You cannot innovate if your brand stands for your products and services alone. While adopting a culture of innovation has many benefits — finding new, more efficient ways to work, staying connected to a more active consumer and product diversification to name a few — it can also appear insincere if your brand doesn’t already have a reputation for it.

The best case scenario is it looks like another attempt at making more profits. The worst case scenario is your leadership looks unfocused and scares your stakeholders, particularly the more conservative ones. While you can’t build a reputation for innovation overnight, what you can do is focus on something higher in the proverbial Maslow’s hierarchy of needs — something beyond what you make and do today — your essential value and purpose; the reason you exist in the world.

Tea and yoga pants

Let’s say you are an 80-year-old tea company.  You are loved by customers across the globe because you make the absolute best tea ever. Your brand is so about tea that people start using your name to mean “having tea.”  Years pass, rapid growth stabilizes, tea drinking slows. Shareholder pressure to grow pushes you to try something new. You try selling yoga gear at your shops because your research team says the demographics allow for it.  How will the market respond?

The answer is, it depends.

If you’re a company whose brand stands for tea, then you are going to look like a sellout. Your loyal customers will begin to question your tea’s quality and your integrity. I mean how could you make great tea when you’re now competing with lululemon?

People don’t buy what you do; they buy why you do it.

If you’re a company whose brand stands for helping busy people lead more balanced and holistic lives — then you might look bold and responsive. Your customers might appreciate you serving more of their needs. It might even drive them to buy your yoga line because they will know it is going to be as good as the tea you’ve delivered for decades and mindful of their desire to live less stressful and more balanced lives.

While this example might be a little imaginative, the point remains. Understanding what your purpose really is and articulating it clearly, provides you the latitude to experiment without punishment. It gives you relevance in an exponentially dynamic market, promotes cross-functional collaboration within and provides a sustainable way to connect with people — whether they be your customers or potential talent. As Simon Sinek says, “People don’t buy what you do; they buy why you do it.  What you do simply proves what you believe.”

Purpose: Innovation’s best friend

Purpose gives you permission to innovate. Why can a car company make a home battery without the market blinking an eye? It’s because Tesla isn’t a car company at all; they exist to accelerate the world’s transition to sustainable energy, not make cars. That’s the kind of latitude you get when you focus not on the things you do but on the reasons that you do it.

Nike is another exceptional example. With their broader focus on inspiring the athlete to reach full potential, the company has created a seamless foundation for going far beyond the footwear that brought it to the market and into the boundless territory that is sports — be it training, equipment, sponsorships or wearable technology.

Purpose encourages cross-collaboration When an organization, or a partnership for that matter, has a purpose everyone can believe in, it serves as the foundation for previously disparate groups — be it accounting and marketing or the New York and Singapore offices — to come together and make something great. That’s important not just because collaboration is cool, but because it’s the exchange of ideas between different people and cultures that drives innovative thinking.

Purpose positions your brand in an uncertain future The future of your products in an era where making has been democratized and knowledge is accessible to everyone, is more uncertain than ever. Riding your brand on what you make today is a risky proposition.

Purpose, however, is evergreen — as your reason for existing can be realized no matter what the circumstance. As Theodore Levitt, an American economist and Harvard Business School professor pointed out in his epic paper Marketing Myopia, had the rail companies realized that their value was to transport people versus making railcars, they might have become car, truck or even aircraft companies. Instead they stopped growing, even when demand more transportation was on the rise.

Purpose attracts innovative talent

Anyone can offer someone a job, but a purpose-driven company can offer an opportunity to do something bigger. Having a clearly articulated purpose is critical in attracting talent that thinks in terms of impact and not tasks — those that think outside the box. This is particularly important in highly competitive job markets where competing for the best and brightest talent on benefits alone might be too expensive and fruitless a proposition.

Last but not least, people care. Perhaps driven by a values-obsessed millennial generation, consumers care about your beliefs now more than ever before. They like to feel that their purchases are contributing to something other than the things they buy. For organizations, that’s opportunity to stand out from the competition, because while anyone can make what you make, your purpose is uniquely yours.

As the pressure to innovate, be innovative, do something innovative builds and you push your organization to move forward and think differently, remember that you can’t do anything in big and new without knowing why. Understanding what drives you and being clear about it — be it as a person or as a global brand — is the foundation for authentic relationships with others. And who can afford to lose trust these days?

Reposted from May 2016