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 GROW: How Ideals Power Growth and Profit at the World’s Greatest Companies Discussion Guide This serves as the discussion guide to Grow, by Jim Stengel. ISBN-­‐978-­‐0-­‐307-­‐72035-­‐1. The guide will provide questions to stimulate discussion and better understanding of the material. This guide is to be used with the book, and some suggested answers to the discussion questions are provided. Chapter 1 – The Ideal Factor Discussion Questions: 1. What is the importance of having a Brand Ideal? 2. Can multiple companies have the same Brand Ideal? 3. Is it enough to have a Brand Ideal? 4. How much of the capitalization of firms lies with the value of their brands? 5. Are Brand Ideals long-­‐lived? 6. How does it help leaders motivate? ©2013 Jim Stengel Company
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Answers to Chapter 1 Discussion Questions: 1. What is the importance of having a Brand Ideal? A brand ideal is a business’s essential reason for being, the higher-­‐order benefit it brings to the world. A brand ideal of improving people’s lives is the only sustainable way to recruit, unite, and inspire the thoughts, feelings, and actions of the people a business touches, from employees to customers. The central principle of the new framework is the decisive importance, for any business, of having a brand ideal, a shared goal of improving people’s lives. 2. Can multiple companies have the same Brand Ideal? Yes. Many companies can want to make a contribution to society through the development of technology. To put that into practice is the real test. 3. Is it enough to have a Brand Ideal? No, one must also: a. Discover an ideal in one of five areas of fundamental human values b. Build your culture around your ideal c. Communicate the ideal to engage employees and customers d. Deliver a near-­‐ideal customer experience e. Evaluate the business progress and people against your ideal 4. How much of the capitalization of firms lies with the value of their brands? In 1980 virtually the entire market capitalization of an S&P 500 company consisted of tangible assets (cash, offices, plants, equipment, inventories, etc.). In 2010 tangible assets accounted for only 30 to 40 percent of a company’s market capitalization. The rest of its capitalization consisted of intangible assets, and about half of that — 31 percent of total market capitalization — came from the brand. 5. Are Brand Ideals long-­‐lived? Highly adaptive and flexible, a brand ideal is not tied to a particular business model and has no expiration date. It generates effective new business models, strategies, and tactics before the current ones have lost their freshness and begun to produce diminishing returns. On the other hand, the surest route to business obsolescence is ignoring or misunderstanding the significance of ideals. ©2013 Jim Stengel Company
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6. How does it help leaders motivate? Most important, a brand ideal enables leaders to drive results by being absolutely clear and compelling about what they value. Few leaders articulate that well. It can’t just be numbers and money. Numbers and money alone will not motivate and drive great performance and bring or keep valuable people on board. The higher your position as a leader, the simpler and more robust your message must be to translate across varied individuals, teams, groups, divisions, and business units. Ideals do that because they speak to universal human instincts, hopes, and values. ©2013 Jim Stengel Company
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Chapter 2 -­‐ The Stengel Study of Business Growth Discussion Questions: 1. What is the Stengel Study of Business Growth? 2. What are business artists? 3. Why should businesses be led by brand artists? 4. How does the choice of the time period impact how companies do? 5. What are some underlying economic and technological trends during the period of study? 6. How does the inclusion of the Great Recession in the period of study impact the results? 7. What does the study of the brain tell us about brand loyalty? ©2013 Jim Stengel Company
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Answers to Chapter 2 Discussion Questions: 1. What is the Stengel Study of Business Growth? The Stengel Study of Business Growth is the “only brand value study that correlates the extent of people’s bonding with brands and the growth in those brands’ financial value.” The study “correlates the extent of people’s bonding with brands and the growth in those brands’ financial value.” 2. What are business artists? The business artists in the Stengel 50 excel at: -­‐ Discovering a brand ideal that can drive growth by connecting the business with fundamental human values -­‐ Building the business culture around the ideal -­‐ Communicating the ideal internally and externally -­‐ Delivering a near-­‐ideal customer experience -­‐ Evaluating the whole business against the ideal 3. Why should businesses be led by brand artists? These [fast-­‐growing, highly profitable] companies were led by brand artists who had “even greater clarity, consistency, commitment, and creativity in the way they leveraged the power of ideals.” “[Using brand artists] enabled these businesses to operate at a faster clip than we did, to act — very effectively — on intuition more than we did, and to create imaginative brand experiences that went well beyond the basic functionality of their products and services.” 4. How does the choice of the time period impact how companies do? Any time period is arbitrary, some firms will make the cut and some will not depending on business conditions of the time. 5. What are some underlying economic and technological trends during the period of study? The period coincides with the massive growth of the BRIC countries and emerging nations in general. A huge labor force was now entering their second decade on the world scene, driving down manufacturing costs, reducing manufacturing ©2013 Jim Stengel Company
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employment in the advanced economies and creating a huge new lower middle class in the emerging economies who all of a sudden have some discretionary income. Computing power has grown exponentially while its price has fallen. This allowed more information to be processed cheaply, lowered the costs of automation, providing a premium for those able to marshal those forces. At the same time much of the manufacturing work had become automated, some basic clerical tasks were also either automated or offshored to lower costs nations, who through the more inter-­‐connected world were able to take on these tasks. There has been a growing awareness of the environment and a greater health-­‐
consciousness among the population. 6. How does the inclusion of the Great Recession in the period of study impact the results? Its inclusion may favor more recession-­‐proof industries such as luxury goods and hinder those that produce discretionary products and services targeting the broader middle class. Looking at mid 2003–mid 2013 for HP would show only a 20% total gain in the stock price over the ten year period. 7. What does the study of the brain tell us about brand loyalty? The application of neuroscience, the study of the human brain and nervous system, to the study of brand loyalty is yielding interesting results. Neurological testing involves a combination of electroencephalography (EEG) and sophisticated eye tracking equipment that records exactly where a person is looking while experiencing a stimulus. Measurement of electrical activity is then made in the parts of the brain where the subconscious lies. This includes the amygdale, which is a main region for the processing of emotional reactions. The Five Areas of Fundamental Human Values • Eliciting Joy: Businesses in this field have brand ideals of improving people’s lives by activating experiences of happiness, wonder, and limitless possibility. • Enabling Connection: Businesses in this field have brand ideals of improving people’s lives by enhancing their ability to connect with each other and the world in meaningful ways. ©2013 Jim Stengel Company
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• Inspiring Exploration: Businesses in this field have brand ideals of improving people’s lives by helping them explore new horizons and new experiences. • Evoking Pride: Businesses in this field have brand ideals of improving people’s lives by giving them increased confidence, strength, security, and vitality. • Impacting Society: Businesses in this field have brand ideals of improving people’s lives by affecting society broadly, including by challenging the status quo and redefining categories. ©2013 Jim Stengel Company
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Chapter 3 -­‐ The Ideal Tree Framework Discussion Questions: 1. What is the Ideal Framework? 2. What are the Five Must-­‐Dos? 3. How did Method leverage their ideal for growth? 4. How do they recruit to make their culture? 5. How do they make sure communication is consistent? 6. How do they innovate and keep in touch with their customers? 7. How do they measure themselves against their ideal? ©2013 Jim Stengel Company
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Answers to Chapter 3 Discussion Questions: 1.
What is the Ideal Framework? The root structure of the Ideal Tree has two elements: the beliefs of the people inside the business and the values the business shares with customers and end users. Their dynamic interaction anchors and supports the base of the tree: the business’s ideal. 2.
What are the Five Must-­‐Dos? • Discover an Ideal in one of five areas of fundamental human values • Build your culture around your Ideal • Communicate the Ideal to engage employees and customers • Deliver a near-­‐ideal customer experience • Evaluate the business progress and people against your Ideal 3.
How did Method leverage their ideal for growth? They believed there was a market for green products that could clean well. They had trucks run on bio-­‐diesel, their products were completely innocuous to people, and they reinforced their image with beautiful product design. 4.
How do they recruit to make their culture? The heart of organizational culture is how you deal with human resources issues. If you don’t hire, train, interact with, manage, promote, and reward your people based on your ideal, you will never bring the ideal to life for customers. Method’s management spends a lot of time on the hiring process. Each new position is assigned a hiring manager who assembles a cross-­‐functional team of seven to do interviews. Short-­‐listed prospective hires are asked to perform studies for the company to show their abilities. They also provide a sixty-­‐day period to onboard new hires. 5.
How do they make sure communication is consistent? Its ideal is to bring employees and others together as equal members of “people against dirty.” They constantly monitor the feedback on their online communication. They communicate through their packaging, and with their customer service. ©2013 Jim Stengel Company
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How do they innovate and keep in touch with their customers? They understand that it is both their product innovation as well as their design innovation that makes their product succeed. The aesthetics of the packaging attracts the customers and the efficacy retains them. “The design director [has] to weigh the influence of operations, marketing, the supply chain, the business side, and the retail and consumer experience, and massage them together.” How do they measure themselves against their ideal? Everything Method does, says Andrea Freedman, “should be able to answer four questions with yes. Does it have style? Does it have substance? Does it create an advocate? Does it meet our gross margin hurdles?” The monthly scorecard focuses on building consumer awareness, developing the new product pipeline, and getting early insight into business trends. The quarterly survey “has a section on people and environment with questions like ‘Have you gotten feedback from your manager in the last sixty days?’ and ‘Do you understand how your work contributes to our strategy?’ ” Individual employee evaluations strike the same balance, duplicating the way the recruiting process is based fifty-­‐fifty on skills and culture fit. They [measure] a triple bottom line of financial, environmental, and social impacts. They make sure their retail partners have healthy margins too. ©2013 Jim Stengel Company
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PART TWO -­‐ The Five Must-­‐Dos Must-­‐Do Number 1 Discover an Ideal in One of Five Areas of Fundamental Human Values Discussion Questions: 1. What is the purpose of the Brand Ideal? 2. What are the Five Areas of Fundamental Human Values? 3. How does having an Ideal energize the company? 4. How does one find this Ideal? 5. How does one know it is the correct ideal? 6. What other questions need to be explored? ©2013 Jim Stengel Company
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Answers to Must-­‐Do Number 1 Discussion Questions: 1. What is the purpose of the Brand Ideal? Discover an ideal for a business by finding a link between its central reason for being, the core beliefs of its people, including senior leadership, and the fundamental values of customers. The evidence from the Stengel Study is that nothing builds a higher level of trust, and the great teamwork that comes with it, like the shared meanings and emotional bonds that a life-­‐improving ideal generates. 2. What are the Five Areas of Fundamental Human Values? -­‐ Eliciting Joy -­‐ Enabling Connection -­‐ Inspiring Exploration -­‐ Evoking Pride -­‐ Impacting Society 3. How does having an Ideal energize the company? Nothing builds a higher level of trust, and the great teamwork that comes with it, like the shared meanings and emotional bonds that a life-­‐improving ideal generates. The story of your brand ideal is the story of who you aspire to be as a business, and every part of the business must express this in a unified way that is true to those aspirations. 4. How does one find this Ideal? One finds the ideal by exploring the heritage of the company. One looks for it in the hopes/dreams of the founders. Discover the company’s creation “story.” What have been the defining moments in the brand history? What core values/beliefs have been held throughout the history of the Company? One also needs to know who are brand’s most important customers, their hopes and dreams, and their values/beliefs. Find out how does the brand fulfill them (consider functional and emotional benefits). ©2013 Jim Stengel Company
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Four Questions that must be answered to find the Brand Ideal: -­‐ How well do you understand the people who are most important to your business’s future? -­‐ What does the business stand for in their eyes? -­‐ What do you want the business to stand for? -­‐ How are you bringing these things to life? 5. How does one know it is the correct ideal? Whether a Brand can exist depends on whether it can answer the following questions in the affirmative: -­‐ Does the Brand stand for something truly desirable and valuable in consumers’ eyes? -­‐ Does it have an aspirational ideal that was motivating to employees and consumers? -­‐ Does it have a strong point of difference from the competition, emotionally and functionally? -­‐ Does the business model make financial sense? 6. What other questions need to be explored? An effective ideal needs to balance inspiration with true actionability. How does the brand ideal differentiate the brand from its competitors? What, if any, higher order Ideals are driving competitive behavior? What sets the brand apart from competition? How might the Brand Ideal strengthen its competitive position? ©2013 Jim Stengel Company
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PART TWO -­‐ The Five Must-­‐Dos Must-­‐Do Number 2 Build Your Culture Around Your Ideal Discussion Questions: 1. Why is the organizational culture important? 2. How does one build the culture? 3. How does the culture impact exterior communications? ©2013 Jim Stengel Company
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Answers to Must-­‐Do Number 2 Discussion Questions: 1. Why is the organizational culture important? Organizational culture is a term describing the psychographics of an organization. There are certain dominant tendencies, and preferred ways of thinking and doing. These are determined to a large extent by its leadership, the kinds of people hired, and institutional history. These tendencies may sometimes be recorded both in official rules as well as in unwritten rules. The people in the organization internalize the culture as they watch the actions of others, and observe how these actions are rewarded, punished or ignored. In some organizations the culture may also be reinforced by hiring based on selection of some common characteristics. Ideal-­‐ based businesses understand that organizational culture makes or breaks an enterprise. The heart of organizational culture is how you deal with human resources issues. 2. How does one build the culture? Hire people who reflect the values one wants. Management must follow the dictates of those values. Management must evaluate and promote according to those values. 3. How does the culture impact exterior communications? Research [showed] people’s ability to sense if the people behind a brand are bored and disengaged, simply by looking at the advertising, shelf presence, and packaging. ©2013 Jim Stengel Company
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PART TWO -­‐ The Five Must-­‐Dos Must-­‐Do Number 3 Communicate Your Ideal to Engage Employees and Customers Discussion Questions: 1. Why is it necessary to communicate the ideal? 2. How does the business keep its communications on the same page? 3. How does one create great communication? 4. What kind of communications is needed? 5. How do you know how well you are doing? ©2013 Jim Stengel Company
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Answers to Must-­‐Do Number 3 Discussion Questions: 1. Why is it necessary to communicate the ideal? The quality of our communication determines the quality of our relationships. Communicate the ideal to engage employees and customers. Communication is the set of activities involved in conveying information internally and externally. It is the messages emanating from an organization to its audiences, such as employees, media, channel partners and the general public. The communication may be official or unofficial, and it may be intended or unintended. The medium can be through correspondence, paid media, packaging, infrastructure, social media or word-­‐of-­‐mouth. Communication is the key understanding the customer, motivating the employees, to delivering great customer service, and focusing the management on the correct objectives. 2. How does the business keep its communications on the same page? A business’s communication must be holistic, an organic whole in every sense. The way to get there is through high levels of emotional intelligence, which begins with great listening skills. Create a brand franchise leader with decision-­‐making authority who is accountable for brand ideal or purpose, communication strategy and plan, visual identity, innovation strategy, and all areas related to the brand ideal. 3. How does one create great communication? Great communication requires hiring skilled writers. Much is communicated in text via packaging, the web, and social media and great writers can straddle the line between external and internal communication. Create a “communications brief” that serves as a strategy document and inspires and guides communication choices for the people you seek to delight. It includes key quantitative information, such as business objectives and success criteria; insights about the people you seek to delight; and the action you want the communication to influence. ©2013 Jim Stengel Company
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4. What kind of communications is needed? Communication both internally and externally must move away from one-­‐ way, paternalistic, intrusive, and solely rational to two-­‐ way, invited, rational and emotional communication. 5. How do you know how well you are doing? Measure your communications as you would measure a loving, loyal relationship. ©2013 Jim Stengel Company
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PART TWO -­‐ The Five Must-­‐Dos Must-­‐Do Number 4 Deliver a Near-­‐Ideal Customer Experience Discussion Questions: 1. Why place the customer experience at the core of the business? 2. How does one create a near–ideal customer experience? 3. What kind of environment should we create for our people and our customers? 4. How should companies get to know their customers? ©2013 Jim Stengel Company
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Answers to Must-­‐Do Number 4 Discussion Questions: 1. Why place the customer experience at the core of the business Everything your business does comes together with the experience you provide customers. It’s not only your product or service but how people learn about it, buy it, use it, live with it, and share the quality of the experience with others. 2. How does one create a near-­‐ideal customer experience? A brand ideal powerfully inspires continuous innovation against a higher-­‐ order benefit. One must establish a process of innovation, collaborate widely with suppliers, customers and competitors. Make innovation the foundation for a better experience is a crucial senior leadership responsibility, starting of course with the ideal, the higher purpose a business aspires to serve. Only senior leaders in an organization can create the culture for innovation to thrive, and only senior leaders can direct attention, people, and resources to this effort and keep it forever improving. 3. What kind of environment should we create for our people and our customers? Every business needs to create an environment for its people that enables them to be themselves, have fun, and learn and grow as people. 4. How should companies get to know their customers? Seek deep understanding of the customers. It is important to experientially understand customers and their lives. ©2013 Jim Stengel Company
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PART TWO -­‐ The Five Must-­‐Dos Must-­‐Do Number 5 Evaluate Your Progress and People Against Your Ideal Discussion Questions: 1. What questions should be asked about business progress? 2. How is evaluating the business against the Ideal important? 3. How should one measure a Brand Ideal to drive sustained growth? 4. What are some measures of brand health? ©2013 Jim Stengel Company
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Answers to Must-­‐Do Number 5 Discussion Questions: 1. What questions should be asked about business progress? Is it [brand value] driving growth or decline? Is it attracting new customers and building great relationships with them while strengthening the bond with existing customers? Or is it losing its attraction for both existing and new customers? Is the health of your brand inspiring employees and partners, or is its hollowness disillusioning them? 2. How is evaluating the business against the Ideal important? Nothing is more symbolic than changing what a company evaluates; it goes to the core values of the company and its leadership. It shapes strategy making and governs who advances within the company. 3. How should one measure a Brand Ideal to drive sustained growth? -­‐ Measure your progress against your ideal with the customers and stakeholders most important to your future. -­‐ Define your key performance indicators in terms of your ideal. -­‐ Measure your people against your ideal by making contributing to the ideal part of every employee’s work plan. -­‐ Measure and reward time spent with customers and end consumers. 4. What are some measures of brand health? Employee engagement with the ideal, corporate reputation, effectiveness of advertising, trial and loyalty, trust. ©2013 Jim Stengel Company
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The Stengel 50 and Their Brand Ideals
Brand Accenture Airtel Amazon.com Apple Aquarel BlackBerry Calvin Klein Chipotle Coca-­‐Cola Diesel Discovery Communications Dove Emirates FedEx Google Heineken Hennessy Hermès HP Hugo Boss IBM Innocent Jack Daniel’s Johnnie Walker Lindt L’Occitane Louis Vuitton MasterCard Mercedes-­‐Benz Method Moët & Chandon Natura Pampers Ideals Statement To help people accelerate ideas to achieve their dreams. To enable people in India and southern Asia to enjoy and benefit from local, regional, national and global conversations. To enable freedom of choice, exploration, and discovery. To empower creative exploration and self-­‐expression. To provide healthy hydration to people and their communities. To connect people with each other and the content that is most important in their lives, anywhere, anytime. To define modern luxury. To empower people to positively impact food culture. To inspire moments of happiness. To inspire imagination and endless possibilities in style. To satisfy people’s curiosity about their world and the universe. To celebrate every woman’s unique beauty. To connect people with the world through a new lens of perception. To deliver peace of mind to everyday interactions. To immediately satisfy every curiosity. To help men be worldly – resourceful, confident, open-­‐minded, cosmopolitan. To savor satisfaction in life’s accomplishments. To celebrate timeless luxury craftsmanship. To foster the human capacity to innovate, progress. To evoke confidence through European sensibility. To help build a smarter planet. To make it easy for people to do themselves good. To celebrate and evoke pride in personal authenticity, independence, and integrity. To celebrate journeys of progress and success. To provide joy through small luxuries. To share natural and cultural traditions. To luxuriously accentuate the journey of life. To make the world of commerce simpler and more flexible. To epitomize a life of achievement. To be a catalyst in a happy, healthy home revolution. To transform occasions into celebrations. To promote well-­‐being and strengthen relationships. To help mothers care for their babies’ and toddlers’ healthy, happy development. ©2013 Jim Stengel Company
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Petrobras Rakuten Ichiba Red Bull Royal Canin Samsung Sedmoy Kontinent Sensodyne Seventh Generation Snow Beer Starbucks Stonyfield Farm Tsingtao Vente-­‐Privee.com Visa Wegmans Zappos Zara To support the sustainable development of Brazil and every country it operates in. To help the business-­‐consumer partnership flourish. To energize the world. To support people’s lifelong, loving relationships with their pets. To inspire imagination and enrich lives in a world of limitless possibilities. To improve Russian society by elevating the retail experience beyond what was thought possible. To nourish life’s happiest asset, a bright smile. To help human needs and the needs of the planet be one and the same. To celebrate everyday moments of success. To create connections for self discovery and inspiration. To inspire all of us to enhance the health of people and the planet through organically produced food. To infuse the joy of life with the passion of Chinese brewing. To celebrate exhilarating shopping experiences. To provide the freedom to people to follow their passions by providing better money for better living. To transform and heighten people’s interactions with food and drink. To deliver happiness through “wow” service. To democratize fashion trends. ©2013 Jim Stengel Company
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©2013 Jim Stengel Company
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