Starbucks CEO Shows Business Leaders How To Manage Any Crisis, Large Or Small

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Here’s What Leadership Accountability Looks Like

A cynical view of Starbucks’ reaction to the recent incident at one of its stores in Philadelphia is that the coffee shop chain was just following the crisis management, damage-control playbook: 1) Recognize the issue, 2) take responsibility, 3) apologize profusely, and 4) show that corrective actions are being taken.

I think the appropriateness and sincerity of CEO Kevin Johnson’s response is demonstrated in part by how quickly media attention has moved on, as have the protests and threats of a boycott. In fact, Johnson’s statements and the company’s response are the key ingredients for building a management culture that learns quickly from mistakes and keeps trying to get better. It’s a leadership model worth copying.

Here’s what happened again. A video of two African American men being arrested in a Starbucks went viral on Twitter and made headlines around the world. The two men had gone to the store to meet someone. They asked to use the restroom while they were waiting but were refused because they did not buy anything. Soon they were asked to leave. When they declined, the manager called the police. When the men still refused to leave, the police handcuffed and arrested them. They spent eight hours in police custody before the trespassing charges were dropped and they were released.

People who saw the video were outraged by the apparent racial profiling that led to the men’s treatment and arrest. The company’s crisis management began with Johnson saying that how the men were treated was “reprehensible.” Here’s what they did next to diffuse the situation and make amends:

 

1. They reacted quickly on a Saturday – High-profile companies like Starbucks have no alternative but to respond swiftly when negative stories explode on social media. But in any business, whether the problem is widely publicised or internal, the faster that company leaders respond the sooner that wild rumours can be squashed and root causes identified.

 

2. Management took full responsibility – In a video statement Johnson said, “There’s been some calls for us to take action on the store manager. I believe that blame is misplaced…. I own it. This is a management issue, and I am accountable.” He blamed the company’s policies and practices – set by management – and took personal responsibility for fixing them so something like this would not happen again.

 

3. They made a public and private apology – As part of owning the problem, Johnson apologized publicly to the two men, and he later apologized to them directly in private. He then solicited their input in examining and rectifying the policies that contributed to their arrest. That’s good publicity, of course, but it’s good management practice to ask the people closest to a problem to help come up with solutions.

 

4. They announced corrective actions – Johnson pledged to review and change the guidelines and policies that contributed to the incident. The company subsequently announced plans for racial-bias training for the 175,000 employees at all of its company-owned shops in the U.S. and corporate offices.

 

Johnson’s response stands out in a world where corporate responsibility is often shirked and leaders blame lower-level employees for performance or ethical lapses (See Wells Fargo). It’s all too rare to see business leaders take accountability like this and recognize that a problem isn’t limited to one individual but is a systemic failure.

 

It would be unfair to compare a single incident like this to some of the highly publicized, product-related issues and recalls that have made news headlines for manufacturers in recent years. But one can’t help but wonder – absent the threat of legal repercussions – how such issues would have been resolved if management had said: These are our products, what’s happening isn’t right, we are accountable, and here’s how we’re going to fix it.

Granted, in these product-related cases, the problems were complex and challenging to solve. But just because a problem is difficult that does not give management a free pass for being accountable.

I’ll conclude by noting that the “unconscious bias” that Johnson cited is obviously not isolated to service businesses. Racial, sexual and other biases manifest in various ways in all types of industries. How leaders respond to such issues when they arise, as they inevitably do, sets the tone and acceptable courses of action for managers and employees at all levels.

 

What’s Your Approach for Driving Leadership Accountability?

Finally, I’m curious to hear how leaders at other organization’s have managed such a crisis. And also, how have you developed a sense of accountability in your organization from the boardroom to front line employees?

 

Bill Remy, President & Chief Executive Officer.

Bill Remy, President & Chief Executive Officer