Nikolaj Stagis is the CEO of the brand agency Stagis, which he founded when he was 20 years old. Now, 21 years later, he helps companies discover and develop business strategy and transform into purposeful brands.
Businesses with a Meaningful Purpose
The brands I love are businesses with a meaningful purpose and a clear attitude towards who they are and what they stand for.
The businesses are not necessarily charitable. They may not save lives. But they fascinate me and make me curious. I get the urge to try their services, work for them–become apart of what they stand for and the community that surrounds them. They are passionate about what they do and have their own special way of doing business.
The authentic companies have a meaningful purpose, use their history as inspiration to develop the future of their business, and are capable of passionately making their purpose come alive in the everyday.
Some of the most famous companies are successful in redefining their unique identity in order to create connections between the organization’s strengths and the surrounding world, to which the business must be relevant.
That these purpose-driven businesses succeed continuously in redefining and focusing their identity is because either the owners or the leaders are constantly curious about discovering and pointing out their company’s special strengths. Look at Jørgen Vig Knudstorp at LEGO.
Look at René Redzepi at Noma. Federico Minoli, when he rescued the Ducati motorcycle brand. Or Michael Christiansen in the period when he was head of the Royal Danish Theatre.
No matter whether the starting point was taking over a company with a century-long history or starting a completely new venture, and no matter the services and size of the company, they were successful in developing their business in a way that was relevant and attractive to the company’s customers and stakeholders. But they were only successful in their leadership mission once they made a virtue of understanding what the company’s authentic strengths were.
Leaders must constantly develop the company’s identity
To create a clear purpose, the company must be aware of the authentic strengths it builds on. A central definition of the term authenticity is being “true to yourself”. That may sound simple enough. Many say that the company need only “walk the talk”, which is the most widespread misinterpretation of authenticity.
When thought and speech are implemented in the everyday “walk”, it’s about the company’s integrity and ability to implement its beliefs in everyday life – not about authenticity.
Many say that the company need only “walk the talk”, which is the most widespread misinterpretation of authenticity
When a company is authentic, it presupposes that it is true to itself – as opposed to, for example, following the customers, the market or the competitors.
The primary challenge in being authentic lies in defining and understanding the company’s “self”. This should not only be understood as a specific permanent core of the identity – rather as an essential set of inherent strengths and potentials that are often composed of tangible and abstract characteristics, competencies, knowledge, and ideas.
Although such strengths have a certain stability and recognisability overtime, they also change.
Google’s purpose is: “to make the world’s information accessible”, but there’s a difference in expression between how Google made information accessible when the search engine was launched in 1998, and how the business uses information to develop self-driving cars and artificial intelligence today. However, Google’s authentic strengths are to a large degree the same – then as now.
Since René Redzepi and Claus Meyer first went on a journey of discovery in the geography, raw materials and food culture of the Nordic countries in 2003, the world’s most influential restaurant, Noma, has redefined what “making local food” means.
Today, René Redzepi is still exploring how “local food” can be interpreted in practice in the kitchen and the restaurant experience.
This includes moving the restaurant temporarily to Japan and Australia to discover, interpret and challenge their local food cultures. Only now, more than ten years later, René Redzepi said that he was about to realize his dream of a Nordic restaurant when Noma reopened as an urban farm on the edge of the Christiania neighborhood in Copenhagen (Denmark).
When a company is true to itself, it doesn’t entail a fixed meaning or permanent core to which the organization must be faithful. Rather, the authentic companies are in a constant process where management and employees create new interpretations of the identity of the company.
There is a special managerial focus and a concrete leadership practice connected with achieving the dynamics that turn an organization into an authentic company.
In situations where managers successfully implement a turn-around and bring the business from crisis to success or create a new business that breaks with the market’s usual ways of thinking, the managers are often driven by an extraordinary curiosity, an ability to go exploring and regard the business as if the manager was an anthropologist who had to understand an unfamiliar tribe.
That’s how Michael Christiansen described his greatest breakthrough at the Royal Theatre; it wasn’t until he physically sat in the orchestra pit alongside the musicians and tried to understand them that he successfully rose to the occasion as head of not just the orchestra but the entire organization.
Unlike “authentic leadership” or being an authentic leader, management of the company’s authentic identity is about leading and developing the company while keeping in mind that there are unexploited potentials for development, innovation, customer experiences, and better products hidden in the company’s history, culture and employees – often unnoticed and invisible in the company’s everyday life.
This makes demands on the leader – middle manager, general manager or board chairman – to see opportunities in the company’s praxis to the same high degree as seeing them in the company’s figures.
Do you Invest in Future Earnings – or in the Future of Us?
If you ask Danes about the company’s purpose, I think many will say “to make money“. Mærsk’s purpose or raison d’etre is first and foremost financial – at least in the Danes’ view. That APM Terminals is currently investing DKK 14 billion in building a new port in Nigeria is primarily due to a belief that growth in Africa is long-lasting and that the terminal will become a good business in the future.
The investment places A.P. Møller – Mærsk in a strategically important location and the venture draws a straight line back to the ability of the founder, Arnold Peter Møller, to see the opportunities of the maritime industry and generate long-term returns.
But the port construction venture is also about the story of the Africans’ access to cheap transport of goods, about new jobs – and thus about supporting the possibility for development for the world’s poor. The good strategic investment thus contains a by-product of benefit to society, which surely pleases the leaders of the Mærsk group, but which is hardly their inducement to invest.
What would A.P. Møller – Mærsk achieve if the company changed its managerial focus from profitability to a broader perspective that balances the target of earnings with a target of creating a positive impact in the world?
If the evaluation of a new project wasn’t determined by financial yields but by the importance for the employees of the Mærsk group, for Denmark as a nation, or by the value that the project could generate for the world’s poor, would the choice of investments then be different?
Corporate Purpose isn’t Charity
At the world’s leading enzyme company, Novozymes, new products that use enzymes for a wide range of industrial uses are developed all the time. Enzymes can make detergents more effective, increase the shelf-life of bread and reduce the use of toxic chemicals in industry.
According to its former CEO Steen Riisgaard, progress in the environment and sustainability are only possible if they are good business at the same time. Novozymes is, therefore, both: a company that makes the world greener and more sustainable, while at the same time it has been successful in achieving growth and yielding profits throughout the whole of its lifetime.
Novozymes’s business model is in contrast to the way of thinking that is often presented when Corporate Social Responsibility (CSR) is being discussed. CSR is something that irks many business leaders as the company’s responsibility is often formulated as a consideration beyond and in addition to the company’s operations and established purpose – and is therefore placed in an isolated department, remote from the company’s core operations, strategy development, and sales.
That LEGO and Novozymes – and potentially also the Danish giant A.P. Møller – Mærsk – are successful in their social responsibility without talking about CSR all the time is because their purpose, core business and impression on the world are one and the same thing.
When LEGO communicates its annual results to the press, the company also explains how children’s brains and abilities develop when they play with LEGO bricks. Jørgen Vig Knudstorp and the LEGO management team have been successful because – said in popular terms – the company’s financials and purpose are in harmony.
Identity is Vital for the Company’s Success
Authentic companies are often successful at being innovative, achieving a good financial position and creating value for society. They succeed in defining the organizational identity, purpose, and business such that the brand is perceived as something special – by both employees, customers, and the world around them.
That LEGO is successful in constantly reporting a yield several times higher than that of its competitors such as Mattel and Hasbro is due to both LEGO’s success in asking a higher price and to its more efficient way of running its business.
According to Jørgen Vig Knudstorp, LEGO has smaller staff and control-functions than its competitors, while at the same time the organization has a clear common focus because the company’s purpose and strengths are well defined. Both the value experienced by the customers and the efficiency increase when the company defines its purpose meaningfully.
Crises can Lead to Success
Unfortunately, few companies work constantly with defining their purpose, identity, and brand as an integral part of their strategy and operations. They must often go through serious crises before the subject of identity and purpose arises – often in the form of questions like “What do we do now?”, “What are we going to live from in the future?” or ultimately “Who are we?”.
Even though the questions often come a little too late, the crises also open up new opportunities. Some of the world’s most successful brands have succeeded in taking a quantum leap in their development and strengthened their identity and brand after a crisis.
When in 1982 the American medicine giant Johnson & Johnson was connected with seven deaths because someone had tinkered with the company’s Tylenol pill bottles, the crisis resulted in an affirmation of the founders’ attitude to give priority to doctors, nurses, and patients rather than to the shareholders.
As a consequence, Johnson & Johnson recalled 31 million pill bottles, offered to replace all the Tylenol pills on the market and developed a new three-level safety design for the pill bottles to ensure patient safety in the future. The crisis was thus a springboard for improving the product and strengthening the perception of the company’s fundamental principles both internally and in the marketplace.
In 2015, Volkswagen was found to be involved in a comprehensive swindle with measurements of toxic NOx emissions from 11 million Volkswagen diesel-driven vehicles. The group’s top executive, Martin Winterkorn, had to resign immediately, while the world press, the customers, and the German government waited to see what the world’s second-largest carmaker would do.
Initially, Volkswagen put the focus on its coming electric cars and then went relatively silent, betraying the trust in the brand. As a consequence, the confidence in the brand and the Volkswagen stock price only recovered slowly. Yet, if the company’s new management was to successfully bring the VW brand back to its historic greatness in the long term, they would have to get to the front of the industry and show how swindling with toxic emissions could be avoided and how a trustworthy car manufacturer acts in today’s world.
Volkswagen’s original purpose of creating a car for the people contains – as does the company name – an opportunity to develop after the crisis. How can VW become a car for the people to a greater extent than before? Through which products, services, and communication will VW become not just “of the people” in perception but also in practical terms?
If the new management exploits the critical situation and uses it in an age where social interaction, social (environmental) control, sharing economy, and democracy take on new forms, and new global importance, it can lead to a new interpretation and a new meaningful life to the authentic company behind “the people’s car”.