12 Months Later: Starbucks Learns from United Airlines’ Woes

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By Alex Altman
Caught in the eye of a PR firestorm, former Starbucks CEO (and still face-of-company) Howard Schultz took a page from the Oscar Munoz book on corporate leadership.

And then he did the exact opposite.

When cellphone footage last April showed a passenger being violently dragged off a United Airlines flight, Munoz delayed, deflected and even blamed the “disruptive and belligerent” victim for his failure to heed the orders of a flight crew.
His regrettable handling of the situation inflamed an already outraged public, provided fresh fodder for the national media and caused irreparable harm to United Airlines’ reputation. (When you think of United Airlines, what’s the first image that pops in your head?)

Twelve months later, Starbucks was confronted with a similar caught-on-tape situation. Cellphone footage showed two African American men being arrested and handcuffed for trespassing at a Philadelphia Starbucks after they declined to buy anything while waiting for a friend. The video went viral and, suddenly, Starbucks was under siege.

The national media got hold of the story. Protests were soon underway. And boycotts were being planned.
Starbucks needed to act.

Schultz, who stepped down as CEO last year but remains chairman of Starbucks’ board of directors, flew to Philadelphia to meet with the victims in person. And then he did something many executes would have refrained from: he admitted that racism — not “rule-breaking” — was the reason the store manager called the police.

“There’s no doubt in my mind that the reason that they (police) were called was because they were African American,” Schultz told CBS.

Starbucks leadership then took the apology a step further. At the end of May, Starbucks stores across the country will close en masse so 175,000 employees can undergo racial bias training. “It’s just the beginning of what we will do to transform the way we do business and educate our people,” Schultz said.

Starbucks is not out of the woods — but thanks to Schultz, a PR disaster that could have dragged on for weeks started petering out in days.

The lesson here is applicable to all business leaders, regardless of the size of their company.

As companies grow, so do the chances of a PR mishap. It’s almost inevitable that at some point, an employee is going to say or do something that you, as a leader, need to address. Showing accountability and contrition may make the difference between a little bad ink and a full-scale PR disaster.

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