Why Business Leaders Should Stick to Their Core Values — Especially During Rough Patches
The following is adapted from From Simi Valley to Silicon Valley.
When a business hits a rough patch, the temptation — or in the case of public companies, pressure from shareholders — to cut “discretionary spending” often runs high. But when those cuts include expenses like employee benefits, you risk carving out the very heart of your company.
If you sacrifice the principles that make your company a fulfilling place to work, your most valued employees will follow shortly after. That’s why business leaders should instead stick to their core values, especially when stress runs high.
In this article, we’ll explore an example of a business leader whose decision to maintain company values helped save the business rather than hurt it, and look at reasons to prioritize core values as part of your business strategy.
Sticking to the Starbucks Values
When I started at Starbucks as their CIO, the company was in the middle of a rough patch. Shares in the company had fallen and it was not the popular, tech savvy business it is today.
However, despite the financial troubles, I quickly realized that Starbucks had something special going for it. Our CEO, Howard Schultz, clung strongly to the company’s core values of providing healthcare, education, and a supportive work environment for our employees.
Howard’s belief in our people, in treating them right, and in creating community was more than just words; it was real. This was at the very heart of my core lessons from Starbucks. I saw that, despite the fact that the company was now in the position of fighting for its survival, Howard never lost sight of the fact that we existed for more than the purpose of earning a profit.
When you are purpose-driven, trying to do good in the communities where you operate and do right by your people, there is a net positive that can’t be acquired in any other way than through authenticity.
Rejecting the Pressure of Short-Term Gains
Despite the positives of strong core values, when a company’s stock is collapsing, activist shareholders often try to focus on short-term results and oust the management team in the process. As a leader, the media can be against you, and it’s easy to lose sight of your purpose and core tenets.
You can cut employee benefits. You can eradicate employee discounts and do away with their free coffee discounts, healthcare, or education reimbursements. After all, everyone would logically understand that you simply can’t afford to do that anymore.
To his great credit, Howard never did any of this. He believed that the future of business and success would be found in companies that combined what he called social conscience with profitability. In other words, don’t just go after the profits and financial rewards. Do good in the world; and, most of all, do good when nobody is looking.
Yes, he had to make some difficult decisions when it came to closing stores, and those decisions most certainly impacted employees. But never, ever did he so much as consider — or even engage in conversation about — cutting out what he believed to be core tenets of the company. At one point, Starbucks was spending more on healthcare than on coffee.
Think about that for a moment.
Core Values Will See You Through Rough Patches
Whether Starbucks was in the midst of difficult times as a company or great ones, the core tenets always drove our leadership team. As a young leader, this made an indelible impression on me. It gave me the courage and confidence to lead by those same industry-agnostic values: do good for your people and do good for the world.
The payoff of Howard’s commitment was employees who loved working for the company, who stayed loyal throughout the downturn, and who gave their best every day on the job. And today, that level of employee commitment is a big part of the reason Starbucks has spent seventeen years on the Fortune 500 list.
The next time you feel the pressure to cut back on expenses, remember to think long-term and value the people who are the face of your company. While it may not result in as many quick wins, treating your employees right and sticking to your core values will ensure your company has the employee dedication it needs to survive in any economy.
For more advice on leadership, you can find From Simi Valley to Silicon Valley on Amazon.
Stephen Gillett is the co-founder and CEO at Chronicle — an Alphabet company born out of X, The Moonshot Factory — and is an executive advisor to the CEO at Google. As one of the youngest CIOs of a Fortune 500 company in history, he was responsible for leading the technological transformation of Starbucks under Howard Schultz. Stephen’s previous positions included CIO at Corbis, working directly with Bill Gates; President at Best Buy; and COO at Symantec. As an avid lifelong gamer, Wired also recognized him as an innovative Guild Master in World of Warcraft. Stephen lives in Silicon Valley with his high school sweetheart and their eight children. Stephen can be reached at SVtoSV@gillett.org.