Why Starbucks Takes On Social Issues

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from The Wall Street Journal,

Despite backlash, CEO vows to continue some aspects of company’s race relations campaign.

Howard Schultz, one of the most successful entrepreneurs of his time, has become one of its most prominent social activists, too. As the events of the past week have shown, the two roles don’t always mix comfortably.

A social media-fueled backlash against the Starbucks Corp. chief executive’s campaign to foster conversations about race relations in America is sparking questions about the wisdom of his initiatives and a broader debate about where corporations should draw the line in delving into complex and highly charged social issues.

The coffee giant on Sunday discontinued one of the key elements of its campaign, telling employees they no longer needed to write “Race Together,” or to place similar stickers, on cups given to customers. Though Mr. Schultz and Starbucks said halting that element was always part of the plan, the move nonetheless fueled a sense that the company was taking unexpectedly heavy fire for its initiative.

Mr. Schultz vowed to continue other aspects of the campaign—a determination that supporters say is indicative of the 61-year-old’s lack of fear in confronting sensitive issues. But none of the company’s previous initiatives on social issues, from health care to gun rights, has met with as heated a response as its effort on race.

The race initiative “was shocking, it was unnerving,” said Al Gini, a professor of business ethics at Loyola University Chicago. “I think his intentions are honorable, but it’s indelicate.”

Mr. Schultz’s penchant for inserting Starbucks—and its employees—into sensitive issues is rare among executives at publicly traded companies of its size. Businessmen who have taken on a range of social issues, like Bloomberg LP founder and former New York City Mayor Michael Bloomberg, generally haven’t involved their companies directly.

The Starbucks CEO’s actions have prompted speculation that he might be angling toward an eventual run for political office—something Mr. Schultz has no interest in, Starbucks spokesman Jim Olson said on Monday.

People who know Mr. Schultz say he is driven by a genuine desire to achieve change on important issues, which he believes is part of Starbucks’s core identity. And he thinks that fits with the entrepreneurial spirit that has made the company successful, they say. “An issue as tough as racial and ethnic inequality requires risk-taking and tough-minded action,” Mr. Schultz said in his letter to employees on Sunday.

Mr. Schultz wasn’t available to be interviewed Monday.

Mr. Schultz’s efforts have triggered controversy before. He strongly criticized the scarcity of affordable health-care for millions of Americans before the Affordable Care Act was proposed. And in 2013, he told U.S. customers that the coffee purveyor no longer welcomed firearms in its stores, rankling some gun-rights proponents.

One way Starbucks may have ventured too far with the race initiative, some observers say, is by asking its baristas to engage with consumers on a topic some struggle to discuss with their own family members and friends.

“The execution might’ve been too fast,” said Bill George, a senior fellow at Harvard Business School, who knows Mr. Schultz from his years writing and teaching about leadership. “He might’ve gone too far and asked the baristas to do too much.”

Observers say Mr. Schultz isn’t likely to back down because of the pushback. “Howard has this thing that when he gets onto something, he will not let go” …

“Was [Starbucks’ initiative] perfectly executed? No, probably not,” said Scott Bedbury, a brand-development consultant and former Starbucks senior marketing executive. “But the worst thing that could happen here is for other companies to pull back even further into what I see as the safety of their own self-imposed shadows and ignore the problem.”

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