April 25, 2018
Recently, Starbucks announced that it will close 8,000 U.S. stores on the afternoon of May 29 to conduct racial bias training for its nearly 175,000 U.S. store employees. This comes after an incident at one of the company’s Philadelphia stores involving the arrest of two African-American men. The men attempted to use the store’s bathroom without making a purchase, and the situation escalated from there, including across social media.
Some say Starbucks’ response is a bold move, maybe even an over-reaction for a company that is already known for its social conscience. Still others say it’s not enough. Regardless, it’s certainly a costly decision – about $12 million in lost revenue, according to MarketWatch.
From a PR perspective, I believe a culture-driven company such as Starbucks had no choice but to make a big, bold move for the sake of its reputation, mission and values. But I also believe it makes practical sense and provides lessons learned for other high-profile companies:
1. Diversity & inclusion training, if you’re going to do it, should be a companywide initiative.
Starbucks said that prior to this event it had offered unconscious-bias training to corporate employees. While this was a good first step, it was a missed opportunity to not provide training to store employees, who have the most interaction with customers. To be more effective, companies should consider providing training to employees at different levels or various functions of the organization. Going forward, Starbucks plans to include this training as a part of its onboarding process for new employees.
2. Training is only the first step.
While the action Starbucks has taken should address the immediate situation, it cannot be the only solution. Ongoing employee communications will be needed to reinforce messages to workers at all levels. Managers should also be expected to lead by example and hold others accountable. Furthermore, Starbucks needs to thoroughly evaluate its policies and procedures to ensure its rules regarding customer behavior, as well as diversity & inclusion, are clear and understood.
3. Collaboration across teams is key.
It is no surprise that this and other incidents have spread far and wide across social media. As such, social media monitoring is essential for companies to identify incidents as they happen. Understanding consumers’ reactions and sentiment is also important when developing a response. In addition, human resources, social responsibility, corporate communications and social media teams have an opportunity to collaborate to proactively share its company’s story and activities around social responsibility to build up its reputation. There can be little doubt that a customer’s viral video propelled this story; without it, it probably would have been handled, or perhaps ignored, at the local level.
Given all of the daily interactions with customers and the public that occur in retail and other industries, there is no telling when and where the next “isolated incident” could become a major national story. Be prepared and be responsible.