Making a Difference and Money

How leaders can inspire and champion purpose

Ad man and author Roy Spence believes in “the power of purpose” so thoroughly that he has built his career on it, and it has become the guiding philosophy of his life. His new book, “It’s Not What You Sell, It’s What You Stand For: Why Every Extraordinary Business Is Driven by Purpose” (co-written with associate Haley Rushing) is a narrative of the insights learned through first-hand experience at GSD&M Idea City, the advertising firm he founded with four college friends in 1971.

"What we discovered is that the purpose-driven companies ... drive a culture inside the company that practices the golden rule; and they practice community, freedom and responsibility, and they build this awesome culture."

The ad firm — whose purpose-based branding helps clients understand that consumers look at companies as much for what they stand for as for what they sell — has since guided companies and organizations such as Southwest Airlines, BMW, the University of Texas and Wal-Mart to focus on their purpose, the definitive statement about the difference you are trying to make in the world, beyond profits to improving peoples’ lives.

In Part 2 of a two-part series, Spence talks with HOW Online about how leaders can inspire employees to fulfill the purpose of an organization, whether purpose-driven companies are more sustainable, innovative and customer-centric, and how profit is a byproduct of making a difference.

Read Part 1 of the series
Part 2 of the series

HOW Online: When we talk about principles and values-driven behavior, these are the sort of things that were once thought of as soft. Now, they’re the hard currency of business.

Roy Spence: People used to say, “We’ll get to ethics when we can get around to it.” Not anymore.

In the third part of my book ["Becoming a Leader of Great Purpose"], and I won’t dwell on it, there are a few areas of leadership that we’ve learned and that we practice in our company.

First, the No. 1 job of a CEO is to champion the purpose of the company, not relegate it to marketing or PR. Some CEOS — not the good ones — have relegated the purpose of their organization to some department while they were in the business trying to make money. This does not work long-term. The only way you can champion purpose is if you know what it is.

The second most important thing of a purpose-based leader — and I learned this from Gen. Wesley Clark — is to protect the troops at all costs. I talked to Wesley about five years ago, and he said: “Let me tell you the biggest shocker coming out of the military into civilian life. In the military, the No. 1 job of a general is to protect the troops, meaning, don’t put yourself in battle without making sure everybody has medical attention and healthcare and their kids get educated — protect the troops. In civilian life, it’s like the CEOs — when you look at many big events going on — weren’t in the business of protecting their troops.”

And again, it’s not just soft stuff — it’s the art of war: Know your enemy. Know yourself. Know the terrain. Don’t put yourself in a place where you’re destined to lose. Don’t lead your troops into battle where you’re going to get slaughtered. And we’ve seen it time and time again where CEOs didn’t do that.

Third, practice the golden rule. It’s not that complicated: You treat people like you want to be treated. That’s what we talk about when we talk about ethical principles and values. If we just practice the golden rule, the world would be a better place.

Also, leaders have got to be able to dump the garbage. You can’t move forward holding onto resentment or fear or envy. You’ve got to be able to do this. In fact, we have a “Dump the Garbage Day” every year at our company. And we dump not only the garbage — meaning getting organized and recycling — but we also encourage all of our people to dump the baggage. You can’t move forward hanging onto old stuff.

HOW: How can leaders lead by example and inspire employees to fulfill the purpose of an organization?

Spence: Number one, they’ve got to buy into it. CEOs have got to champion and believe in the power of purpose. If they don’t, it’s just words.

And they got to say things like, for example when Herb [Kelleher] would get up to speak, he would say things like: “Now people, every day we go to work we’re here to let more people fly. Why are we not going to have Snickers on our airplanes and just peanuts? Because it’s going to cost more. You might think it’s a little thing, but if our costs go up, our fares go up, we’re not going to be able to give people the freedom to fly — and if we don’t do that, we’ll be out of business.”

Sam Walton would say to his people everyday, “We’re going to save people money so they can live better, and they’ll shop with us more than anybody else.”

The generals of the United States Air Force say to their air men and women every day: “We get up to go to work to protect America from attacks, from space, cyberspace or air. That’s our business.”

You don’t have to be charismatic to do it, but you’ve got to know the central purpose.

And then you put meat to that bone.

HOW: Does purpose guide companies’ decisions as well?

Spence: Absolutely. One of the chapters of the book says that purpose helps you create your “stop-doing list.” It will guide you on everything that you’re doing.

A story that illustrates this point was with Southwest. You won’t believe this, but we had a lot of MD-80 [airplane] envy.

One day, we were sitting in a meeting, and we had all flown the sleek, new MD-80s as well as some Boeings, and we were going to vote on which plane Southwest would go with. Herb [Kelleher, co-founder and former chairman and CEO of Southwest Airlines] voted against it.

He said, “Let me tell you something. They might look sleek. They might look nice. But you know what it’s going to cost us to train our pilots to be certified on two different aircraft? Do you know what it’s going to cost us to do to train our mechanics? Do you know what it’s going to cost us to train our ramp agents?

At that moment in time, he made the call not to do it because, he said, “It violates our purpose of keeping costs down, so we can keep fares down so more people can fly.”

And I’ve seen this type of thing happen time and time again when you have purpose both as your anchor and your North Star.

HOW: Is innovation easier in purpose-driven companies?

Spence: Yes, you innovate on your purpose. With one of our clients, BMW, their purpose is to enable everyone to experience the joy of driving. They are in the joy business.

So at some point innovation has a purpose: “With BMW, we’re going to innovate because we’re going to improve every day on the joy of driving. We’re not going to innovate because we have Lexus-envy, but we’re going to use innovation to drive our purpose.”

I won’t use an example, but there are computer companies right now that are struggling mightily because they’re trying to innovate. And I ask, for what purpose? “Oh, well, because Apple is.” Well, if you try to be like Apple, the best you’ll ever be is a worse them. So you better go back to your purpose and innovate around why are you in business. It drives focused innovation.

HOW: It sounds like purpose-driven companies are very customer-centric. Is that part of creating a sense of purpose in the company?

Spence: Yes. What we discovered — and we’ve practiced this in the company — is that the purpose-driven companies, first and foremost, drive a culture inside the company that practices the golden rule; and they practice community, freedom and responsibility, and they build this awesome culture.

And again, I learned this from the masters, whether it was Norm Brinker [whose company Brinker International owns Chili's] or Herb [Kelleher] or Sam [Walton, the founder of Wal-Mart]: If you build a culture where your employees feel important and a part of the purpose of the organization, and if you protect your troops, they’ll go out and win the war. So purpose-driven companies are culture-driven: high purpose, high culture.

Sam used to always say, “If you ever get confused, go to the store. The customers have all the answers.”

Isn’t that great? “Get out of here. Go to the store.” So they’re not only employee-centric, they are customer-centric. And the last thing they think about is their company. If you take care of the employees and you take care of the customer, the byproduct is making money. It’s not the product.

The only one who makes money is the federal government. They have a plant to print the money.

We don’t make money. We make a difference. We make services. We make products and the process. The consumers have all the money, and if you’re not improving their lives, then they’re not going to give you their money.

So we got to make a difference in order to make money. And I think that’s going to be the mantra as America moves forward.

HOW: Are purpose-driven companies focused more on long-term sustainability and less on short-term profit?

Spence: It has been my experience that they don’t see a trade-off. In other words, because they know what their purpose is, purpose-driven companies have the same purpose in the short term as in the long term.

I think the future is about marketing your values and your value. And when those two things come together, that’s when you really get traction in the marketplace. Positioning might change and tactics might change, but the purpose remains the same.

HOW: Are purpose-driven companies more sustainable?

Spence: They are because they’re not trying to make up why they exist.

You know, I don’t know what happened to Circuit City. I don’t know what happened to Sears. But at some point they went from making a difference to doing something else.

And you can lose it overnight. We’ve seen it in the financial markets. They were in the business of making money. I mean, the Freddie Macs of the world, they tweaked their model from actually lending money to people at the best rate they could to lending to people who were guaranteed not to pay it back. That little tweak — by the way, the word “tweak” is a really dangerous word — caused the collapse of the housing market.

I think America has a purpose. We have to go out and talk to the people about our purpose and our people and what we stand for, and we’ve got to live up to that and practice that. Policies come and go, just like positionings and brands, but purpose is forever.

HOW: So purpose-driven companies engender loyalty and trust from their employees and customers that perhaps companies without a purpose would not?

Spence: Yes. We did a survey just recently, right when the crisis really started to hit. We asked people, “Do you agree that what a company stands for is as important as what it sells?”

Eighty-eight percent of the American people said they agreed with that statement strongly.

Secondly, a survey by Cone that was done with Millennials found that nearly 70 percent of those surveyed said they only want to work for companies that are making a difference.

So when we come out of this crisis, and you’re in the war for the best and brightest, you better have a company that stands for something or you’re not going to be in the talent business.

People will say, “I’m not working there. For what purpose do you all exist, make money? I’m not in that business. I will make more money because I’m making a difference.”

I always remember Sam [Walton]. At the first stockholders meeting 15 years ago — it was in a gym somewhere and all the Wall Street boys were there and they had their suits on. They were burning up because there was no air condition. And I think Sam did it on purpose, by the way.

The meeting started at 5:00 in the morning, and we had customers call up, we had store managers call up, partners. At the end of the five-hour deal he closed the meeting by saying, “Well, that’s great. Is everybody happy?” His son then whispered in his ear. And Sam said, “Oh, my son just told me I haven’t talked about the money thing.”

He stopped for a second and then said, “We made $1.2 billion this year. Everybody O.K. with that? We’re going to split our stock today. Everybody all right with that?”

He forgot — now, don’t think that Sam didn’t know about money. But he knew it was a byproduct of doing his purpose. Isn’t that powerful?

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