How Starbucks Calmed a Brewing Crisis

Mike Shannon    Starbucks V3

For years, experts have cited Johnson & Johnson’s handling of its 1982 Tylenol recall as the gold standard in crisis management. The global healthcare giant took quick, transparent, and decisive action in the wake of seven deaths related to its bestselling product. 

J&J may soon have some new company in the crisis response hall of fame.

Starbucks recently put on a crisis management clinic after a social media post showed two African-American men being arrested for no apparent reason at one of their Philadelphia stores on Thursday April 12. The coffee giant moved with incredible speed and took decisive action. 

Let’s review:

  • Friday: The day after the incident, Starbucks responds directly on Twitter to the original video post, saying it was investigating.
  • Saturday: The company releases an apology from their CEO Kevin Johnson, who calls the incident “reprehensible,” declares Starbucks “firmly against discrimination or racial profiling,” admits the companies “practices and training led to a bad outcome,” and outlines a broad plan of action. Mr. Johnson follows up with a video apology later in the day declaring “I will fix this.”
  • Monday: Johnson meets with the two men had been arrested to personally apologize and holds discussions with the Philadelphia mayor and city leaders.
  • Tuesday: The Starbucks CEO appears on cable news to reiterate the company’s message in an authentic and emotional interview. Later that day, the company announces it will close all its stores and corporate offices in late May for racial-bias education for its 175,000 employees and that it had engaged national and local experts to help develop the training. The announcement is accompanied with a direct-to-camera video from Mr. Johnson.
  • Wednesday: Starbucks founder and Executive Chairman Howard Schultz appears on CBS This Morning. Schultz says the millions of dollars that the store closures would cost should be viewed not as an expense but as “investment in our people and our company.” Less than a week has gone by since the original incident.

Starbucks avoided crisis traps that are a feature of many corporate responses. The company didn’t make excuses. It didn’t issue a bland statement that said nothing. And it didn’t wait to take action only after bad coverage escalated and persisted.  Everyone says they are going to get out in front of a story – Starbucks actually did. It was successful because leadership got directly involved, responded quickly, and reached out to outside experts to help formulate a response. Most important, Starbucks didn’t just say something meaningful, it did something meaningful.

The Starbucks racial-bias training will be held on May 29. Millions will be looking elsewhere for their coffee that afternoon, but as Howard Schultz once said, “Starbucks represents something beyond a cup of coffee.”