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Why Starbucks has no business talking about race

Mar 23, 2015

Starbucks is getting plenty of criticisms over its new efforts to get people talking about race relations.

The company recently encouraged its baristas to write the words “race together” on cups before handing them to customers. The goal apparently was to get people talking about an important social issue in a productive way, but the effort has sparked a backlash as the company announced on Sunday that its baristas will no longer write messages on customers' cups.

While the company's campaign will continue, some people are using the opportunity to highlight the fact that the senior management team at Starbucks is not racially diverse. Instead of getting the Starbucks community productively talking about race in America, the move has exposed the coffee chain to an outpour of criticisms that eventually led Starbucks’ senior vice president of communications to take down his Twitter account.

The issue raises an important question for business leaders: when should a company take on controversial social issues?

There is an important distinction between a controversial issue and a broadly popular cause.

Cause marketing is not likely to get a brand into trouble. People don’t get mad at Pedigree when the brand supports dog adoption. It is hard to be against dog adoption. There is little backlash when Yoplait raises money for breast cancer research or when Budweiser salutes America’s veterans.

Controversial issues are very different. These are topics that are polarizing. They are complicated matters about which a people strongly disagree.

There is no shortage of these topics. Tax policy, same-sex marriage and global warming are all polarizing issues. The death penalty and abortion are others.

Should a brand publicly wade into these topics?

The short answer is no. There is no reason for most brands to get involved in these debates.

The problem is that any effort to engage in the topic will create bad feelings. If a company announces its support for capital punishment, for example, some customers will be upset. They might leave. Employees, too, might disagree and depart. This all creates a problem for the company, as sales decline and good employees flee.

There are only two reasons when a public company should take on one of these issues.

First, a company should get involved when the issue directly impacts the firm’s business interests. In this case, the firm should take a stand, even though doing so may prompt a backlash. Nuclear power, for example, is a controversial issue but a company such as Southern Company (so) needs to be part of the debate because it is investing billions in building a new nuclear plant. People debate the merits of ObamaCare, but Andy Puzder, CEO of CKE Restaurants, parent of Carl’s Jr. and Hardee’s, took a strong stand earlier this year opposing it because the legislation directly impacted his business.

Second, a company should get involved when the issue impacts the firm’s core values. General Mills, for example, made a bold move in 2014 by airing an ad during the Super Bowl featuring a bi-racial couple. The decision was symbolic and intentional; General Mills (gis) was communicating to employees and customers that it accepted and supported all sorts of families. The same year, Coke also aired a spot during the Super Bowl that featured same-sex parents — again taking a visible stand.

Taking up issues that do not have a direct business impact or support company values is asking for trouble. In some ways, it is irresponsible for a public company CEO to do so. A CEO is hired by shareholders, at least in theory. The last thing a CEO should do publicly is to take a stand on a social issue that he or she personally believes in but has little impact on a business.

Private companies are different. If the owners of a privately-owned brand have a strong point of view, they can certainly voice their opinions. They may well hurt their business in the process, but that is a tradeoff they might be willing to make. Hobby Lobby, for example, is a privately-owned company that has taken a strong stand on social issues. Dan Cathy, CEO of Chick-fil-A, voiced his opinion on issues including same-sex marriage. Privately-held Koch Industries is a well-known supporter of conservative causes.

Starbucks (sbux) is a public company and should be cautious about engaging in debates about complex social issues. CEO Howard Schultz was well aware that the campaign would be controversial. He apparently noted in a video to employees, "Some people have said, 'Howard, this is not a subject we should touch. This is not for you. This is not for a company. This is for someone else.' I reject that. I reject that completely."

In hindsight, it is hard to see how Starbucks benefits from a discussion on race relations. It is a difficult topic. People have different views about how individuals are treated. The Starbucks brand isn’t based on a particular view of race. People don’t visit or avoid a Starbucks because of its social views.

Brands like Starbucks should think carefully about publicly jumping into debates about issues that are polarizing and difficult unless there is a compelling need to do so.

Tim Calkins is a clinical professor of marketing at the Kellogg School of Management at Northwestern University.

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