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Boards must be fully engaged with an organisation's purpose

Louise McCann
Non-Executive Director

“The purpose of a business is to create and keep a customer” Peter Drucker

Drucker’s perspective is one that has always resonated with the CMO the traditional the custodian of an organisations Brand and its customers. With a more global economy, the enablement of digital and the disruption it has bought there has been a significant shift from the ownership of the Purpose, the Brand and the Customer have been amplified into the Boardroom.

Purpose is now a fundamental part of strategy

Purpose has become a fundamental part of strategy and not just about the execution elements of an organisations Brand. The acceptance by Boards that “anytime, anywhere, any device” has seen the balance of power in the marketing relationship with Purpose shift from an organisation to the customer control has influenced the need for Board to become absolutely engaged with Brand and Purpose in a more meaningful manner.

Purpose has become a definitive statement about the “how “of what an organisation does and the “how” intrinsically linked to the Brand. Airbnb’s Belong Anywhere is a great expression of the organisation purpose, as is Ubers Everyone’s private driver. Indeed an organisation without purpose would see a workforce going through the motions doing whatever task is at hand without any idea of why they are doing it. Purpose injects employees’ focus to the reality that a Brand is what a Brand does and to fail to deliver on the promise will significantly impact the integrity of the Brand. VW in the US is experiencing firsthand the backlash of the power of integrity and the impact on share price.

The evolution of Purpose as a single unifying theme, allows a workforce to know exactly what they work for and why their daily effort contributes to that. Chipotle’s Food with Integrity touches every part of the business and every business that touches Chipotle, equally employees have to deliver daily on the “day after day we are committed”.

With Purpose as a key driver for an organisation Boards must be absolutely engaged with it, ensure that it is measured in a meaningful way and that it can be leveraged to deliver financial, operational and customer outcomes. Purpose must also form a significant part of the strategic framework so as to ultimately deliver total shareholder return.

Big and small data has allowed the measurement of purpose

Big and small data has allowed the measurement of purpose and brand values, once regarded as soft measures, to have metrics that can stand-up credibly and also to be correlated to operational outcomes. One such measure is the Net Promoter Score (NPS) and whilst not new to marketers it has only recently been understood and embraced by Boards.

One organisation that was an early adopter of NPS and linked it to purpose, strategically and operationally was Australia’s challenger ISP/Telecommunication provider iiNet Limited. iiNet’s core purpose of “awesome customer service” was monitored and measured by NPS. NPS was at the heart of the organisation measured with every customer interaction. Indeed it became part of the DNA of the culture.

NPS, when combined with the core service purpose, saw iiNet achieve industry-low churn, significant customer growth, a strong Brand, and a distinct culture. iiNet’s NPS scores in the 50’s were the envy of competitors and other service companies. iiNet’s Board and management drove purpose and NPS through key remuneration drivers including short and longer-term incentives, from the CEO through to the call centre staff, it featured strongly in the strategic framework and drove continued operational excellence and innovation. iiNet’s belief in customer service and discipline in deploying NPS as a metric of its single unifying “awesome customer service” theme saw it consistently in the top 20 performing companies on the ASX over the last 5 years. iiNet’s Board and CEO held a view consistent with Drucker and that was to stand back and watch the power of a collective purpose drive the organisation to realise unmatched success. The Board’s role was to be engaged and hold management to the core purpose of awesome customer service and in doing so create and keep customers.


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