Starbucks race row: forgetting your ‘why’ is perilous

This blog was first published on the Pitchfork Partners page.

The storm buffeting Starbucks teaches us that being untrue to your ‘why’ can tarnish not just your brand but also damage your business significantly.

On May 29, 8,000 company-owned stores will shut in order to impart racial sensitivity training to more than 175,000 employees. This follows a store manager in Philadelphia calling the cops on two African-American men who lingered a couple of minutes before ordering. The controversy left the iconic coffee chain shamefaced. Its founder Howard Schultz went on record to say: “I’m embarrassed, ashamed. I think what occurred was reprehensible at every single level… There’s no doubt in my mind that the police were called because they were African-American. That’s not who Starbucks is.”

So how does this link back to Starbucks’ ‘why’?

Many believe that Starbucks is in the coffee business, but it isn’t really. Why do we choose to hang out at a Starbucks when the coffee is probably better and cheaper at many other restaurants (I even prefer the brew dished out by the local roadside vendor)? It’s because we aren’t really there for the coffee. Starbucks was conceptualised as the “third space” – after home and office – where you could chat, hold meetings in a more relaxed environment, hit the refresh button in your mind. You get that for free with the coffee you purchase.

Therefore, for us to buy in to the Starbucks philosophy, the staff need to make us feel comfortable even if we order nothing for a while or read a book or work on a business document before we get in the mood for a cup of joe. That is what Starbucks is about. It’s what I imagine the C-suite would say when asked to explain the business model.

I’ve spent a load of time hanging out at and working from Starbucks cafes in several cities, and I’ve always felt welcome. No one ever hassled me to buy something or ask why I was spending hours there doing nothing. In fact, a bunch of people virtually lives in the store close to my home in Mumbai’s Bandra neighbourhood. “Chill,” the place seems to say.

So, when staff act the way they did in Philadelphia, they aren’t just being bad people; they are striking at the very heart of Starbucks’ reason for existing. The resultant news storm isn’t just bad PR, it’s a threat to the business itself.

That’s why the sensitising sessions aren’t just good PR, they are a strategic initiative to preserve the brand and its way of doing business.

The Starbucks top brass understood this instantly. Schultz and CEO Kevin Johnson met with both the men booted out of the Philadelphia store and apologised. They made public their regret and promised to ensure such incidents would never recur. This was the right thing to do.

Schultz and Johnson also got it right by placing the customer and the company philosophy ahead of money. The shutdown, Schultz said, would cost “millions of dollars, but I’ve always viewed this and things like this as not an expense but an investment in our people and our company.” He added: “We’re better than this.”

The personal involvement – and approach – of Johnson and Schultz is why I believe the company is serious about change, and that it will bounce back. And that is why I will go back to the store for my caffeine-and-chill fix. Make mine a Venti. 

#starbucks #brand #racism #brandpurpose #purpose #corporatepurpose #service #customer #cusotmers #PR #public relations