Brand purpose, or the reason a brand exists beyond making money, has become prevalent across the corporate landscape. Some of the world’s largest brands like Unilever, Lloyds Banking Group and GSK have embraced purpose to help them recruit talent, get closer to customers and engage their employees.
Despite how common purpose has come, the world’s largest consumer technology brands are yet to embrace it. This has posed a question to us; do the world’s largest tech brands really need to have a clear purpose to be successful?
The answer, on the face of it, is no. Many technology brands haven’t embraced purpose to the same extent as other of the world’s largest businesses. The Radley Yeldar 2018 Fit for Purpose index confirms this. Google is at 80th place and Facebook is 75th. Apple and Amazon are not represented in the index at all. Despite this, brands like Apple, Amazon, Google and Facebook are consistently ranked as the world’s most valuable brands.
But there is an interesting exception to this: Microsoft. Up until 2014, Microsoft was seen as a fading consumer tech brand. They missed the boat on smartphones. Sales of PCs, the organisation’s primary driver of revenue, were slowing. This can perhaps be attributed to the business’ original purpose – ‘to have a computer on every desk’ – having run its course. Computing was now not only on everyone’s desk but in everyone’s hand.
>See also: The need to embrace a truly digital world
In 2014, Satya Nadella took on the CEO role and re-invigorated the business with a new sense of purpose. The purpose he introduced, ‘to empower every person and every organisation on the planet to achieve more’, is a natural evolution of the business’ original purpose.
This has had a profound impact across the organisation. The stock has risen nearly 200% since he took over and has achieved an all-time high. During his leadership, the business has established a leading position in the cloud computing market, PC sales have recovered, and the organisation has rediscovered its confidence through breakthrough products like Hololens and Surface.
In 2014, people were writing Microsoft off as irrelevant. Since then, its share price has grown faster than Apple and Google/Alphabet and just as fast as Facebook. This is as a direct result of a new CEO and a renewed sense of purpose.
>See also: The CIO’s role is changing – here’s why
Microsoft’s journey over the past 10-15 years proves how powerful a purpose can be and there are a couple of lessons to be learned. Firstly, it shows that a brand that doesn’t have a clear purpose, or loses its founding raison d’être, risks fading into obscurity. Secondly, purpose is an undeniably powerful tool for all brands and the benefits it brings have been felt by Microsoft, Unilever and everyone in-between.
Back to the question we’ve been thinking about. Apple, Google and Amazon prove that you can be successful without having a clear social purpose at the heart of the business. But Microsoft proves that, whatever sector you’re in, the right purpose can drive value in your business. It keeps your brand focused on the reason you exist and you remain relevant to your customers, investors and the world.
Sourced by Matt Gibbs, Analyst at Radley Yeldar.
