Starbucks Corp. has had its share of challenges since CEO Kevin Johnson took the helm a year ago. Its annual same-store sales growth in 2017 was its weakest since 2009, and traffic largely has been sluggish at its North American restaurants.<\/p>\n
But in recent days, Johnson has faced his biggest leadership test yet, in the controversy over the arrest of two black patrons in one of the chain’s Philadelphia stores. So far, his handling of the matter suggests he has what it takes to steer the Starbucks empire.<\/p>\n
For one, Johnson has demonstrated he takes this episode seriously. He issued an apology video. He travelled to Philadelphia to meet with the arrested men, as well as the city’s mayor and police commissioner. And most notably, the company announced it would close more than 8,000 of its stores for part of a day next month so employees can attend racial-bias training.<\/p>\n
The store closure should only cost Starbucks about US$16.7 million in lost sales, Bloomberg News estimates \u2014 hardly a venti-sized dent in the balance sheet of a company with US$22 billion in annual revenue. But it’s still a sweeping and unusual action \u2014 which is precisely what Starbucks needed in this moment.<\/p>\n
Undoubtedly, this kind of incident would be tough for any consumer business to navigate. But it’s especially nightmarish for Starbucks, which has spent years making inclusivity a core part of its brand. Just weeks ago, it issued a press release touting its “100 percent pay equity” for workers of all races and genders performing similar work in the U.S.<\/p>\n
This is a company that once urged baristas to write “Race Together” on coffee cups to spark conversations about racial issues. That was a clunky idea, but you get the point: Starbucks fancies itself a leader on this stuff, so it’s especially glaring when it comes up short.<\/p>\n
But faced with a bad situation, Johnson had the right instincts. He didn’t try to pass this off as a regrettable but forgettable mistake by someone far down the Starbucks corporate food chain. He said in his video, “I own it. This is a management issue, and I am accountable.” He struck a similar tone in an interview with Robin Roberts on Good Morning America. He likely earned some goodwill with Starbucks’s massive employee base by shouldering responsibility.<\/p>\n
And consider how often any sprawling, global retail empire such as Starbucks walks into some social or political issue. Last year it got some blowback for announcing plans to hire 10,000 refugees. It has been repeatedly dragged into inane dustups about its holiday coffee-cup designs.<\/p>\n
But Johnson knew right away this was a different scale of controversy, and he acted accordingly.<\/p>\n