VOICE
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LUSTRATI
ON:^ JA_INTER/GETTY^ IMAGES10 MARCH 16, 2020 | ADWEEK®
Brands Need
To Reprioritize
IT’S ON THESE ORGANIZATIONS TO
FOLLOW THE NEEDS OF CONSUMERS AND
INVESTORS ALIKE. BY BRAD BRINEGAR
decades-long adherence to Milton
Friedman’s orthodoxy that business
exists for a single purpose: to create
shareholder wealth.
Business Roundtable now says
that business must serve the needs
of all stakeholders: customers,
employees, suppliers, the community
and, last but not least, those pesky
shareholders. And when it comes to
shareholders, it’s now about long-
term over short-term value.
There was plenty of warranted
skepticism about the move,
particularly during a period of
unrivaled economic growth and
increasingly frequent stock market
record highs. But this was also
happening at a time when one sector
of the economy is showing unusually
high popularity. While Gallup says only
23% of Americans have confidence in
big business, down six points over two
decades, 68% trust small business—
and that trust is growing.
What separates small business
from the Fortune 1000? It’s relatable,
it’s human, it’s sometimes vulnerable,
and it thrives on relationships and
community. This is driving the DTC
economy—where the growth is—in
category after category at the
expense of big legacy brands.
But the legacy brands are starting
to wake up. Unilever has been ahead
of the conversation. Of its 400-
plus brands, 28 are what they call
Sustainable Living Brands, “those
taking action to support positive
change for people and the planet,”
according to the brands’ mission
statement. These brands grew 69%
faster than the rest of Unilever’s
business in 2018, delivering 75% of the
company’s overall growth.
But trumpeting these results put
Unilever in the hot seat about its other
brands. In November, CEO Alan Jope
said that Unilever wants brands to
have a purpose. And he’s since gone
further, saying that brands that fail to
deliver an authentic purpose to society
are likely to find themselves ejected
from Unilever’s portfolio.
Authenticity is key. It is the only
antidote to the skepticism, and so
far, Unilever seems to be getting it
right. It’s not enough to react in fear of
being pilloried by Greta Thunberg; it’s
recognizing that the world has, in fact,
changed and that the next generation
of talent actually cares.
And so now we see other bold
moves starting to take shape. Dick’s
Sporting Goods’ exit from the assault
rifle business, no matter the short-
term cost to its bottom line. Larry
Fink’s stand to substitute business
for the government’s failures to
address climate change by redirectingOver the past 40 years, two
factors—technology and Wall Street—
have totally rewritten how brands are
built. Both drove us to short-term,
transactional marketing.
Technology’s impact is obvious: an
upended media landscape, one-to-one
customer relationships at scale, a new
retail channel capable of delivering
almost instantaneous gratification,
the constant thrum and beat of
social media. Wall Street gets less
attention, but recently that has begun
to change, with a dramatic shift in the
conversation about the purpose of a
corporation.
Confidence in our public and
private institutions is in long decline.
In case you weren’t looking, people
don’t expect the government tosolve their problems. Even before all
that transpired through the recent
impeachment process, only 10% of
Americans had faith in Congress, down
by two-thirds in just two decades.
And people don’t expect big
business to pick up the slack. Tone-
deaf CEO versus average employee
compensation ratios have fueled the
debate about income inequality, if not
fueling the inequality itself. Tech’s big
five are under growing scrutiny for
their concentrated power and often
opaque motives.
So, it was something of a surprise
last year when Business Roundtable,
the powerful association of chief
executive officers of America’s
leading companies led by JPMorgan
Chase CEO Jamie Dimon, rejectedOPINION
the massive assets of BlackRock.
Starbucks’ pledge to reduce waste
and water usage. Meat industry scion
John R. Tyson’s recently announced
sustainability push.
Brands take note: You are where
purpose meets people and, increasingly,
where purpose means profit. If you
are a DTC brand that’s overly focused
on the cost of customer acquisition at
the expense of empathetic customer
engagement, you better look over your
shoulder. Because, to take a leaf from
Simon Sinek, someone with a real
“why” is going to come along and clean
your “what” clock. And if you are a big
legacy brand built for a shareholder-
centric world, it’s time to figure out your
purpose to keep the stakeholder-savvy
upstarts from stealing your growth.Specs
Claim to fame
Brad Brinegar is chairman of
McKinney and executive in
residence at Duke’s Innovation
and Entrepreneurship Initiative.
When he’s not thinking about
the future of brands, he’s on
the water training for masters
rowing competitions.
Base Durham, N.C.
Tw i t t e r @bradbrinegar‘Brands take
note: You
are where
purpose meets
people and,
increasingly,
where purpose
means profit.’