Howard Schultz the former CEO of Starbucks was a speaker at SXSW 2019, at the event he spoke at a session on social and global impact. In the session he addressed the new rules of engagement, he spoke about what it means to be a responsible corporate citizen. During the session, Howard Schultz shared some key insights on brand purpose. Today, we would present some of the key insights he shared during his session at SXSW on brand purpose.
About Howard Schultz
Howard Schultz is an American businessman, he was the Chairman and CEO of Starbucks. He took charge of the coffee chain in the 1980s and turned a regional coffee company into one of the world’s tops brands. Schultz was the brands CEO from 1986 to 2000 and took up the mantle again from 2008 to 2017. He was able to successfully expand Starbucks from 11 stores to more than 28,000 worldwide. He is currently the chairman emeritus of the coffee chain.
What is Brand Purpose?
Brand Purpose is basically a reason why a brand exists beyond making profits. It relates to how a brand’s products and services aren’t just advantageous commercially but how it can also benefit the broader community. This broader community may or may not be customers of the brand.
Starbuck’s has built a reputation for being a brand with a higher and a great brand purpose. The brand is considered to be an inclusive and progressive brand. Starbucks h
Howard Schultz Shares Insights on Brand Purpose at SXSW 2019
Create a Balance between Fiduciary Responsibility and Humanity
During the event, Howard Schultz spoke about the negative comments he received from people. People said his organization won’t grow outside Seattle because of what they were trying to do. They told him that venture capitalist won’t invest in his company if they gave healthcare, ownership and free college tuition to every employee.
He spoke about how he promised these people that they will be able to do all these things while still running a profitable business. Starbucks has been able to do just that since 1992 to date the brands stock value is almost up by 25,000 per cent. Schultz spoke about how the brand was able to create a fragile balance between fiduciary responsibility and the humanity of their organization. According to him, by creating this balance they learnt two things:
- Not every business decision is an economic one
- Success is the best when it is shared
You can Create Shareholder Value and Create Value for Your People
Howard Schultz spoke about how for almost 40 years he has been able to create shareholder value while also creating value for his people. He explained how when you do good things for your employees, your customers will build a large reservoir of trust around the equity of your brand. Customers want to support a company which has values similar to theirs.
The Starbucks CEO spoke about how any business that’s only interested in making money is going to be shallow and it won’t endure. These types of organizations won’t attract or retain great people. He called for businesses to strive to find the perfect balance between profit and humanity. Businesses should understand that the gift of business is to lift up and create opportunities for everyone.
Culture is the Key to a Global Brand
Howard Schultz talked about the secret of Starbucks, he explained that it isn’t their coffee, real estate or design that makes them so special. It’s their culture, values, guiding principles, level of behavior and how people are treated that make the company special. He stated that his company is not perfect and they make mistakes but during the 40 years period they have been able to demonstrate that culture matters and is the secret sauce of the company.
Crack the Code on Creating Ownership for Everyone
The Starbucks CEO explained how one of the most important decision they ever made was cracking the code on creating ownership for everyone in the company. He explained that by giving every employee stocks in the company which gave them a sense of ownership. They were able to create a culture, set values and principles in which had everyone facing the same direction. Giving ownership to every employee created less attrition and increased performance. He linked the company’s success to the fact that everyone in the organization is an owner.