"Maximum growth and high ideals are not incompatible. They're inseparable."
So states marketing guru Jim Stengel in his new book, Grow: How Ideals Power Growth and Profits at the World's Greatest Companies. Stengel spent seven years as chief marketing officer at Procter & Gamble, managing the world's biggest marketing budget and overseeing the revitalization of such halcyon but then-troubled brands as Jif, CoverGirl, and Pampers.
Stengel's book posits that "a brand ideal" must be at the core of every business. This is "not social responsibility or altruism," he argues, "but a program for profit and growth based on improving people's lives." Stengel backs up his rhetoric with data from a 10-year study of more than 50,000 global brands, from which comes "The Stengel 50." Of the 50 companies he chose, 42 are publicly traded and, as a group, returned nearly 400% in a decade that was largely flat for the S&P 500.
In this series, we've been taking a look at those 50 companies. Here are three more -- each having at its core a brand ideal that touches on at least one of the five fundamental human values Stengel deems necessary for a brand's success.
1. FedEx (NYSE: FDX )
The fundamental human value this cargo mover touches on is "enabling connection," which Stengel defines as "enhancing the ability of people to connect with one another and the world in meaningful ways."
Before FedEx, UPS (NYSE: UPS ) and the post office were the primary choices people had for shipping. FedEx's brilliant "When it absolutely, positively has to be there overnight" tagline and driving corporate philosophy were truly revolutionary at the time. No one else offered the average individual or small-business person the opportunity to send a letter or small package anywhere in the country overnight for a reasonable fee. And FedEx got both UPS and the postal service up off their complacent keisters, forcing them to offer competitive services.
From the beginning of 2001 to the beginning of 2011, FedEx posted a return of 155%. FedEx took the idea of connecting people to a very physical level. Forget email. With FedEx you can still send someone a tangible, touchable item overnight without your last name being Buffett. After all these years, I'm still amazed by the opportunity FedEx offers to reach out and connect to the world in a very concrete manner.
2. Accenture (NYSE: ACN )
The fundamental human value this consulting powerhouse touches on is "impacting society," which Stengel defines specifically as "affecting society broadly, including by challenging the status quo and redefining categories."
Accenture operates in the same world as IBM (NYSE: IBM ) , another member of the Stengel 50. Based out of Dublin, Ireland, Accenture, as Stengel himself puts it, "makes business and technology systems function better." The company offers management consulting, technology services, and outsourcing services. Put more simply, the company is in the solutions business, and does that business successfully all over the world. From the beginning of 2001 to the beginning of 2011, Accenture posted a return of 257%.
IBM has made a killing in this business in the last 20 years, after it bravely and brilliantly reinvented itself from a hardware manufacturer into a consultancy. Accenture, founded in 1995, picked up on the IBM concept and is itself making the most of it, all while making the world run a bit more smoothly.
3. Petrobras (NYSE: PBR )
Like Accenture, Petrobras is also "impacting society." Petrobras' primary business is oil and natural gas exploration and production, for use in Brazil and for export. The company also has a substantial biofuel operation, and dabbles in wind, solar, hydroelectric, and hydrogen energy production. From the beginning of 2001 to the beginning of 2011, Petrobras posted a return of 710%.
Petrobras seeks "to support the sustainable development of Brazil and every country it operates in." A lot of energy companies make the claim of being socially and environmentally responsible, but Petrobras takes it seriously. According to Stengel: "The Global Reporting Initiative, the Reputation Institute, and the Dow Jones Sustainability Index consistently rank Petrobras at the top of the energy industry ... on environmental impact and sustainability." That, combined with great success, is about as good as it gets for any company trying to make a difference.
It's not too late
Stay tuned for further dispatches on the Stengel investing philosophy, as we continue to analyze his five fundamental human values that make a brand successful and delve into the remaining companies on his list.
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