Starbucks: Realignment or a Change in Values?

Starbucks has been in the news a lot lately, and on social media. Most discussions revolve around the failed attempt to start race-related conversations in their stores.

To me, the bigger question is:

Was this campaign aligned with their values, or are they changing their values?

To answer this question, we first need to understand the campaign. Then we need to look at their values.

#RaceTogether Campaign

On March 15, 2015 Starbucks launched a controversial campaign aimed at initiating conversations about racism. To start the process, employees were encouraged to write the phrase “Race Together” on customer coffee cups, hoping it would spark thoughtful conversations about current race-related issues. In addition, both customers and employees were encouraged to continue these conversations online with the hashtag #RaceTogether.

Then, with almost precision timing, CEO Howard Schultz, spoke at the company’s annual shareholders meeting on March 18 about “the humanity of the company.” He went on to state, “And that is the role and responsibility of a for-profit company and what we at Starbucks believe is our overriding responsibility: not just to make a profit, not just to build shareholder value, but to, in fact, have social impact and demonstrate the conscience of our company.”

Quite an impressive initiative.

However, after some significant customer backlash in social media, the company pulled the plug on the campaign only a few days later. And not surprisingly, media chopped this one up as a big failure.

So was this a bad social campaign or was it the right strategic move? The answer lies in understanding if it was fully aligned with company values.

A look at Starbucks’ Values

With all the media hype around this campaign, I decided to look up Starbucks’ values. And surprise, surprise, the values changed!

I had first looked at Starbuck’s values in April 2014 as part of my research on values across all Fortune 500 companies. At that time, Starbucks listed six principles (as many companies call them, instead of values) that revolved around:

• Our Coffee
• Our Partners
• Our Customers
• Our Stores
• Our Neighborhood
• Our Shareholders

It’s important to point out that the company mission has NOT changed. Just the values.

Today, Starbucks has scrapped the six principles and now list four values statements, as follows:

• Creating a culture of warmth and belonging, where everyone is welcome.
• Acting with courage, challenging the status quo and finding new ways to grow our company and each other.
• Being present, connecting with transparency, dignity and respect.
• Delivering our very best in all we do, holding ourselves accountable for results.

In addition, they sum up these values with an important statement that aligns well with the company’s mission:

We are performance driven, through the lens of humanity.

So, were the values changed in preparation for the launch of the campaign, or were the values changed first and then the campaign grew out of the values?

Chicken or Egg?

I don’t know when Starbucks decided to alter their values. But I find it interesting that Starbucks Canada still lists the original six principles on their website. This suggests to me that the values update is quite recent, and Starbucks has yet to revise all of their regional websites.

On the other hand, the spirit of the previous six principles did include much about “humanity”:

• Under “Our Partners” they referenced, “Together, we embrace diversity….”
• Under “Our Customers” they referenced, “It’s really about human connection.”
• Under “Our Stores” they referenced, “Always full of humanity.”
• Under “Our Neighborhood” they referenced, “We can be a force for positive action.”

I suspect the whole process of updating their values started with CEO Howard Schultz.

As highlighted by The Washington Post, Schultz put himself at the center of America’s race debate. Interestingly, he has a reputation of inserting himself into controversial issues and taking a strong stand. In other words, what Schultz is passionate about, Starbucks is passionate about.

Is this a good idea? With record sales and a market cap of $70 billion, the results suggest this makes for good business!

But what happens after Schultz is gone?

Hopefully the current values will resonate with the next CEO, so at least the ink can dry a bit before they’re changed again. Of course, Starbucks already tried a shift in CEOs, from Schultz to Orin Smith (2000 to 2005) and then to Jim Donald (2005 to 2008). But after a major decline in sales, Schultz returned in 2008 to “right the ship.” And that he has now done.

Bottom line: Starbucks’ values are a reflection of Howard Schultz. As long as Schultz is CEO, the company can tweak them as long as they’re supporting his current cause.

The risk is when a new CEO comes in. History suggests if one CEO can change them, so can the next. And that does not make for a strong base to build a lasting company…

 

 

What do you think of Starbucks’ new values?