How Starbucks Drives Profit with "Purpose-Driven" Recruiting
Brought to you by WBR Insights
In the (not too distant) past, the notion of being "purpose-driven" was something largely reserved for the not-for-profit sector. Charitable organizations, of course, have always had "purpose" (to change the world in some way) — but businesses, surely, just have a "mission," and that mission is usually to be profitable.
Not anymore.
Today, more and more businesses are finding that profitability is becoming increasingly dependent on their ability to prove that they are as purpose-driven as they are mission-driven. Why? Because what motivates employees in 2020 — especially among the increasingly crucial millennial and Gen Z cohorts — is no longer the promise of job security, high pay, and career advancements, but a feeling that the businesses they are working for is doing some good in the world.
"Much like what a foundation is to a house, a conductor is to an orchestra, and a canvas is to an artist's masterpiece — a clear purpose is everything to an organization," write Diana O-Brien, Global Chief Marketing Officer for Deloitte, and colleagues in Deloitte Insights. "It is an organization's soul and identity, providing both a platform to build upon and a mirror to reflect its existence in the world. It articulates why an organization exists, what problems it is here to solve, and who it wants to be to each human it touches through its work. While it's not the first time in history businesses are pondering why they exist and who they are to their customers, the current trend based on our research shows that businesses are using purpose to create deeper connections with consumers, do more for the communities with which they work, attract and retain talent, and in the process, are achieving greater results and impact."
Deloitte's research found that purpose-driven companies witness higher market share gains and grow three times faster on average than their competitors — all while achieving higher customer and workforce satisfaction. That's because today's consumers often identify with how a brand treats its employees, how it treats the environment, and how it supports the communities in which it operates.
(Image source: deloitte.com)
Mission Statements Vs. Purpose Statements
To get to grips with exactly what their purpose is, many companies have started publishing "purpose statements" that sit alongside the more traditional "mission statement".
It's worth clarifying the difference at this point. Mission statements describe what the company wants to do right here and now — i.e. what customers it wants to reach, what the critical processes of the business are, and what the desired level of performance is.
By contrast, a purpose statement describes what the company wants to be in the future — and indeed how the company plans to effect (positive) change within the industry and/or society that it operates. "Your mission statement is more about what you want to accomplish, and the goals you want to get to, whereas your purpose statement is your reason for existence and more about the journey," says Shannon Schuyler, Chief Purpose and Inclusion Officer at PricewaterhouseCoopers.
Here's how U.S. coffeehouse chain Starbucks outlines its mission and purpose statements:
Mission statement: "To inspire and nurture the human spirit — one person, one cup and one neighborhood at a time."
Purpose statement: "To establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow."
Starbucks Recruits with Purpose
The power of purpose is not to be underestimated. It gives companies a competitive edge, not least in the realms of recruitment and employee retention. Employees want to know they are working for a company that is operating for the greater good — and that, in turn, is good for business. Deloitte found that purpose-oriented companies have higher productivity and growth rates, along with a more satisfied workforce who stay longer with them. The research shows that such companies report 30% higher levels of innovation and 40% higher levels of workforce retention than their competitors. "People are looking to work with companies that share their values, that actively express what they're doing to be a good partner with the world," explains Carol Cone, Founder and CEO of Carol Cone ON PURPOSE, often referred to as the "Purpose Queen".
As Deloitte's researchers point out, organizations that don't clearly articulate their purpose to their customers, partners, and — crucially — their workforce may run the risk of falling behind or failing entirely as we head into the new decade.
Indeed, recruiting for purpose is something that Starbucks believes in most firmly — for the good of the world, as well as the company. It is of course very easy for a company to come out and say that it "wants to make the world a better place." But Starbucks wants its actions to speak louder than its words — which is why the retailer has been paying the college tuition fees for thousands of its employees for the past six years.
In 2014, Starbucks launched its College Achievement Plan — a scheme that provides 100% tuition fee coverage for online university degree programs with Arizona State University (ASU) to any full- or part-time US Starbucks employee who is not yet in possession of a bachelor's degree. This is a purpose-driven approach to make the world a better place in no uncertain terms. Indeed, the motivation behind the College Achievement Plan, according to Lisa Young, Executive Director of Starbucks Initiatives for EdPlus at Arizona State University, is to address one of the world's most overbearing concerns about the inequality of education opportunities in the country. Young explains that Starbucks wants to erode "the notion of exclusivity [that] a college degree is meant for a certain group of individuals who can afford it."
Starbucks partners (employees) can choose from 80 undergraduate degree programs through ASU Online, with no commitment to stay with the company post-graduation. According to figures at the end of 2019, more than 3,000 Starbucks employees had earned bachelor's degrees through its College Achievement Plan, with 13,000 more enrolled in ASU online classes.
Positive Branding
What is interesting is the fact that following the launch of the scheme, applications went up for positions at Starbucks right across the board. There was also a boost in barista applications and corporate positions.
Following the success of the scheme in the US, in 2019, Starbucks extended this educational opportunity to UK employees, having worked closely with its workforce across the pond to identify what benefits matter most to them. Many expressed how difficult the financial strains can be to obtain a university degree — currently, tuition fees for those studying in England can be as much as PS9,250 ($11,950) a year. As the BBC reports, the incentive is available for employees at all grades, as long as they have worked for Starbucks for three months and do not already have an undergraduate degree. UK students have a choice of about 40 degree subjects offered by ASU, including economics, information technology, political science, and accounting.
Final Thoughts
Starbucks aims to help at least 25,000 partners graduate through the College Achievement Plan by 2025. It's a sizeable figure, but it provides the necessary clear and tangible proof that Starbucks really is purpose-driven to make the world a better place. And this positive branding, Starbucks believes, offsets the costs of the program/ It will attract and retain the best talent to the workforce, and consumers are always willing to spend more with companies they believe have good values.
The last word goes to Martin Brok, President, Starbucks EMEA: "Starbucks has always been a company that puts our people first. And if we can remove the financial burden of the cost of a university degree while helping our partners gain skills that will set them up for future success — we can't think of a better investment."