The discrimination debate: Why it hurt Starbucks, but worked for Apple

April 3, 2015, 3:46 PM UTC
Demonstrators gather to protest a controversial religious freedom bill in Indianapolis
Demonstrators gather at Monument Circle to protest a controversial religious freedom bill recently signed by Governor Mike Pence, during a rally in Indianapolis March 28, 2015. More than 2,000 people gathered at the Indiana State Capital Saturday to protest Indiana?s newly signed Religious Freedom Restoration Act saying it would promote discrimination against individuals based on sexual orientation. REUTERS/Nate Chute - RTR4VA9Q
Photograph by Nathan Chute — Reuters

The religious freedom laws that legislators have been wrestling with in Indiana and Arkansas have attracted considerable criticism from the leaders of some of America’s biggest corporations, including Apple (AAPL), Salesforce (CRM), Angie’s List, Starbuck(SBUX), Eli Lilly, Wal-Mart (WMT), and even NASCAR and the National Basketball Association. Collectively, their outrage has not only resulted in the governors of Indiana and Arkansas calling for revised legislation, but also reenergized the debate on whether businesses should have a legitimate role in engaging such highly-politicized issues in the public square.

Although some argue that such contentious social issues are not the business of businesses, research has shown that companies can be prime platforms for catalyzing contentious social change. In fact, a recent report suggests that the majority of Americans believe companies wield significant power to influence social change and that they should leverage that power to weigh in on hot-button issues, regardless how controversial. Fostering an inclusive environment for all people to thrive and flourish is important to any organization’s success and leaders ought to stand up and be counted on such diversity-related issues.

The problem is when leaders discriminately pick and choose which diversity-related issues they really care about enough to take an all-in bold stand, while offering only perfunctory sound bites and obligatory checkbook charity to others. This has the effect of making their advocacy appear less credible and more self-interested. While this moment seems to have fueled the emergence of a newfound brand of collective corporate courage in support of LGBT rights, when it comes to other contentious diversity matters, such as race, many corporate leaders avoid that brand of intense public advocacy for fear of potentially disturbing some of their employees, customers, and other stakeholders. The bottom line is that credible advocates for diversity and inclusion cannot simply choose to champion the least uncomfortable or most personally relevant issues. As Apple CEO Tim Cook put it, “discrimination, in all its forms, is bad for business.”

Just weeks earlier, amid heightened nationwide racial tension in the wake of police killings of unarmed African American men in Ferguson, Staten Island, and elsewhere, Starbucks CEO Howard Schultz faced considerable backlash for inviting his organization to actively engage in the admittedly complex, controversial, and emotional social issue of race in America. Although Starbucks’ approach might have benefited from greater strategic refinement and finesse in execution, Schultz’s stated intentions are both socially laudable and in direct service of Starbucks’ business interests.

If all discrimination is indeed bad for business, Starbucks should not have had to stand alone to face critics questioning whether the company had a compelling business need for encouraging a national conversation via its ‘RaceTogether’ campaign, while Apple’s Cook is met with admiration and joined by a veritable who’s who of corporate titans and Hollywood A-listers.

If we really believe that all discrimination is bad for business, instead of tearing Starbucks’ campaign to shreds, we should focus on how to come together to engage in this dialogue. We should have the courage to openly confront our racial biases and the discriminatory practices that they produce.

The unfortunate reality is that in America, some forms of discrimination are perceived as being less bad for business than other forms, which makes it more difficult to muster the courage to boldly confront them. In America, the social acceptability and political expediency of advocating for the protection of LGBT rights, and even gender equity are almost palpable. Meanwhile, advancing genuine introspective dialogue on how to tackle racial bias and discrimination is seen as just too hard and less necessary for mainstream marketplace success – that is, until an internal crisis and public exposure combine to force the issue.

If indeed business is to live up to its full potential as the “dominant social institution of our age,” we’ll need business leaders who responsibly steward the global influence with which they and their organizations have been entrusted. We need business leaders – particularly white men – who possess the discipline to vociferously highlight unconscious, conscious, and collective bias of all kinds, champion the development of cross-cultural competence throughout their organizations, and courageously facilitate the eradication of institutionalized discrimination in the workplace, marketplace, and society – whether on the basis of sexual orientation, religion or creed, class, age, gender, or race. As the global marketplace grows more diverse and interconnected, such brave leadership must become the norm instead of the exception.

Nicholas Pearce is a clinical professor of management & organizations at Northwestern University’s Kellogg School of Management and former Public Voices Faculty Fellow with The OpEd Project.

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