The Starbucks brand is ubiquitous around the world. Beyond grande lattes and frappuccinos, Starbucks has long looked beyond the coffee cup to the company’s broader global responsibility embodied in their mission - “to inspire and nurture the human spirit - one person, one cup and one neighbourhood at a time”. Recently retired executive chairman Howard Schultz refused to see a conflict between profits and performance during his time at the helm, seeking instead to build a “performance-driven company through the lens of humanity.”
But in April this year, the arrest of two black men in one of Starbucks’ Philadelphia cafes, ostensibly for trespassing, suggested there was a serious disconnect with the company’s mission at the store level. The community erupted, boycotting stores.
Starbucks responded by announcing it would close its 8000 stores for four hours on May 29 to run racial bias training for the company’s 175,000 employees.
While Starbucks’ strategy has been both praised and belittled - the company has emphasised it’s just a first step - as a response to racial bias, it shows the challenges companies face in living their stated mission when things get difficult. “This is not an expense,” Schultz told CBS. “This is an investment in our people, in our way of life, in our culture and our values.”
While the Starbucks example is an extreme example, purpose-driven businesses face up to apparent conflicts with their purpose every day.
Indeed, many say the profits vs purpose battle hasn’t been properly raged until markets tip the wrong way. The way a business resolves these questions differentiates those that merely embrace a cause from those that live that cause as a guiding principle.
That’s not to say purpose-driven companies don’t care about profits. Rather, they shift the balance away from the primacy of shareholder value, seeing it as just one important factor. Purpose-driven companies see the path to profit as inherently connected to their broader societal responsibilities, sign-posted at each twist and turn by their values.
No purpose without people
When Korn Ferry looked into the drivers behind 20 high-performing purpose-driven companies, one thing stood out: these organisations engage with their people and the outside world differently to traditional businesses. Indeed, of the 20 organisations studied, 94% saw people as their top priority.
Leaders of these organisations know that people are the power behind their purpose; that people make the everyday decisions that determine whether a business lives its purpose or not. As a result, their people practices are designed to support their wider purpose from the ground up.
What purpose really looks like
Strong people practices are what make an organisation’s purpose real, translating it from the poster on the wall into real-life operation through:
- Recruitment and onboarding: Purpose-driven organisations look for people who connect with their purpose. They hire the whole person, not just another set of skills.
- Leadership development: Leaders are encouraged to fully realise their own purpose, as connected to the wider organisation’s values, as a foundation for developing vital leadership competencies and skills.
- Robust and open internal and external communication: Transparency is critical, enabling employees and stakeholders to see how purpose and values inform decisions, processes, and procedures. These businesses also let the outside in, opening supply chains to scrutiny and giving the public confidence in how things are made.
- Measuring what matters: Holistic contributions are valued above business performance alone. Employees are evaluated on their overall performance and positive impact on the culture, people and purpose.
Together, these practices engender an ownership mindset among employees, tapping into their deeper values. It creates a workforce willing to go the extra mile, fueled by commitment to performance for purpose, not merely profit.
Learn more about purpose-driven performance in our paper, People on a mission.