Guided by our SMO’s US-based consultant, Justin Lee: Purpose-driven organization management tips “Learn from the Strategy of Purpose Driven Brands”.
Here’s a case study from IBM.
– A case study on the transformation of the business model centered on their Purpose –
Let’s Put Smart to Work
“Let’s Put Smart to Work” – In 2018, IBM unveiled a concept that would become a new branding platform. The concept focuses on introducing a number of stories about how IBM’s technology creates change in society.
When the pandemic hit in early 2020, IBM was unable to roll out its originally planned communication strategy and hastily switched to a new one. It focused on how IBM technology is being used to solve urgent problems caused by the Covid-19 pandemic. In other words, IBM’s solutions are enabling e-commerce transactions that are essential to our lives today, whether it’s facilitating life-saving efforts in hospitals or ensuring that supply chains keep moving to deliver groceries to the people.
In business English, this act of changing the direction of a plan instead of following it is called pivoting. However, it’s not just a change of direction, it’s a change based on something.
Pivoting is not new to IBM. Indeed, it has made bold pivots many times in its history of more than 100 years and has transformed itself.
A Giant in the BtoB World That Continues to Change
In the 1980s, IBM emerged as the leader in the PC industry, but as the market became more competitive and saturated, it became harder to maintain that position. Billed by the media as a “dying dinosaur,” IBM withdrew from the PC market in the 2000s. However, IBM restructured its business model and undertook a transformation from a product manufacturer to a service-oriented integrator, with the business concept of “e-business” at the forefront. Furthermore in the 2010s, IBM held the concept of “Smarter Planet,” something many have heard of at least once, foresaw the potential and importance of data and the cloud, reshifting its business domain from a hardware business to platform business. And the concept of “Smarter Planet” evolved into “Let’s put smart to work” mentioned at the beginning.
Further back to the time of its founding, one of the tools provided by IBM, which started as a tool maker, was a cheese cutter. They have reached the current area by repeatedly pivoting their business areas.
The Key that Made Change Possible
Significant changes are often seen in IBM’s history. What makes these changes possible? In a 2019 interview, former CEO Gini Rometi said about the key to the company’s success: “Be clear about what ‘never changes.’ That’s the company’s Purpose. IBM’s Purpose is always To remain “be essential” in some way in the world.You must be clear about what your Purpose is, because Purpose is at the heart of everything people do. Because it’s in there,’ she said.
The definition of Purpose
Let’s recap what the former IBM CEO meant by the word Purpose. According to the English dictionary, “Purpose” has two meanings. The first is “object” and “aim”, and the second is “reason and significance [of existence, etc.]”. This second connotation is often implied when companies talk about Purpose. Purpose, so to speak, is the simplest and purest expression of why a company exists. And there is a third connotation that is not in the dictionary. In a speech at Harvard University, Facebook founder Mark Zuckerberg said, “Purpose is that sense that we are part of something bigger than ourselves, that we are needed, that we have something better ahead to work for. Purpose is what creates true happiness.” In other words, in addition to Purpose and reason for existence, it also includes connotations such as “aspiration” and “cause.”
Centered on Purpose
IBM has always switched business concepts and strategies that are suitable for the business environment, centered on Purpose. The author calls this change in business direction centered on Purpose a “Purpose Pivot.” The idea of changing behavior based on the “why” of a company or brand is simple yet powerful. When Purpose Pivot is always on one’s consciousness, their actions always rely on beliefs, and consistency is maintained.
In addition, persuasion to all stakeholders is essential for a change of direction. It will be easier to convince them if you can explain that even if the direction changes, the Purpose they understand is the axis and the essential Purpose remains the same.
In this way, the Purpose Pivot is a very effective way of thinking in emergencies like pandemics, and even in normal situations, when you have to decide where to go next.