The New Business Strategy: Purpose

September 29th, 2011 by Paul Keegan

Why is this ad exec and co-founder of The Purpose Institute walking across the country?

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The Responsibility Project

Roy Spence, 62, is an advertising executive and co-founder of The Purpose Institute of Austin, Texas, a consulting firm that helps organizations discover and live their “purpose,” which Spence defines as “a definitive statement about the difference you are trying to make in the world.” A clear purpose makes companies more responsible, Spence says – not only to shareholders but also to employees, suppliers, customers and their local communities – and creates a more sound and profitable business strategy. He is co-author of the Wall Street Journal bestseller It’s Not What You Sell, It’s What You Stand For: Why Extraordinary Business Is Driven By Purpose and co-founder of GSD&M Idea City, a marketing and advertising firm that has worked with Southwest Airlines, Walmart, DreamWorks and BMW. In 2007, Spence began a project to walk across America and take a picture of something good every mile to “celebrate the goodness of America.”

What made you decide to walk across America?

I was watching the TV news one day and all it showed was people killing each other, committing crimes, and I thought, “That’s not the America I see.” So I decided that as a marketer and someone curious about America and her specialness, I was going to walk across the country to see for myself. I got a pedometer and started training. I started in Hart’s Location, New Hampshire, and walked 10-12 hours a day, stopping at inns along the way. I made it through seven states in 27 days and reached Skytop, Pennsylvania. When the financial crisis hit, I took a break; I’ll probably start up again this fall.

What good things did you find?

One day I was about 10 miles from Poughkeepsie, New York, when I came to an old house with a big yard. They were having a yard sale. An older couple was moving out, so it was a very emotional scene, and I listened to their stories. The old man had worked with the local fire department for 33 years. After we’d talked for a while he said, “I have something for you.” He had Parkinson’s and walked with a cane. It took him a long time, but he finally came back and said, “Open your hand,” and he gave me a button that said, “I Love New York.”  He said it came from Ground Zero, after 9/11. He said, “I was waiting for someone special to give this to. Put this on your shirt and you will never be harmed.” I get choked up just thinking about it. I have a hundred stories like that.

How does the walk relate to your work with The Purpose Institute?

The walk and the Purpose Institute are both on the same road – one is a physical road, the other is a business road, but both are inspiring people to follow goodness, passion, and purpose. At the institute, we don’t just motivate you; we give you a roadmap showing you how to get there. We’ve worked with Walmart and Whole Foods Market and even nonprofits like the American Red Cross, helping them to better fulfill the purpose of their organizations.

In a recent speech, you said, “People who are not in the business of improving people’s lives will eventually not even be in business.” Can you explain?

When founders start a business, 90 percent of the time, it’s to fulfill a dream. Yes, they want to make money, but what they really want is to make a difference, whether they’re making cupcakes or computers. Then they get bigger and have a board of directors and investors, and they stop talking about making a difference and start talking about making money. That was the life cycle of companies, pre-Internet. But consumers now know everything. If you don’t treat employees well, and your core business is not trying to improve the lives of your customers, then customers will find a company that is.

For instance, we did the “Bags Fly Free” ad campaign for Southwest Airlines. The company said it would not start charging for checked bags, like other airlines did, because that would be a violation of what it stands for. They lost millions in revenue from not charging for bags, but they gained $900 million in market share by bringing in so much new business. Customers rewarded them for standing up for what they believed. So they were using purpose as a competitive weapon. If you don’t, you’re being naïve, because consumers really want to know what a company stands for.

How did working in advertising help you arrive at your insights about purpose?

I never thought of myself as being in the advertising business. We just wanted to do whatever it took to build a client business, to help companies achieve their goals. Advertising was the tool, not the trade.

Is there a danger that companies will talk about purpose simply as a way to seduce consumers or rationalize their behavior? A liquor company may think its higher purpose is helping people have a good time, but of course there’s a darker side, too.

Great question. The beauty of free enterprise is that it’s a voluntary transaction. You don’t have to work for my company or buy my product; I’m not going to make moralizing judgments. I’d rather flip the coin and look at the dark side of individuals rather than companies. Some companies destroyed themselves during the dot-com boom because the people running them were self-absorbed and self-focused. On the other hand, we helped a major diaper manufacturer realize it could ladder out of the diaper business and into the child development business. The better the diaper, the better the baby sleeps, the more healthy the baby and mother will be. That way of thinking helps companies inspire their employees, and motivates them to do the right thing.

Do you find resistance from companies when you talk this way?

I recently asked a CEO what business he was in, and he said, “We’re in the business of making money for our shareholders.” I said, “This is 2011; there’s only one organization in the business of making money today and that’s the U.S. Mint. You have to make a difference to make money!’ He was surprised, and said, “Okay, sorry.” The republic is at stake here. The miracle of this country is going out and dreaming and building things. Democrats say we have to spend our way to prosperity; Republicans say we have to cut and save. But they’re both wrong: we have to create our way into it, through entrepreneurship.

Is that the message you heard during your walk across America?

Back when I was an advisor to Sam Walton, the founder of Walmart, he used to say, “Whenever you get confused, go to the store. The customers have all the answers.” I want to say that to politicians: Whenever you get confused, the American people have the answers. The country is not made up of consumers and voters; it’s made up of people who buy things and vote. Anybody in a leadership position who doesn’t understand that – who doesn’t look at people holistically – won’t survive. If you believe that purpose is something nice but not necessary, you won’t be in business, period.

Paul Keegan is a contributing writer for Fortune and Money magazines and has written for The New York Times Magazine, Esquire, GQ, and other publications.