Values: A Secret to Brand Longevity & Growth
This week, I wanted to discuss a topic central to the success of brands and near and dear to my heart - values.
My faith, the military, my mentors, my children and the autobiographies of great leaders of industry have reinforced the importance of values in my life. After suffering through a divorce with two kids and looking to start again, I knew that it was imperative that I find someone who shared my values.
The topic of values may seem disconnected from business for some, but that couldn't be farther from the truth. Like with people, we long to connect with the values of brands, particularly ones we plan to invest our time and resources into. What does the brand believe? What does it stand for? What can I expect from it in the future? Will it be there when I need it most?
As Howard Schultz, founder of Starbucks said: "If people believe they share values with a company, they will stay loyal to the brand."
With that in mind, let's address the important topic of brand values.
Values are valuable in business
Companies are under immense pressure these days to deliver solid short-term financial results. But, focusing solely on maximizing profits and shareholder returns can come at the expense of long-term success. Many of the most beloved brands are guided by a clear set of values that inform their decisions. Leading with their values, these brands build trust with customers, inspire their employees, and ultimately achieve superior and more sustainable performance.
The problem of shareholder primacy
The influential economist Milton Friedman argued that the sole responsibility of business is to increase profits and maximize returns for shareholders. This shareholder primacy view has held sway for decades, with many companies prioritizing short-term earnings over investments in their products, infrastructure and people. In the past, we watched Jack Welch ruthlessly restructure General Electric (GE). More recently, we witnessed hostile takeovers and mass layoffs like the one that took place at Twitter.
"Number one, cash is king. Number two, communicate. Number three, buy or bury the competition." ~ Jack Welch
Yet, research shows that focusing narrowly on short-term results diminishes long-term financial performance for both shareholders and stakeholders. A KPMG study of 300+ companies found that long-term-oriented companies generated 8.5% annual earnings growth compared to 4.6% for short-term peers over 15 years. Separate research shows that brands with stronger values radiate those values externally and have greater relevance with consumers.
Values as a competitive advantage
In contrast, purpose-driven companies that lead with their values are more able to navigate disruption and drive enduring success. A striking example is Apple under Steve Jobs. When Jobs returned as CEO in 1997, he reoriented the company around its core values. In a company-wide address, he declared: "Marketing is about values. We must be clear on what we want people to know about us."
Jobs understood that values are the foundation for resonant brands and products. He relentlessly focused Apple on simplicity, creativity, and improving people's lives. By reflecting the company's values at every customer touchpoint, Apple unleashed a period of transformational innovation and growth.
Ultimately, values create value when organizations "walk the talk." USAA, for example, extensively trains employees to understand and empathize with the needs of their military customers. Disney relentlessly reinforces its core purpose "to entertain, inform and inspire people around the globe through the power of unparalleled storytelling" with every employee and guest interaction. And Chick-fil-A's values of excellence and servant leadership shape every customer experience.
Values-based brands tend to put people first. They are seen as more dependable and are, therefore, more trusted by consumers. As author Daniel Aronson argues in "The Value of Values," values are an untapped source of competitive advantage with concrete financial results: "In a time when products, technologies, and markets are becoming less differentiated, values are a source of untapped competitive advantage. These are not theoretical or potential factors—they are concrete forces creating real effects with quantifiable financial results."
For my own company, placing values at the forefront has helped us attract the right kind of clients and staff.
These are some of the principles the team at Aaron Hassen Marketing and I believe in:
Doing what is right pays off in the long run.
Treating others the way you want to be treated increases reciprocity.
Truth and transparency build trust, and trust is essential to successful partnerships.
We care; and so we take ownership and treat our customers' businesses like our own.
Making great progress requires working hard and smart.
Creativity and innovation are central to growth and require a safe space to flourish.
Growth depends on taking calculated risks, which means not everything will succeed.
In an era of rising expectations and constant change, values provide an enduring foundation for growth. By leading with values, brands can create lasting value for shareholders, stakeholders, and society.
Have you considered your company's values?
My team and I can help your business clarify its values and accentuate its unique DNA in the market. Please CONTACT US if your business needs help.
