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What businesses can learn from Starbucks’ response to racism in one of its stores

(Photo credit: Mark Makela/GettyImages)

Earlier this April, two black men were arrested in a Philadelphia Starbucks while waiting for a friend to arrive, and the company has received major backlash for it. Protests, boycotts and claims of anti-blackness from the internet at large have caused damage to the brand’s reputation, which explains the major step they’ve taken to attempt to right their wrong — or at least appear to.

In announcing the closure of all 8,000 U.S. shops on May 29 and closure of all Canadian stores on June 11 to provide employees with anti-bias training, the company has earned goodwill with some, and further skepticism from others. The training promises to address “implicit bias, promote conscious inclusion, prevent discrimination, and ensure everyone inside a Starbucks store feels safe and welcome." Suffice it to say, the whole debacle and response has been a lesson in what customers expect from the businesses they choose to patronize, and what businesses need to do to keep their trust.

Here’s what we’ve learned from the incident and Starbucks’ response — lessons you can apply to your own practices:

Being considered an ethical business is key for brand loyalty

Starbucks could have learned a lesson from its coffee-selling compatriot Tim Hortons, who fell from fourth to 50th in an annual ranking of Canadian brand reputation this year after their response to minimum wage hikes drew ire. As the Timbit-touters could tell you, the power of any business is in the hands of its customer base.

In the age of the conscious consumer, if your core group doesn’t believe in your business you’re unlikely to maintain their loyalty. And loyalty is important to a growing business. Repeat customers are more likely to provide you with free marketing through word of mouth, and can create a safety net for you to test out new products. That’s why maintaining or salvaging that loyalty, if it waivers, is worth a big investment like the one Starbucks has committed to.

Grand gestures are not enough in and of themselves

Many have praised the coffee conglomerate for putting their money where their mouth is, in one of the larger responses to a scandal seen in recent times. Still others are skeptical that the anti-bias training is more a facade of inclusivity, or at the least merely a first step in encouraging understanding and change among their 175,000 employees.

According to a Guardian article featuring Holly Hutchins, associate professor of human resource development at the University of Houston’s College of Technology, “diversity training actually has the least impact” when it comes to creating that cultural shift in your business, and serves more as window dressing than meaningful change.

The lesson here? To win back some of the customers, you have to put more than money on the line. With more consumers wanting to see equitable business practices and attitudes from the top-down, one-step plans aren’t enough. Many will be looking to Starbucks’ training day as step one in what’s hopefully a many-point plan.

Letting customers know where you stand is important

Despite the skepticism around anti-bias training as a functional tool, the company has made a commitment, and it at least appears sincere — when was the last time you heard of a corporation this big close for a day to respond to an error?

Most importantly, letting the world know what they will and won’t tolerate sends a message that they’re taking the matter seriously. The CEO of Starbucks called the arrest “reprehensible,” but they knew that words wouldn’t be enough and quickly took action — that says a lot.

What small businesses and entrepreneurs can learn

Not every new business owner can afford to take a whole day of production off the table, and are unlikely to be embroiled in a scandal this big in the first place. Still, those conscious consumers are more active than ever, rating companies online, and sharing their opinions freely on social media, so companies should have a plan in place for managing any public-facing gaffes.

The key takeaway here: the best defense is a good offense. Build your company from the ground up with policies in place to mitigate issues and inequitable attitudes before they happen. This means having a stance on equity practices for your company and creating a clear policy in the first place that backs up your philosophy — from built-in equity training for all new employees, to understanding the importance of diversity in the hiring phase. This isn’t just about managing your reputation, it’s about creating a workplace culture that’s safe, inclusive, and a positive space for all employees and customers.

Even though you may not have much in common with a company as big as Starbucks, you can still learn from their mistakes, and build the company you want to be from day one.

 

Devon Murphy is a writer and editor living in Banff National Park.