Starbucks Role Models The Two Essential Steps For Crisis Management

https://www.forbes.com/sites/jerryweissman/2018/04/18/starbucks-role-models-the-two-essential-steps-for-crisis-management/#439e5fde1793

Until yesterday, Johnson & Johnson, the giant pharmaceutical company had been lauded in corporations, PR agencies, and business schools around the globe as the ideal role model for how to manage a crisis.

More than three decades ago, Tylenol, one of the company’s flagship products, was the victim of a deadly vandal who slipped cyanide capsules into bottles of its product on the shelves of drugstores and killed seven people. J&J responded swiftly by recalling 31 million Tylenol bottles, offering free replacements, and reissuing the product in tamper-proof packaging.
In one short week, the J&J example was matched by Starbucks.
Last Thursday, the company found itself at the center of a public relations storm when two black men were arrested in a Starbucks store in a Philadelphia for no apparent cause. On Monday, Starbucks CEO Kevin Johnson (an ironic coincidence) went on ABC’s Good Morning America and apologized:  “The circumstances surrounding the incident and the outcome in our store on Thursday were reprehensible, they were wrong…and for that, I personally apologize to the two gentlemen who visited our store.”

And then yesterday, Starbucks announced that it will close 8,000 company-owned stores for an afternoon next month to provide its 175,000 employees with training to the “address implicit bias, promote conscious inclusion, prevent discrimination and ensure everyone inside a Starbucks store feels safe and welcome.”
J&J and Starbucks both demonstrated the two essential steps to handle any crisis:

• Be candid, admit the error
• State the actions to correct the error

Unfortunately, we’re seeing two opposite steps from an ever-increasing number of crisis-challenged elected officials:

• Denial
• Blame

They need to take Tylenol. The public needs a latte.

Jerry Weissman is a presentation coach & bestselling author. Follow him on LinkedIn and Twitter.


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https://finance.yahoo.com/news/crisis-management-expert-lays-starbucks-needs-203740316.html 

Starbucks (SBUX) is closing all of its U.S. stores on the afternoon of May 29 to educate its 175,000 employees about racial bias. This change affects more than 8,000 locations (or about 29% of its global store count).

The announcement came a few days after a video of two African-American men getting arrested at a Starbucks went viral (it has been viewed nearly 11 million times). One or both of the men asked to use the restroom, but neither had ordered anything. The manager at the downtown Philadelphia location said company policy prohibited non-customers to use the restroom and asked the men to leave and subsequently called 911. The employee who called the police has since been fired. 

CEO Kevin Johnson published a letter and recorded a follow-up video apologizing for the “reprehensible” outcome. Eric Dezenhall, a leading crisis management expert and CEO of Dezenhall Resources who has been helping companies with damage control for 35 years, said Starbucks “has done the best they could do under terrible circumstances.”

‘The game is damage control — not that damage never happened’

“Going into this, no matter what Starbucks did, it would be deemed to have been a misfire, not only because of the emotions involved, but also because of the utter impossibility of controlling social media and because you have legitimately aggrieved parties,” Dezenhall said.

He said Starbucks took effective hard actions such as firing the employee and soft actions including Johnson’s apology letter and video. In his video, Johnson appears both somber and direct and takes full responsibility for the incident. 

“This is not who we are, and it’s not who we’re going to be. We’re going to learn from this and we will be better for it. … Now there’s been some calls to take action on the store manager. I believe that blame is misplaced,” Johnson said in the video. “In fact, I own it. This is a management issue, and I am accountable to ensure we address the policy and practice and the training that led to this outcome.” 

“I think that they have done everything right that you can do right in these situations, with the understanding that the game is damage control — not that damage never happened. There’s a tendency to mistake damage control efforts with damage erasing. It’s not the same thing,” said Dezenhall.

Crisis management expert lays out what Starbucks needs to do

Regarding the store closings, it won’t solve the underlying issue of racism, but it was a bold, smart move for Starbucks to make, according to Dezenhall. Jeff Sonnenfeld, a dean at Yale’s School of Management, estimates that Starbucks will lose $12 million for closing on May 29. This will be the second time that Starbucks has closed up shop for an afternoon. In 2008, baristas were re-trained on how to make espresso properly, that closure cost the company $6 million.

“You can’t excuse them now of doing nothing. No matter what you do — you’ll be accused, so you may as well do something big,” said Dezenhall.

Andrew D. Gilman, the president of CommCore Consulting Group, shared this sentiment. “This move goes far beyond the playbook of what a normal crisis response would be,” he told The New York Times.

‘A problem that is fundamentally irresolvable’

“You have to separate the societal problem from the crisis management. One of the challenges when you’re dealing with a huge issue like this is people want the company to solve an issue that is hundreds, if not thousands, years old. Think of it like a trauma surgeon — If someone is wheeled in with chest pains, you can’t begin giving them a lecture on history of health. You have to solve the problem at hand,” said Dezenhall, the author of books including “Glass Jaw: A Manifesto for Defending Fragile Reputations in an Age of Instant Scandal” and “Damage Control: The Essential Lessons of Crisis Management.” 

Companies like Starbucks have to be cognizant of the “combustibility” factor when it comes to issues like race, a particularly personal and heated topic, he said.