information to either confirm or undermine the company’s own messages. As companies lost some of their ability to control those perceptions, marketing became somewhat more collaborative and transparent. “Managing” perceptions and key stakeholder relationships was an evolution in marketing that acknowledged the difficulty of maintaining control while still seeing control as desirable.

Stakeholder marketing takes a leap into the void by ceding a great deal of control and shifting to an attitude of servant leadership in the exchange process. According to research on companies who practice stakeholder marketing, such companies disclose more, share their standards, ask for feedback and act on the feedback they receive. A company that adopts stakeholder marketing sees innovation potential in finding ways to align stakeholder needs with its own, and has confidence in the good will, loyalty and trust that the process will generate.

Implications for Marketing Planning

How does a stakeholder orientation change marketing planning? In a traditional environment, the company takes in information (from the sales force, from research, from analysts) and uses this to formulate its marketing strategies. In stakeholder marketing, the information gathering process broadens to employees, vendors/suppliers, distributors, communities and regulators – the stakeholder groups that the company identifies as appropriate to its situation  — and continues as a form of dialogue. Gathering information from stakeholder groups, feeding this information to the right internal audiences within the company, and formulating responses are the inhale and the exhale of stakeholder marketing. This can seem overwhelming if the company does not have a clear sense of direction and mission. This is provided by clear value propositions.

Value propositions are important ordering agents in traditional marketing planning. They are also extremely valuable in helping companies align stakeholder needs in a stakeholder marketing planning process.  The process of establishing a value proposition allows a company to define what it does best and how it contrasts with competitors or substitutes. In traditional marketing, however, the value proposition is created with only one target audience: the customer.  In stakeholder marketing, value propositions created for each stakeholder group help to fully develop and articulate both marketing goals and brand values. Creating these propositions also helps identify areas that need to be aligned or reconciled. As a result, marketing strategies become more robust, and marketing efforts more focused. (See related article on value propositions.)

Is it Marketing or is it Management?

One of the tricky things about stakeholder marketing is that it is difficult to isolate the actions of stakeholder-oriented firms that are discretely marketing focused. This, of course, depends on your definition of marketing.  In the Michael Porter Value Chain model, marketing is the function of communicating and selling that happens later in the process of supposedly “creating value.”

If, however, your definition of marketing is like Peter Drucker’s – the entire company as seen through the eyes of the customer – then you believe that all departments and functions hold pieces of the marketing function, and stakeholder marketing identifies the opportunities all along the value chain to create value for all partners – not just customers.  The transformation of marketing requires the adoption of such a systems view which breaks down the silos between strategy, management and marketing.

The Firms of Endearment authors assert that companies with a stakeholder orientation spend less money “on marketing.”  Based on the case histories of the book, which include Costco, Harley Davidson, and other recognizable names, I disagree. What may more likely be true, however, is that these companies spend less money on sales and promotional efforts – such as advertising – that seek to form or build positive awareness for their goods or services.  Why? By virtue of their organizational behavior, and fostering authentic, positive relationships with stakeholders, they have earned such positive awareness. They don’t need to buy it.

As a result, I am tempted to think of principle-based stakeholder marketing as more than an approach. It’s also a philosophy of marketing that is collectively held by all members of the firm. If all company’s decisions are focused on the question of “what creates mutual value between our firm and our partners” the decisions that have the potential to benefit profit and growth can be made virtually anywhere in the organization.

Getting started. Would you like more information on how to get started exploring or understanding how to implement stakeholder marketing? I am working on another article to describe that process. Let me know what you’d like that to cover. Please contact me with your questions and ideas.

By Kathleen M. Hosfeld

The phone rings at our house on any given evening. A member of our family looks at the caller ID. “It’s Evans Glass,” he or she calls out to the rest of the house. The call goes unanswered. This is one of between four to 10 calls we receive from Evans Glass each week. We made the mistake once of talking to someone going door to door offering estimates for window replacements. When we found out that the estimate process would take two hours, we said, “No, this isn’t what we want.” We asked that they not contact us again. They have continued to call. And call. And call.

This is one of the practices that have led to another kind of call – a call to “reform” marketing. These and other common marketing practices “work” for companies – they do result in sales. However, research shows that there’s a long-term consequence associated with intrusive and coercive tactics: cynicism and resistance on the part of consumers. Studies by the American Association of Advertising Agencies and Yankelovich show that from 1964 to 2004, the number of people who say their feelings about advertising have become negative grew from 15% to 60%. Forty-five percent of consumers say that the amount of advertising they are exposed to every day detracts from their experience of everyday life (Yankelovich). Yet, companies are spending more to overcome resistance, doing more of that which created the resistance in the first place. This is a vicious, self-perpetuating cycle.

What’s to stop it? Some believe that more regulation is the answer. While regulation and public policy always play an important role in systems change, a change from within – a transformation – will ultimately reach parts of the system that regulation can’t touch. Pioneering firms have been blazing this trail for almost two decades and research is starting to show that companies that take a higher road are achieving higher returns as a result (Studies by Sisodia, Raj, Jag Sheth, and David B. Wolfe in 2007; Sully de Luque et al. in 2008; Kearney in 2009).

The Emerging Model

Consider this article an introduction to a much wider conversation about how pioneering firms are transforming marketing. To start that conversation, I’m offering a 50,000 foot level management perspective of the model of marketing that is emerging as an alternative to the vicious cycle described above. This includes sustainability and the triple-bottom-line, but this is not a model of sustainability marketing per se. It’s meant to suggest a model of marketing that is emerging in companies who have made sustainability a way of life and are continuing to evolve. I have avoided references to tactical execution and, for now, case histories. I’ve avoided elements that might be more appropriate for specific industries (hard goods manufacturers), and tried to synthesize elements that are universal to all firms.

In working with clients, I often translate assessments into “Key Issues” for the sake of simplifying what must be addressed to accomplish their objectives. Key Issues are sheltering wings under which a variety of other issues or factors can find a home. In the following diagram and text, I frame three “Key Issues” for transforming marketing, and some (but not all) of the factors they represent.

A Fundamental Assumption: The most important difference between companies that are transforming their marketing practice is their interpretation of the purpose of marketing. In traditional practice marketing is about “selling stuff.” This follows the perception of the purpose of the business, which is to create profit. In firms that are transforming or have transformed marketing, marketing is about creating value for stakeholders – not as a means to an end (profit) but rather as the end in itself. Within this shift, profit is the measurement of how well the organization is achieving that end.

Embracing a Systems Perspective - A competence required for this emerging model is the ability to navigate complexity and engage with diverse, complex, adaptive systems. In transforming marketing, this includes issues such as:

Adopting a Multi-Stakeholder Orientation – In transformed marketing, the organization enlarges its focus from stockholders to stakeholders who include investors, employees, customers, partners and society. The intent is not to “manage” stakeholders but to serve them.

Cross-Functional Collaboration – In the traditional paradigm, marketing is frequently siloed and given increasingly tactical focus. In transformed marketing, value creation for stakeholders (marketing) is everyone’s job and requires cross-functional collaboration across departments – finance, human resources, manufacturing.

Industry Collaboration and Partnerships – Organizations transforming marketing are not isolated competitors seeking dominance and hoarding information. Rather they participate in industry collaborations to advance standards or other initiatives for the benefit of stakeholders.

Reclaiming the Marketing Mix – In traditional practice, marketing has increasingly focused on sales and promotion due to an emphasis on measurement. Organizations that are transforming marketing seek to maximize stakeholder benefit through all aspects of the marketing mix (product, price, promotion, distribution/sales). These marketing decisions may not take place in the marketing department per se but through cross-functional collaboration.

Creating Social Good – A radical departure from serving simply the profit motive, to one that says profit is the measure of how much value or benefit the firm creates for stakeholders. This includes issues such as:

Purpose and Culture Founded on Ethics and Responsibility – There’s a constant focus in these organizations around “doing the right thing,” which begins with purpose and a culture that supports ethical action.

Defining Success Beyond Profit – Financial measures are insufficient determinants of success for many organizations who care deeply about their impacts on the environment, on customers, on employees, vendors and more. Whether it’s two, three, four or more “bottomlines” – transformed marketing evaluates success in more than financial terms.

Organizational “Calling” – Those practicing transformed marketing are guided by goals that serve a shared understanding of the organization’s “calling” or intent to create stakeholder (or world) benefit.

Sharing Power in Exchange Relationships – Transformed marketing seeks to create partnerships with stakeholders in which power is shared. This capacity separates these organizations from those that are merely well intentioned, yet feel entitled to cajole customers into decisions that are “good for them” or to “sell what we make” without meaningful input from the customer or market.

Living the Brand – From one perspective brands are “perceptions” that are created to influence purchase decisions. In organizations practicing transformed marketing, however, the brand IS the company, and the company lives the brand. It’s not perception. It’s reality. Branding campaigns seek to create awareness of that reality, not to create it virtually. Elements of this include:

Brand Rooted in Clear Differentiation Strategy – In transformed marketing the brand is rooted in a solid business model that articulates a long-term strategy for creating value for stakeholders distinct from that of other firms. By contrast, head-to-head competition or competition on perception alone reinforces the vicious cycle of promotion to compete, leading to ethical “trade-offs”, and a firm-centric view.

Operations Aligned to Fulfill Brand Promises – The “operational side of branding” means taking the brand deeply into every aspect of the organization. This requires translating the implications of the brand for the day-to-day functions of departments. Representative questions to ask in this process include: What type of person should we hire to reflect the brand values? How does the brand change what our office looks like? How do I need to share information with other departments in order to help them live the brand?

Commitment to Stakeholder Benefit - The “right thing to do” in a transformed marketing environment is a radical commitment to making sure all aspects of brand execution translate into benefit for stakeholders. This includes ongoing reflection and action concerning methods of creating products/services, their features and benefits, the materials they use and the transparency with which the supply chain is managed.

Continuing The Conversation

Although the era of sustainability shines a brighter light on companies who practice marketing in this way, many companies – including ours and our clients’ – have been marketing in the spirit of the emerging model for years if not decades – long before frameworks for sustainability or the triple bottom line were as accessible as they are today. As more organizations adopt social enterprise models and similar forms that blend mission and revenue creation, transformed marketing offers an approach that better fits their values.

Many of the companies who have been pioneering in this model have done so based on the intuitive conviction that it was simply “the right thing to do.” We are fortunate in this time that research, including the studies referenced above, is confirming their collective hunch that a seemingly radical commitment to marketing that works for all also turns out to be a good way to make money. Many today are trying to approach the triple bottom line from a single-bottom-line perspective. Perhaps now there’s enough empirical research to encourage such firms to explore this emerging model more deeply.

There are many stories to tell and many interrelated ideas to unpack as we continue our own exploration. We’d love to hear from you about your experiences, ideas and questions.