Guest Post: Wal-Mart’s and Southwest’s magic

February 18, 2009, 11:10 PM UTC
Photo courtesy of Dave Mead

When the ashes clear from this economic Armageddon, the leaders and organizations left standing will be the ones that stand for something. That have a clear purpose.

I’m sure of this because I worked with two CEO-founders who indeed stood for something: Herb Kelleher of Southwest Airlines and Sam Walton of Wal-Mart . I worked with these iconic entrepreneurs on their companies’ advertising, marketing and internal culture. They taught me that performance is driven by the core purpose of an organization. This is true particularly when crisis is all around.

So what is purpose anyway? Purpose is the definitive difference you make in the marketplace and the world.

During more than 30 years, when I worked up close and personal with Herb Kelleher, he preached and practiced the purpose of Southwest Airlines every day. Herb’s purpose? To democratize the skies. Herb was in the Freedom business. He used to always say, “Keep costs low and spirits high and the people of Southwest Airlines will keep LUV in the air.”

By making a difference, Herb’s company made money and made history. In 1971, only 15% of the American people had flown because air travel was reserved for the elite. Southwest Airlines helped to change that. Today, over 85% of the American people have flown.

The legendary Sam Walton called me “Ol’ Roy,” after his dog and also after Wal-Mart brand Ol’ Roy dog food. In fact, I was the person who got Sam Walton and Herb Kelleher together for the first time. It was a dinner in 1990 that any CEO would have given anything to be a part of.

And it was a few years before that I heard Mr. Sam, as he was called by so many of his friends and associates, first articulate the purpose of Wal-Mart. “At Wal-Mart, we are in business to save people money so they can live better,” he said. And now “Save money. Live better,” a powerful purpose statement that we helped rediscover, is the company’s tag line and is embedded in its culture worldwide.

Today, 88% of Americans agree that “what a company stands for is more important than what it sells.” And according to a recent Cone Inc. study of Millennials, 79% want to work for a company that cares about how it impacts or contributes to society.

Purpose isn’t everything. But more than ever, purpose trumps everything.

Roy Spence is co-founder and CEO of GSD&M Idea City, a marketing and communications firm whose clients include Southwest Airlines, MasterCard , John Deere and BMW . Also founder of the Purpose Institute, he co-authored It’s Not What You Sell, It’s What You Stand For: Why Every Extraordinary Business is Driven by Purpose, just published by Portfolio.

For more on Wal-Mart, read Suzanne Kapner’s piece on the changing of the guard at Wal-Mart as Lee Scott hands the reins to new CEO Mike Duke.