By Alan Murray and David Meyer
April 17, 2018

Good morning.

Starbucks CEO Kevin Johnson has had a busy couple of days, apologizing profusely and repeatedly for the incident in a Philadelphia store where two black men were removed by police after a call from the store manager. The video of the men, who hadn’t purchased anything and were sitting quietly, went viral and prompted instant outrage.

Johnson’s response is likely to become a case study in how to handle such situations. There is no evidence that the company’s policies were at fault, and plenty of precedent for non-customers being asked to leave stores. Nevertheless, Johnson was the picture of contrition—apologizing personally to the two men arrested, calling their treatment “reprehensible,” and apologizing to his customers and partners. He took full responsibility— “I am accountable.” And he promised to fix the problem, whether it required policy changes, additional store manager training, or unconscious bias training. He rejected calls to dismiss the manager who made the call to police, saying, “I believe that blame is misplaced. In fact, I think the focus of fixing this—I own it. This is a management issue, and I am accountable.” (Starbucks said Monday that the store manager “is no longer at that store.”)

This is just the latest example of how dramatically corporate leadership has changed in the social media era. The incident, while clearly objectionable, would likely have passed with little notice in earlier days. But today, every Starbucks customer has become a potential citizen-journalist, and every social media user feels empowered to react as if he or she had witnessed the event first-hand. It’s up to the CEO to provide the antidote.

Does it help that Starbucks has established a record of attention to social issues—even if it has sometimes done so ham-handedly? I think so. In an age of instant moral outrage, CEOs are well-served by having built a reservoir of good will.

Coincidentally, I’m off this morning to the speak to the Geno Auriemma Leadership Institute, named after and led by the University of Connecticut’s iconic basketball coach. My topic: The Changing Nature of Business Leadership. Thanks to Johnson for an opening anecdote.

More news below.

Alan Murray


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