"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, Cover Girl, and Pampers.
The central argument of Stengel's book is 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 this lofty 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, they returned nearly 400% in a decade largely flat for the S&P 500.
Last month, we looked at three of those 50. Here are three more -- each having at its core a brand ideal that touches at least one of the five fundamental human values Stengel deems necessary for a brand's success:
The fundamental human value this Internet wunderkind touches on is "inspiring exploration," which Stengel defines as "helping people explore new horizons and new experiences." From the beginning of 2001 to the end of 2010, Amazon posted a return of nearly 1,200%.
Amazon.com began as a place simply to buy books and music online. Gradually, it started offering more and more, until now almost everything under the sun is available, all from the same site. Shopping on Amazon is a very organic, holistic experience. The recommendation and customer review features have turned me, and I'm sure countless others, onto many new products, artists, and ideas.
With streaming video and the Kindle, Amazon continues to move beyond any preconceptions of what it is or isn't, and inspire exploration in the true Stengel spirit. Compare this with Barnes & Noble
The fundamental human value this tech stalwart touches on is "impacting society," which Stengel defines as "affecting society broadly, including by challenging the status quo and redefining categories." Over the 10-year period from early 2001 to late 2010, IBM nearly doubled in value.
IBM was founded in 1910, and, until relatively recently, was thought of -- and thought of itself -- as a company that invented machines, manufactured them, and sold them. As late as the '80s, the company was locked in a fight to the death in the PC wars. After almost dying in that war, IBM took stock of its situation and reinvented itself. It got all out of the PC business, and all in to the technology consulting business, making a killing ever since.
IBM continues to invent, however, and still makes some large-scale computing equipment, keeping the best aspects of the old business while fervently embracing the new. As such, it's setting an example that other companies can look to and learn from. Hewlett-Packard
The fundamental human value this credit card company touches on is "inspiring exploration," which Stengel also defines as "helping people explore new horizons and new experiences." Visa just went public in early 2008, but since then, the stock has more than doubled.
"Visa. It's everywhere you want to be." Right there, just in that extraordinarily well-written tagline alone, you learn everything you need to about Visa. Wherever you want to go, whatever you want to do, take your Visa card along and it will be accepted. You won't be turned away from any businesses, and therefore won't be denied any of the services or fun you were counting on. And just the name "Visa" itself is brilliant; The word "visa," of course, is synonymous with "passport," and passports take you to exotic places.
Though both Visa and rival MasterCard offer pretty much the same benefits and services, I've personally always felt pulled in by the Visa name. As such, I've always opted for a Visa over a MasterCard whenever I could. Whatever the deep psychological or facile marketing reasons, the company has done well for itself, for investors, and for the explorers in all of us.
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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