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THE BROAD VIEW

Starbucks takes the pain with the blame

The company's move to close for an afternoon for racial-tolerance training has been called a brave gesture, but what after this?

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Sceptics say one afternoon of racial-tolerance training won't change much.

STARBUCKS' decision to close all 8,000 company-owned stores for an afternoon to hold "racial-bias" training raises an important question for companies wrestling with how to respond to crises amid racial tension in an era of social media: Can something be a grand gesture and yet still not be enough?

The company's bold move announced on Tuesday, which followed the social-media uproar and in-store protests that erupted after the arrest of two black men waiting at one of the coffee giant's Philadelphia cafes, was mostly applauded by crisis management and diversity experts, some of whom called it a "courageous" or even "genius" gesture - especially following an initial statement that drew criticism.

Jeff Dickerson, a crisis communications adviser in Atlanta, said: "I think Starbucks is sending a strong message in doing this. Ordinarily, when large companies find themselves in this situation, they have counsel who'd advise them against admitting they'd done anything wrong."

Yet this is Starbucks, a brand that has positioned itself in our national consciousness as not just a restaurant chain or retail operation, but as a "third place" meet-up spot for the community. It has long been vocal about its progressive values, whether through its flawed #RaceTogether campaign or its founder's musings on immigration or same-sex marriage, making an incident like the one in Philadelphia appear even more out of step than it would at other firms.

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As a result, Starbucks had to do more in response than the average company. Paul Argenti, a professor at Dartmouth's Tuck School of Business, said: "You kind of expect Starbucks would do things like this. ... They had to do something more dramatic."

The issue, of course, is racial bias - a complex, systemic problem that some observers said an afternoon of diversity training would do little to change, however well-intentioned it is.

Nicole Sanchez, chief executive of Vaya Consulting, said: "You're going to close your stores for an afternoon and take on 500 years of America's brand of racism?" (Starbucks' chief executive Kevin Johnson has said several times that the May 29 training is only a "first step".)

Ms Sanchez and other crisis communications specialists said the company's initial response could have been much stronger and more unequivocal. Two days after the video of the April 12 incident went viral, Starbucks put out an apology, which made no mention of race as an issue and drew criticism for being too legalistic.

Later that day, Mr Johnson issued a memo to employees that expressed "our deepest apologies", saying "Starbucks stands firmly against discrimination or racial profiling"; he also said he would meet those affected in Philadelphia. On Sunday, he was out with a sombre apology video, saying "the way that incident escalated, and the outcome, was nothing but reprehensible - and I'm sorry".

In response to calls to fire the store manager, he said: "I believe that blame is misplaced. In fact, I think the focus of fixing this - I own it. It's a management issue and I am accountable to ensure we address the policy, the practice and the training that led to this outcome."

By Monday, Mr Johnson sat face-to-face with the two men who had been arrested in Philadelphia, as well as the city's mayor and other officials. Though crisis communications adviser Mike Paul would have liked to see him make that visit sooner, he said it was ultimately the kind of human response the occasion called for.

"When you have a highly flammable emotional situation like a racial crisis, you must match it with a highly emotional solution in the opposite direction," he said, rather than a "legal solution" or a "branding solution".

But it was Starbucks' move to close its stores that stood out the most to crisis management advisers. Carreen Winters, chief strategy officer for MWW Public Relations, said Starbucks had "just upped the game for everyone".

Some analysts have estimated the move could cost the company US$7 million - and Prof Argenti said that one of the key elements of a good apology is to show that it involves some sacrifice: "It's really hard to think about what other hit you could take than putting your money where your mouth is and getting rid of sales for an afternoon."

Yet the real test will be what happens from here. A second allegation has already emerged in recent days, with a video suggesting a black Starbucks customer was not allowed to use a restroom in California while a white customer was. (In a prior statement provided to The Washington Post, Starbucks said it took the incident seriously, and was running a probe into its store practices and guidelines across the company.)

"They've checked the boxes thus far, but people will be watching and looking after the dust has settled here," Ms Winters said. "They will be under the microscope more than ever before." WP