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When a brand leads with values, customers value you more

March 22, 2013 Comments

Howard Schultz has long been know for his strident leadership positions from calling for a CEO boycott of corporate campaign donations to his ‘Create Jobs for USA’ which invited customers to contribute $5 to help entrepreneurs kick start the national economy. This week he went one step further in his support of same sex marriage.

In doing so Schultz drew and even starker line between those CEO’s and companies that lead with their values and those that avoid social issues for fear of hurting their customer base or bottom line. This begs the question, “Which is better for your business?”

Schultz’s leadership style is not without dangers. In the company’s annual shareholder meeting this week, he was questioned over the disappointing quarter and whether the boycott of Starbucks by some customers opposed to same sex marriage was partly to blame. The questioned elicited a succinct response from Schultz:

“Not every decision is an economic decision.”

He went on to explain, “The lens we use to make decisions is the lens of our people. We want to embrace diversity,” for which he received  applause from shareholders and staffers.

While Schultz explained that this wasn’t an economic decision, his values-driven leadership does in fact add enormous value to the brand because he taps into what research reveals is the most important consumer expectation today – that brands demonstrate social responsibility and improve the lives of their customers.

Edelman GoodPurpose Report 2012

As these insights from Edelman’s GoodPurpose Report 2012 reveal, consumer’s preference for social purpose as a motivation to recommend, promote or switch to a brand has increased consistently since 2008. This is especially true among the next generation of leaders, Millennials, who are now in their early 30′s and assuming management positions. As the recent TBWA study, ‘The Future of Social Activism’ reveals they would be more likely to purchase from a company, think more highly of a company and seek employment from a company that supports a good cause.

TBWA, 'The Future of Social Activism'

So while Schultz is making an important statement about his personal and corporate value, but he is also demonstrating an authentic commitment to Starbuck’s mantra of ‘Shared Planet’ and this is very good for business.

To adopt an equally compelling and authentic leadership position, any CEO (no matter how large or small the company) must do the following 5 key steps:

1. Define what the company stands for, its core values and mission.

2. Communicate those values to employees, shareholders and customers.

3. Make an authenticate contribution in alignment to those core values.

4. Be willing to be held accountable for actions consistent or inconsistent with those values.

5. Inspire their employees, customers and all stakeholders to work together to achieve the brand’s stated purpose.

When a CEO does this he or she can expect to enjoy the following 5 key benefits:

1. Clarity of business strategy in the face of a fast changing marketplace.

2. Greater employee retention, satisfaction and productivity.

3. Increased customer engagement based on shared values and a common purpose that inspires customers to promote the brand.

4. Improved PR, customer goodwill and brand loyalty.

5. Personal fulfillment that comes from the contribution the company makes to society that also drives business.

Do you believe that CEO’s should expand their role to include values based decisions or limit themselves to fiscal responsibilities?

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  • JeffMowatt

    Here’s what a candidate for the US presidential election in 2004 was told by a leader in social purpose business. Being the change rather than talking about it. http://economics4humanity.wordpress.com/2012/11/13/dear-senator-john-edwards/

  • Donna Maria Coles Johnson

    Fiscal responsibilities encompass values based decisions. Values based decisions encompass fiscal responsibilities. There is great overlap and I don’t think separating the two makes much sense. Business leaders must stand for money, values and everything in between. Schultz’s decision to say what he said about marriage equality may stem from his and his company’s values, but there will be people who will buy more Starbucks because he took that stand. There will be people who will buy less too, and I’m sure he’s taking this into account. These days, it’s more important than ever that companies (whether publicly traded or not) know what matters to their target customers, and take stands that make it fun, interesting and self affirming for those customers to buy their products.

  • http://www.facebook.com/profile.php?id=1387617722 Simon Mainwaring

    Thanks so much Jeff. We all have to assume that responsibility now if we are to create the change we need. Appreciate it.

  • http://www.facebook.com/profile.php?id=1387617722 Simon Mainwaring

    I agree, Donna. It will always be a blend. I agree it’s important to know what your customers care about but also your own mind as a CEO and brand. Then, as you say you have to bring it to life in fun and interesting ways so customers like your brand. Values need to be lived but also brought to life in ways that deepen loyalty and trust. Huge opportunities for marketers. Thank you so much. Simon

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We First training and consulting helps the world’s most innovative brands tell the story of the good work they do in ways that build their reputation, employee productivity, sales and social impact.

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