Star­bucks un­der fire af­ter racial pro­fil­ing

Philadel­phia in­ci­dent tar­nishes firm’s im­age

Bangkok Post - - BUSINESS - ALEXAN­DRA OL­SON

NEW YORK: Three years ago, Star­bucks Corp was widely ridiculed for try­ing to start a na­tional con­ver­sa­tion on race re­la­tions by ask­ing its em­ploy­ees to write the words “Race To­gether’’ on cof­fee cups. The ini­tia­tive, though it back­fired, was in line with the com­pany’s long­stand­ing ef­fort to project a pro­gres­sive and in­clu­sive im­age.

The com­pany is now through the look­ing glass, try­ing to tamp down a racially charged up­roar over the ar­rest of two black men at one of its stores in Philadel­phia. How could Star­bucks, which once urged its em­ploy­ees to start con­ver­sa­tions about race with cus­tomers, now be un­der fire for its treat­ment of black peo­ple?

The episode high­lights the risks large cor­po­ra­tions run when they tie their brands so closely to so­cial mes­sag­ing.

In 2015, then-CEO Howard Schultz shrugged of the “Race To­gether’’ fi­asco as well-in­ten­tion mis­take and pressed on with his pub­lic ef­forts to en­gage in the de­bate over race in Amer­ica.

His suc­ces­sor, Kevin John­son, is now scram­bling to keep the Philadel­phia in­ci­dent from shat­ter­ing the mes­sage Schultz was go­ing for: Star­bucks is a cor­po­ra­tion that stands f or some­thing be­yond profit.

“The more your brand is try­ing to con­nect emo­tion­ally to peo­ple, the more hurt peo­ple feel when these kinds of things hap­pen,’’ said Jac­inta Gauda, the head of the Gauda Group, a New York­based strate­gic com­mu­ni­ca­tions firm af­fil­i­ated with the Grayling net­work. “They are break­ing a prom­ise. That’s what makes it hurt deeper.’’

“Be­yond racial re­la­tions, Star­bucks has staked much of its brand on its dual prom­ise of pro­vid­ing good cus­tomer ser­vice and treat­ing its em­ploy­ees well,’’ said John Gor­don, a restau­rant in­dus­try an­a­lyst with Pa­cific Man­age­ment Con­sult­ing Group.

“The Seat­tle com­pany has a rep­u­ta­tion for well-man­aged stores, a point of dif­fer­ence that al­lows them to sell pri­mar­ily drinks and cof­fees that have a higher cost,’’ he said.

“But in a multi­na­tional com­pany with more than 28,000 stores world­wide, there has to be a sit­u­a­tion ev­ery day where some hu­man be­ing han­dles things wrong. You can’t have that many em­ploy­ees and not have some­thing stupid hap­pen,’’ Gor­don said. “Even with a huge op­er­a­tions man­ual that lays out what to say and what to do, you can’t cover ev­ery­thing.’’

Still, Star­bucks has set its own high bar.

Last month, the com­pany claimed it had achieved 100% pay eq­uity across gen­der and race for all its US em­ploy­ees and com­mit­ted to do­ing the same for its over­seas op­er­a­tions, an ini­tia­tive pub­licly backed by equal­ity ac­tivist Bil­lie Jean King.

Star­bucks also touts the diver­sity of its work­force, say­ing mi­nori­ties com­prise more than 40% of its em­ploy­ees in the US. In 2016, Star­bucks promised to in­vest in 15 “un­der­served’’ com­mu­ni­ties across the coun­try, try­ing to counter an im­age of a com­pany cater­ing to a mostly white clien­tele.

One of those stores opened i n Fer­gu­son, Mis­souri, the scene of the 2014 protests that erupted f ol­low­ing the po­lice shoot­ing of Michael Brown, one of sev­eral such killings that moved Schultz to launch the Race To­gether cam­paign.

Those ef­forts are in stark con­trast to the video that went vi­ral over the week­end show­ing the two black men be­ing ar­rested by po­lice who were called by an em­ployee.

Of­fi­cials have said po­lice of­fi­cers were told the men had asked to use the store’s re­stroom but were de­nied be­cause they hadn’t bought any­thing and they re­fused to leave.

On Mon­day, about two dozen pro­test­ers took over the Philadel­phia shop, chant­ing slo­gans like, “A whole lot of racism, a whole lot of crap, Star­bucks cof­fee is anti-black.’’ The hash­tag #Boy­cottS­tar­bucks trended on Twit­ter.

John­son, who called has called the ar­rests “rep­re­hen­si­ble,’’ ar­rived in Philadel­phia at the week­end to per­son­ally con­front the cri­sis.

He said he hoped to meet with the two men in the next cou­ple of days and apol­o­gise to them faceto-face. And he promised to re­vamp store man­age­ment train­ing to in­clude “un­con­scious-bias’’ train­ing.

“I watched t he video, which was hard to watch. That is not what Star­bucks is about. That is not rep­re­sen­ta­tive of our mis­sion, our val­ues and our guid­ing prin­ci­ples,’’ John­son said.

Gauda, who has de­vel­oped work­place in­clu­sion and diver­sity strate­gies for cor­po­rate clients, cau­tioned that any un­con­scious-bias train­ing should not be treated as “spe­cial sub­ject’’ but in­cor­po­rated as a core part of its em­ployee train­ing.

She warned Star­bucks against treat­ing Philadel­phia as a one-off af­fair, urg­ing the com­pany to in­ves­ti­gate whether there were any warn­ing signs.

“I would sus­pect that this par­tic­u­lar is­sue is some­thing that has oc­curred be­fore,’’ Gauda said. “The com­pany is in cri­sis mode now, but they should not look at this as an iso­lated is­sue.’’

Gauda and other cor­po­rate com­mu­ni­ca­tions ex­perts said they were im­pressed that John­son im­me­di­ately took a hand­son ap­proach to ad­dress­ing the cri­sis, say­ing his ef­forts would pay off in an age where cor­po­ra­tions are un­der the glare of so­cial me­dia.

“I’m ac­tu­ally sur­prised he is han­dling it the way a CEO should be han­dling it. He went it head first and he took the blame for it,’’ said M.J. McCal­lum, vice pres­i­dent and cre­ative di­rec­tor of Muse Com­mu­ni­ca­tions, an ad­ver­tis­ing and com­mu­ni­ca­tions agency with an African-Amer­i­can fo­cus. “I def­i­nitely ap­plaud that. Most peo­ple won’t jump on the bomb.’’

“Star­bucks has a great rep­u­ta­tion. They stand for a bet­ter cul­ture. They have stores in in­ner cities,’’ McCal­lum said. “I think he re­alises what this one in­ci­dent can do for his brand.’’

They are break­ing a prom­ise. That’s what makes it hurt deeper. JAC­INTA GAUDA Head of the Gauda Group

John­son: Star­bucks to re­vamp train­ing

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