The wrong thing for the right reason #RaceTogether

There is little doubt Starbucks Coffee Company CEO Howard Schultz is a gutsy man. Earlier this year, he backboned the United States’ coffee giant’s launch of Race Together, a bold campaign to spark discussions about racial inequality at a time when controversial race-based events were unfolding across America. Driven by Schultz’s personal conviction and employee feedback on a sensitive social issue, the company partnered with US media outlet USA Today in a campaign intended to stimulate conversation, compassion, and action around race issues in the country. When it launched this past March, baristas were invited to write or place stickers with the phrase #RaceTogether on customer cups. A certain level of pushback on a complex and divisive issue was undoubtedly expected, but the hailstorm of snarky headlines and social media criticism from all sides of the debate left many public relations professionals shaking their heads. In a company memo, Schultz described the cups as “just the catalyst” for the campaign, and acknowledged the sceptics “as an anticipated part of outreach”. “While there has been criticism of the initiative – and I know this hasn’t been easy for any of you – let me assure you that we didn’t expect universal praise,” he said. Critics were quick to deem the campaign a flop, but a growing number of public relations experts are starting to see indications the marketing movement may have some longer-term payoffs. In the thick of it Schultz is no stranger to acting on his convictions. One of the coffee industry’s most famous CEOs, he has a reputation for standing behind causes he is passionate about and making them a part of corporate culture. The Race Together campaign was just one of his latest efforts to give the company and its employees a voice on sensitive social issues, with past initiatives tackling issues as complex as gun rights and healthcare. This most recent campaign came as a response to a slew of race-based controversies that unfolded across America in 2014 through to the first half of this year, including the nationwide protests over police brutality and officer-involved killings of unarmed black Americans. Schultz gathered hundreds of employee “partners” in several large US cities to participate in open forums to discuss issues of race, prejudice, and lack of economic opportunity. “As these (forums) came to an end, we realised that this was the beginning of a conversation and one we intended to continue as a company into the future,” a company representative tells GCR Magazine. “With stores in most neighbourhoods across the country, we wanted to use our scale for good and create a platform for people to express their point of view and foster meaningful conversation.” Critics were quick to cast stones. Some said the campaign was opportunistic and inappropriate, trying to capitalise on the racially-charged controversies. Others didn’t see how promoting race discussions had anything to do with selling coffee. In light of the criticism, Schultz defended the campaign, telling shareholders: “All I am asking of you is to understand what we’re trying to do, to understand our intentions. We strongly believe that our best days are ahead of us.” So where did things go wrong in a seemingly genuine attempt at corporate social responsibility? According to Dr. Alan Middleton, Assistant Professor of Marketing at York University in Toronto, the problem arose due to the pushback from various groups in a country that has stark differences in viewpoints on social issues. “I think [Starbucks] was surprised at the level of negative response,” he tells GCR, pointing to the response as an example of the vulnerability companies face when taking on big socially-sensitive issues. Despite the backlash, the company is still going strong with other campaign activities. It will continue to hold forums on race and participate in special sections in USA Today over the next year. It has also committed to hire 10,000 disadvantaged youth over the next three years, and open 300 new stores in locations with large minority populations. While not surprised by how the initial part of the campaign played out, Middleton believes Schultz’s effort was genuine. “He’s very much a passionate individual as well as a corporate leader,” says Middleton. “It was done for good reasons.” Preparing for pushback Starbucks definitely “gets” social media. The company has a growing list of promotional and charitable campaigns across various platforms widely recognised for best practices in the industry. The company garnered tremendous success with initiatives like “Tweet-a-coffee”, which allows Twitter users to send, or “tweet”, a pre-paid coffee to another user. It has also used its social media prowess in a successful charitable campaign with Foursquare that benefited AIDS awareness back in 2012. Taking on social issue campaigns, which are often magnified by social media, is an entirely different animal. According to Middleton, it is one that companies who would traditionally stay silent may no longer be able to ignore. “It’s very difficult to have a ‘no comment’ position in this day and age,” he says. While most public relations agencies advise against taking on socially sensitive issues, companies are increasingly getting forced into it. This was likely the case in 2013, when Starbucks asked US gun owners to stop bringing their weapons into its cafés, even in states that permit it. The request was a response to increasing pressure on the company from gun control advocates who had criticised its previous laissez-faire stance. On the other hand, there can be benefits for companies who take a pro-active stance on causes leadership feels strongly about. Middleton points out that while Apple CEO Tim Cook was openly gay, he came out more publicly after taking over from Steve Jobs. Apple’s culture was not only likely to be accepting, but to have an openness on the subject. “Any type of corporation wants to be seen as connected into its communities,” says Middleton. He explains this is increasingly important as the consumer decision on where to buy is becoming not just financial, but where the consumer sees the value system. But reward doesn’t come without risk, and the consequences can be devastating to a company’s reputation. Middleton says the key thing for companies to do, in taking on sensitive issues, is to be prepared. “Any PR agency advising any company says you better prepare for the pushback. It doesn’t matter what the issue is. You better prepare for that, or just shut up,” he says. Glimmer of hope While the campaign may have received wide criticism, financial results this fiscal year may indicate the company emerged unscathed by the social media debate on its efforts to initiate race relations. The company saw stronger sales and sharply higher profit in its second fiscal quarter. It also appears the campaign helped the brand gain a large amount of free publicity. From a branding perspective, US author and President of Arcadia Communications Lab Jonathan Salem Baskin believes the company might also gain more positive long-term benefits. He says that while the premise of the campaign was ill-conceived, impractical, and unlikely to sell a cup of coffee, this is exactly why other brands should follow suit. “Because it’s so bad, the campaign has to be authentic,” he wrote in an article for Forbes. “Name another brand that is similarly guileless, whether taking a stand on an issue, or simply doing something because, well, because.” In an era where consumers are increasingly distrustful of major corporations, it may be a step in the right direction. According to advertising agency Edelman, Starbucks’ agency of record: “Building trust in new business innovations requires that companies demonstrate clear personal and societal benefits, behave with integrity, and engage with customers and stakeholders throughout the process.” According to its 2015 Trust Barometer study, an annual study that tracks trust in global institutions, trust levels in business decreased in 16 of 27 markets surveyed, and is below 50 per cent in half of those markets. “By giving the world a half-baked, though otherwise principled program, Starbucks is demonstrating what real innovation and brand-building are all about,” Salem Baskin wrote in the Forbes article. “#RaceTogether might be remembered as little more than a failed marketing case studied at B-schools, but it’s a hint of what’s possible when a company does the wrong thing for all the right reasons. By doing so, the brand allows us to conclude far more about Starbucks than the sum effects of the specifics.” GCR