Jim Stengel, host of The CMO Podcast and former CMO of P&G, is passionate about helping businesses and individuals discover and activate the “why” behind their work. Join us as he discusses the importance of purpose for an organization, how this can lead to better financial results and how the food industry's mission became more clearly defined and transparent as a result of the challenges of the past year.
The following is an edited transcript of the Ag Future podcast episode with Jim Stengel hosted by Tom Martin. Click below to hear the full audio or listen to the episode on Apple Podcasts or Spotify.
Tom: Welcome, Jim.
Jim: Tom, thank you. Great to be here on a beautiful day with you in the spring.
Tom: Let's just begin with this very simple but important question: What is the importance of purpose?
Jim: Well, Tom, I think the importance of purpose is to give people in an organization a North Star — something to bring them together, something that is helping people, impacting people's lives in a way beyond just turning a dollar. And so, for me, it is getting to the fundamental question of: Why are we in business beyond making money? What's our point here? What was the founder’s idea? What is that concept that brings people together, gives them a bit of lifting their step, and brings them to work with new ideas, energy (and) enthusiasm every day? (That’s) such a long-winded way of saying I think it's the “why” behind what businesses do for a living. And the more powerful the “why,” I think, the more powerful the business.
Tom: When that policy of purpose, of mission, is established and made clear, how does that help the company then grow?
Jim: Well, I think it helps them in a few ways. And by the way, Tom, there’s a lot of data. I’ve been a purpose seller since I was at Procter & Gamble. I’m going on probably a quarter of a century of advocating purpose, testing it, trying it, seeking data about it. And there's a growing database that (shows that) companies that are seen by people, consumers (and) employees as being purpose-driven far exceed their competition in terms of business results, financial results. So, it works. It helps the company grow. And the “why” behind why it works is it attracts better people. It encourages people to bring their best ideas. It kind of causes you to measure different things. It helps you be more customer-centric. It helps you to have more of a service and a generosity mindset. And overall, it just creates a great culture. You know, brands and businesses are grown by people, and great cultures attract great people, and great cultures grow brands. So, it works. Once you're in a purpose-driven organization, it’s tough to leave it, and it’s tough to go to one that is not wired that way.
Tom: Are passion and purpose mutually exclusive, or can they complement one another?
Jim: Oh, I think they go together. You know, if you’re working for a company that you really believe in and a leader you really believe in and a team you really believe in, you bring a tremendous sense of passion and energy and creativity to your work. And I think they go hand in hand in a purpose-driven company.
You know, it’s tough for me to think about an organization that attracts passionate people but (for whom passion is) not a purpose of the center. And by this, Tom, I don’t mean cause marketing. I don’t mean philanthropy. I don't mean CSR. I mean a genuine passion and desire and interest to leverage the company's assets to make life better for the people they serve.
Tom: Is there a particular process? What goes into sorting out and clearly identifying a company's purpose?
Jim: Well, I think the answer is usually in the company itself. It’s usually with the people. And if we’re asked by a firm or a leader to help them with that — my firm does a bit of that work. You know, we always come in like anthropologists, and we come in curious. We come in like sociologists. What we want to do is we want to talk to a lot of people. We want to really understand where this company came from and what was the catalyst in starting the business whenever it started. What was the founder’s motivation? What happened in the company — when were its high times? Its low times? And so, we really study the history, and we also talk to a lot of people about why they're in this company — why they joined, what brings them to work, what are their hopes and dreams, when are they at their best, what’s the best day they've had at work. And when you go in and you ask those kinds of questions and you study the history of a company, it does come out.
I mean, we're not wizards. We don't come into a company and send a lightning bolt and their purpose appears in the wall and everything's wonderful. We go in and we help the people in the company discover — or rediscover — what's always been there. And then the tricky part is the next stage, and that is bringing it to life in daily work.
Tom: I know that you've defined the key components of purpose, and you've actually created a framework around five areas: employee engagement, offerings, societal contributions, branding, and consumer engagement. And I'd like to look at each of these, beginning with employee engagement. After a year and counting of this life under the pandemic, what are leadership teams encountering in the way of employee engagement?
Jim: Well, Tom, I think that framework you just rattled off, which we do live by, we did not create that just by team meeting. We said, “These are the five things we’re going to study.” That came out of a very large database on what sort of activities drive purpose, as consumers see it as important. So, employee offerings and contributions that help society, branding, consumer engagement — those are based on a very large database. So, it's good, quantitative information. So, I guarantee, anyone who is listening, if you put your team together and you think about your status against those five areas, no doubt, you will have ideas to make your company better and stronger.
On employee engagement, which is your pointed question, I am seeing, during the pandemic condition, a tremendous — and I’m talking about a lot of people, a lot of chief marketing officers and CEOs over the last 12 months, and there is no doubt that the way they work with their teams and approach their teams has changed significantly. So, the level of empathy, of listening, of understanding, of caring — I think those have always been there with great leaders, (but) they’re on hyperdrive over the last year. They have been on hyperdrive. And once that happens, you don't go back.
So, the bond I am seeing with teams, among teams, are driven by the leader and how they work with their team over the last 12 months. That is stronger than I've seen in my career, and (that) sounds counterintuitive, because we have been able to touch and shake each other's hands and be around the same table (in the past), but counterintuitively, what's happened is, I think, leaders have gone above and beyond on caring about their people — their mental health, their physical health, their balance in their life. And I think that's one very positive outcome of these very, very difficult times.
Tom: And let's expand on that. What sort of actions have occurred as a result of those realizations?
Jim: Well, there's all sorts of rituals people have developed on their own, but I think the principle that underlies all of them (is that) they’ve given their teams the flexibility and the freedom to run their lives and to take care of what's most important and to be of service to their customers in all sorts of ways.
You know, I just remember, in the first weeks of the pandemic, talking to the chief innovation officer and chief marketing officer of the beer company, AB InBev. And these were very early times; we were just all kind of figuring out how to get on Zoom together. And he just described how, you know, they just said to their people, “Listen, forget about our products and services right now. Let's just figure out everything we can do with our capabilities and our assets to help people.” So, if that's about making sanitizers in our factories or volunteering or opening up our spaces for whatever is needed in the health community, that's what they did. And at the same time, they started figuring out how they’re going to work together as teams. And the one principle I’ve seen, you know, obviously, (is) flexibility and listening and caring about people. Everyone's making decisions faster.
You know, some rituals I see — teams are having morning quick check-ins, evening quick check-ins (where they ask), “What has to be done today? How did we do today? Do we make decisions fast enough?” So, (there’s) a lot more empowerment, a lot more agility, a lot more speed — and, through that, I'm hearing, a lot more creativity. We’re just finding ways to do things that we’ve never done before, and that feels good.
Tom: This pandemic certainly has changed things, hasn’t it?
Jim: Oh, yeah. Yeah. I mean, I think this is just maybe — I don’t know about your life, but in my life, I’m not sure there’s been anything that has been more powerful in terms of changing habits, behaviors, rituals (and) focus. I'm hearing so many people who are forcing some milestones in their lives, whether that's stopping a career, changing a career, figuring out what they really want to do with the precious time we all have left on this planet, changing companies because they want to work for a company that has a stronger sense of purpose. I'm hearing all of these things and discussions.
Tom: Yeah. It has really reoriented our priorities, I would say.
Jim: Yes. Absolutely. Absolutely.
Tom: What about new generations entering the workforce? Is there a struggle there, to connect meaningfully with these new generations?
Jim: Well, I think it's been very tough to start a job in the pandemic, and I know a lot of young people who have done that. And companies, God bless them, have done their best to bring people into a culture, but I think starting with a company without meeting anyone — I just talked to a woman whose company was acquired by a large financial institution, and they’re now well into integration, and she said, “I've never met these people. And it's extraordinary how well we all feel we trust each other and understand each other without ever having a physical meeting.”
But I do think for someone who's 22, 23, 27, who is starting a new job, it has been a particular challenge. And obviously, work is much more than going someplace to get something done. You get a paycheck, (but) when you're at that age, it's about meeting people. It's about discovering new things, developing yourself. And I think that has been tough in the pandemic. And you know, they're getting by. They're managing. And companies are doing their best. But I think when we see people's confidence (increase) in coming back together again, the first people who will want to be together in some sort of social/office situation will be the people who are in their first 1 to 2 years in a row.
Tom: Another of these five key focus points that you’ve identified is “offerings.” What's this about?
Jim: Oh, that’s probably a fancy way of saying just the products and services that you offer people from your company. And I think the companies that are purpose-driven think very deeply about, you know, “Are we offering the right level of products and services that emanate from our purpose, that are inspired by our purpose, and that genuinely do help people in our area in a way that delights them, reduces friction, makes your life easier, makes your life more joyful, makes your life richer?” And so, then, there are a lot of companies who get stuck in the current products and services that they're offering, and they get a little bit functional.
You know, I spent a lot of years at Procter & Gamble, and when we were caught on our back foot, it was because we didn't think broadly enough about the products and services we offered our consumers as their lives changed. And I think, when you have a purpose that transcends the category that you're operating in — that appeals to sort of a higher North Star — then your employees come up with interesting products or services that are beyond what you're offering today. And I think that's a sign of a very creative customer-centered, purpose-driven organization.
Tom: That takes us right into that next point: societal contributions. What sorts of responsible actions can businesses take to play a role in improving society and the planet beyond the bottom line, and how does that tie into consumer engagement?
Jim: Yeah. I think, Tom, if you had done — you know, we do a lot of consumer research. And there's no doubt that this idea that companies should take a proactive role in solving some of the most pressing problems in our society, in our planet — our consumers and, frankly, our employees are expecting that. I don't think you would have seen that nearly as strongly as you do today, you know, 5 or 6 years ago. So, this is one that has gotten a bigger spotlight, where the expectations are higher. And it's a tricky one, right? If your business is, I don't know, hygiene — like Clorox, like Unilever (or), to some extent, Procter and Gamble — what you do for the planet and society ought to somehow be connected to the business you are or the culture you are and the products and services that you offer. And I think you need to stay in a space where you can generally make a difference based on the capabilities in your company. And, of course, there are some areas that transcend that.
I think if you're not seeking to attract a diverse group of employees and you're (not) working on an inclusive culture that welcomes everyone, that welcomes everyone to bring their best ideas to work, then I think you're going to be, you know, you're going to be stuck about attracting the best talent. But when you pick an area that you want to make a difference in and help society, it should be something that you can genuinely affect, or it's going to be seen as greenwashing, and it’s not going to be authentic, and it's not who you are.
And you know, you can probably think about the brands that you feel are taking a stand in the right spaces. You know, Unilever is a company that I competed against for many years. They've been very proactive at saying, “We're going to help people live a more sustainable lifestyle. And since we have an enormous range of products that are in packages that are discarded, that's the space that we think is right for us to play in. And if we do it well, consumers will appreciate it, our business will get healthier and the planet will be better.” I mean, look at General Motors today. They're making statements like, you know, “We're going to electrify everything by 2035.” They had this rallying cry of zero emissions, zero congestion, zero crashes. So, they're saying, “Hey, we're in the transportation movement business, and autos and trucks have been our lifeline. And they will continue to be for some time, but we are going to set a vision to move to 100% electrification, because it's the right thing to do.” And so, that's a terrific societal contribution, which, I think, if they do well, will benefit their business. So, it’s a good example, I think, of being coherent and picking a place to stand that makes sense for your culture and your category.
Tom: The fifth key focus point among the five that we've been talking about is branding. And I'm wondering: Is branding an expression of the other four?
Jim: Yeah. I think it's where it all comes together, Tom. I mean, when you think about branding, it’s everything that you communicate, right? It's your advertising. It’s your packaging. It's your language. It's your rituals in the company. So, it's everything that sends a message about who you are and what you value. So, I think it all comes together there. But you know, again, if you don’t think about all five of these areas, you will not be sending out a coherent and consistent message to your employees, first, as well as to other stakeholders, which include your customers. So, this is an important one. And I think it's one that, sometimes, we can think about as an afterthought.
One danger in the purpose journey is that everyone is not on the same page, and some companies see purpose as a marketing initiative or a corporate affairs initiative, and (in) that (case), it does not work. In fact, it backfires. When you're on the purpose journey, everyone's in the boat. Everyone has a role. It breaks down silos. Everyone comes together, and that includes everything you do in branding. So, these aren't functional or discipline ideas. These are ideas within our company.
Tom: That really underscores the critical nature of effective communication of those ideas, right?
Jim: Oh, absolutely. Yeah. And it’s so important, communication, and we all know the companies that do it well and do it creatively and do it with a high level of engagement, but we have to do that inside the company, too. I was working with a company in Canada on the purpose journey, and they revamped, in all ways, how they communicate. They became much better storytellers. They started almost every press release with a story about their purpose. They started company meetings with stories about their purpose. And it palpably changed the feeling in that company and the morale in that company, and it led to just better ideas coming forward, better innovation toward their purpose, which everyone made their own, because they told stories about it. They talked about it in their own words and in their own stories, whether they were in the legal group, the financial group, the operations group, the finance group, the marketing group. Everyone had their own stories, but it was held together by the purpose.
Tom: The food industry has always been important to everybody, but it seems as though it's really catapulted to the forefront during COVID, because we're spending more time in our kitchens (and) more of us (are) embracing healthy diets. How has this influenced thinking and decision-making at the leadership level of the food industry?
Jim: Well, I think this has been really positive, and I'm not sure they've gotten all the credit they probably should have through these times. I have my own podcast, and I talked to several CMOs of companies over the last year. And one woman — she’s at Kellogg's — you know, she said to me that, through this pandemic experience we've all had, she said, “Our purpose became so much clearer, our focus became so much clearer, and it came to life, especially in the supply chain.” And the supply chain of finding the right ingredients (and) materials in difficult times, getting products to the shelves so people could shop quickly, carefully go home and enjoy meals with their families when we still, to some extent, are shut in.
I talked to the General Mills CMO about these times. I talked to people at Alltech and many others. And I just feel like the food industry stepped up — and their stock prices are pretty good. So, I think it's been appreciated by Wall Street and the investors, but I think they just said, “We’ve always been important. We’re now more important than ever.” And while they're doing this, Tom, I think they were continuing to make their products more — they were more transparent about what's in their products. They’re seeking to make the ingredients better. They’re seeking to help people eat healthier. Kroger's in my hometown, here, in Cincinnati, (and) they've been on a journey, a purpose journey, for the last few years, where they're just trying to help people eat fresh foods more easily and affordably and creatively.
So, I really feel like the food industry has had a — it’s kind of a year of, you know — it tested them, of course. The supply chains were tested with all of us, but I just think they rose up and they were there and they helped us all get through this. And I think they’re stronger companies because of that.
Tom: It’s clear that you're a proponent of this, but I'm wondering what exactly makes you optimistic about a purpose-driven world as we move forward.
Jim: Because it works, Tom. You know, the companies that are seen by people as being more purpose-driven are doing better than their competition, and they're delivering superior financial results, and that's because people care. And so, you know, I think purpose is the management philosophy of the century. I think it was seen as a little bit, maybe, “fluffy” as it was bandied about 15 to 20 years ago, but I think what's happening is people are now seeing the growing data that (proves that) purpose is what people want. They want you to be purpose-centered. They want to be customer-centric. They want you to attract really great people, and they want you to help them live their lives more sustainably and more happily. So, I think it's here to stay. It's going to get stronger and stronger. And the competitive battleground is going to be the companies that are more long-term focused, that are more committed to this, that execute better, that are more creative in how they execute. So, it's not going to be about, “Are you purpose-driven or not?” It will be about how well that you inculcate that in your culture and how well you execute that for your customers.
Tom: Jim Stengel, former global marketing officer of Procter & Gamble, now president and CEO of the Jim Stengel Company in Cincinnati. Thanks, Jim.
Jim: Thank you, Tom. I enjoyed it.