Jim Stengel, once the star marketing boss at P&G, tells how the best companies grow faster than their rivals. First, get the values right.
This is Part 1 of a series for Fortune.com by Jim Stengel, former global CMO of Procter & Gamble and author of Grow: How Ideals Power Growth and Profit at the World’s Greatest Companies. In today’s Guest Post and in five more over the next five Fridays, Jim digs into the best practices of the best ideal-based companies and explores how they outgrow their competition.
FORTUNE — Top-line growth is and always has been the first priority for every smart business leader. Yet lately, the conversations about growth are becoming more urgent, even frantic, as developing markets slow and competition seems to come from everywhere.
With top-line growth so elusive, why aren’t more leaders acting on the abundant learning on how to grow businesses?
Two years ago I published my first book, Grow: How Ideals Power Growth and Profit at the World’s Greatest Companies. The book is based on a 10-year study of 50 high-growth brands, combined with stories and lessons from my 25-year career at Procter & Gamble. The central theme of the book: brands that articulate and activate a higher ideal — in all they do — are rewarded with especially high rates of growth.
My book is just one of many recent explorations of the power of an ideals-based, or purpose-based, approach to growing a business. Adam Grant’s Give and Take and Daniel Pink’s Drive are two other examples.
I learned the fundamental rules of growing businesses at P&G, where I saw remarkable growth by dozens of P&G brands in dozens of countries when leaders acted on ideals. Now, in my consulting practice, I see similar results when leaders activate ideals — and I see others struggle when they fail to do so.
So I went on a year-long, global road trip with a colleague, Professor Chris Allen from the Carl H. Lindner College of Business at the University of Cincinnati. We wanted to discover practical wisdom, to get “granular,” to shed light on the behaviors and practices of leaders who are activating ideals and outgrowing their competitors.
We traveled roughly 40,000 miles interviewing dozens of senior leaders. We visited companies that have growth heritages and can-do cultures and consistent track records of top-line success. But we also sought out companies that are facing headwinds and are at different points on the growth curve. We met with established giants like IBM and Unilever and upstarts like Method and Innocent, a drinks business now part of Coca-Cola . We spent time inside mighty market leaders like Louisville Slugger, Edmunds.com and online shopping giant Rakuten. We also visited innovative stalwarts like Discovery Communications , Intuit , and Motorola Solutions .
In the weeks ahead, we’ll share what we discovered, and we’ll organize the lessons by several themes or topics.
Some of our road-trip learning is about never losing sight of the basics. Method, the environmentally progressive cleaning-products company, totally gets that. And management is building on its ideals, literally, by putting its first manufacturing on the south side of Chicago — with a 225-foot-tall whirling billboard that doubles as a wind turbine and powers the factory.
We also realized the importance of distilling a company’s ideals into stories that can be readily told and shared with customers and employees. Louisville Slugger, which promises “to make players great,” and car-buying service Edmunds.com, which professes to be about “simplifying life’s big decisions,” are masters of storytelling. So is Motorola Solutions, the data communications and telecom equipment company that successfully transformed out of old struggling Motorola. “We help people be their best in the moments that matter” is Motorola Solutions’ promise and the core of every story it tells.
We think this Fortune series will be a step forward in helping leaders practice what they’re preaching about how to grow — and yes, actually help them accelerate top-line growth.
For seven years until 2008, Jim Stengel was the chief global marketing officer at Procter & Gamble , where he oversaw an $8 billion advertising budget and 7,000 employees. Now heading a consulting firm/think tank aptly called The Jim Stengel Company, he advises companies on how to grow globally by driving ideals. He’s the author of Grow: How Ideals Power Growth and Profit at the World’s Greatest Companies, which uses a 10-year study involving 50,000 brands to show how at the best companies, financial performance relates to an ability to connect with fundamental human emotions, values and greater purposes. Stengel, 58, is also an adjunct professor at the UCLA Anderson School of Management and on the board of directors of AOL . He’s writing this series for Fortune.com with Chris Allen, the Arthur Beerman Professor of Marketing at the University of Cincinnati.