Within the marketplace, Starbucks Coffee positions itself as a “third place.”
From their website,
“In 1983, [Starbucks Chairman and former CEO] Howard [Shultz] traveled to Italy and became captivated with Italian coffee bars and the romance of the coffee experience. He had a vision to bring the Italian coffeehouse tradition back to the United States. A place for conversation and a sense of community. A third place between work and home.”
Recently, a Philadelphia location, in an isolated incident, failed in its mission to deliver a place for conversation and a sense of community by making customers feel unwelcome in a now-viral video which shows upset customers shocked at the treatment of two African-American customers.
Starbucks’ response has been admirable, as Howard Shultz, the de-facto face of the company, made a statement in an interview with Gail King:
“I think you have to say in looking at the tape that she demonstrated her own level of unconscious bias.”
And just like that, the phrase unconscious bias became the topic of the day.
On May 29, Starbucks will close all of their 8,000 stores to educate their employees in a “training program designed to address implicit bias, promote conscious inclusion, prevent discrimination, and ensure everyone inside a Starbucks store feels safe and welcome.”
It’s worth noting that Starbucks as a corporation has never doubted the effectiveness of training, and closing down stores to conduct training isn’t unprecedented for the company. In 2008, Starbucks closed 7,100 stores to practice crafting their drinks, a move that was criticized at the time, but ended up delighting customers and helped realign employees to the company’s goals.
Although the training will cost an estimated $16 million in expenses and lost profits, the move is a strategic initiative for the brand to re-position itself as a true “third place.”
While bias training is certainly a great start, here are a few other lessons that could help Starbucks and other companies avoid making headlines for the wrong reasons!
The Hospitality Industry
It’s important to understand that Starbucks operates within the hospitality industry, and one of the most important aspects of this industry is delivering basic hospitality skills. Although Starbucks typically excels in making customers feel welcome, it’s pretty clear that this manager didn’t know how to do that.
Entrepreneur Tron Jordheim wrote in his blog, “I believe the business goals of a coffee shop are simple. Make people feel welcomed and sell them stuff.” So what processes could you build that would deal with people who sit and do not buy?
How about making friends and making the person feel welcomed, so that person might buy something next time?
Simple rule: A person sits without buying for 20 minutes, a manager goes over and introduces himself or herself and makes small talk about the weather or tells a story about the latest seasonal coffee. In just a couple minutes’ time you have a person who felt welcomed without being pressured to buy anything.
That’s strong hospitality, and certainly helps Starbucks achieve its stated mission of creating a place for conversation and sense of community.
Manager Training
Perhaps most troubling about the Starbucks controversy is that the entire incident was not facilitated by an entry-level employee with little responsibility, but by a store manager who was responsible not only for the day-to-day operation of the store, but also had a greater level of control over things like store culture, hiring, and handling promotions.
One former employee reported to news organizations that manager Holly Hylton had a history of making personnel decisions that were racially motivated.
Although it’s unacceptable for any employee to allow their biases to affect their job performance, the issue becomes amplified when that person is given managerial authority. Managers especially need to understand how biases can affect both the employee experience, and the customer experience.
Bias Training
Most of the language coming from Starbucks is about bias training and unconscious bias.
Over 175,000 employees will receive training that Starbucks CEO Kevin Johnson hopes will teach them about recognizing and managing their own implicit biases.
“Closing our stores for racial bias training is just one step in a journey that requires dedication from every level of our company and partnerships in our local communities,” Johnson said in a statement.
In no way are issues of bias exclusive to Starbucks, and to their credit, the coffee company has done a wonderful job taking responsibility for this event, and offering sincere apologies while working towards a solution in their company culture.
Ultimately, while the day of training will cost Starbucks millions of dollars, they wisely understand that cost to be an investment in re-positioning the chain as a welcoming place, using training to achieve a strategic outcome.
Beyond that, Starbucks has a fantastic opportunity to educate employees on delivering even better customer service, and there’s a business benefit to focusing on diversity: according to Gallup research, when employees feel that their employer values diversity, they are more likely to be loyal to their employer and report far greater job satisfaction.
And equally compelling, a study by Grant Thorton showed that FTSE 350 companies with an all-male leadership staff are 0.53% less productive than members with at least one female executive, a number that translates into $74 billion in lost productivity, or 3% of the UK’s total GDP.
We look forward to seeing how Starbucks’ training helps employees understand how biases affect their relationships within their workplace, as the company realigns their values with those of their consumers.