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Starbucks, #RaceTogether, And How Companies Do Good The Right Way

Is that socially engaged corporate effort genuine or mere lip service? Here’s how to tell—and how to improve your own do-gooder work.

Starbucks, #RaceTogether, And How Companies Do Good The Right Way
Starbucks Chairman and CEO Howard Schultz addresses the #RaceTogether Program during the Starbucks annual shareholders meeting March 18, 2015 in Seattle, Washington. [Photo: Stephen Brashear, Getty Images]

Earlier this year Etsy, the e-tailer specializing in handmade goods, filed for an IPO and went public. In doing so, it became only the second B-corporation to trade on the New York Stock Exchange. In a blog post about the momentous occasion, CEO Chad Dickerson insisted that “running a values-led company” would continue to be Etsy’s highest priority—and inform its bottom line—regardless of the whims of shareholders or the volatility of the market.

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“Etsy has become a touchpoint of debate for larger issues, including whether the human-centered craftsmanship that we exist to support is compatible with being a public company, which requires a new set of responsibilities to shareholders,” wrote Dickerson. “We understand the concern, but reject the premise that there is a choice to make between the two.”

For a decade, Etsy has presented itself as a good-guy corporation, so to speak, placing a higher calling at the forefront of its business. It shares that distinction with other do-gooder brands—Warby Parker, Toms, Patagonia, and even Google, which despite its recent run-in with the European regulators, has long pushed its “Don’t be evil” philosophy (though that has been altered to a more market-friendly “You can make money without doing evil.”)

What consumers see now is a sea change among companies—and their CEOs—to prove that their businesses aren’t purely driven by profit, that there is such a thing as a corporation with a soul.

“What happened primarily around 2008 was CEOs were being vilified,” says David Yoffie, a professor of International Business Administration at Harvard Business School and co-author of Strategy Rules: Five Timeless Lessons From Bill Gates, Andy Grove, And Steve Jobs. “Just being a CEO meant that you were often considered to be evil [and] the public perception of CEOs had swung so far to one side that it stimulated at least a set of very socially conscious CEOs to say, ‘We need to correct the balance.’

Yoffie notes that the global financial crisis of 2007-08 saw outsized—and overconfident—behemoths like Lehman Brothers and Bear Sterns go under, taking the American economy with them, and sparking the rise of the Occupy Wall Street movement and calls for the toppling of the 1%.

Since then, corporations and their leadership have been attempting to rebuild trust—with a largely distrustful public—in part through socially-conscious campaigns. But how are “we the people” to distinguish between what is real and what is pure lip service? And how can corporations engage with the public without alienating them—and their shareholders?

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“I do believe that it is appropriate for leaders to make clear what their organization’s values are so that investors, employees, customers, clients, partners, etc., will have a clear idea of what the organization stands for,” says Nicholas Pearce, a clinical assistant professor at the Kellogg School of Management specializing in values-driven leadership.

Consider companies like Unilever-owned Dove, which for several years, through it’s viral Real Beauty Campaign, has made it clear that positive body image and high self-esteem are part of its core values. The campaign has received its share of flack and regularly combats accusations of pandering, but there’s little doubt that Dove and these concepts are now inextricably linked.

“I believe [corporations] should not engage hot-button social issues just for the sake of being controversial or edgy,” says Pearce. “But rather executives should be willing to take a principled stance on issues that matter to the organization.”

Additionally, Pearce suggests that, as consumers, we should look to the top when considering how meaningful such stances really are. In the case of Starbucks’ misguided #RaceTogether campaign, for example, Pearce says it makes sense that the public would be suspicious of a company with a mostly Caucasian leadership team taking on the issue of race relations in America.

“When we look at the board level, when we look at the executive team, when we look at managers, when we look at every level of the organization, we should have seen that Race Together was a value that played out within the Starbucks culture” says Pearce. “The difference between Starbucks at its core and the tactics they were trying to employ to engage people externally could have been thought through a little more deeply.”


On the corporate side of things, Yoffie believes it is imperative that CEOs take a hard look at their business before engaging in fraught conversations or diving head first into socially conscious campaigns.

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“It is not a new idea that large organizations and their senior management teams should be engaged in their communities and should be thinking broadly not just about their shareholders, but the local communities in which they operate,” says Yoffie. “At the same time, that doesn’t necessarily mean that every company should take responsibility for large social issues. Some companies are not well-positioned to do that; some companies don’t have the facilities or the capabilities.”

Here, Yoffie points to both businesses that convey largely unpopular opinions–see: Chick-Fil-A–and the many business-to-business corporations, like Oracle and Siemens, whose absence in the day-to-day lives of consumers leaves them in a poor position to offer meaningful commentary on social issues.

But for those B2Bs that do want to engage in social issues, Yoffie suggests going about it in a creative way, citing Intel, which has very little direct contact with consumers, as an example of a company that’s found a way to make itself more visible and well-trusted. Last year, the tech giant quietly announced that it had begun work on removing conflict minerals from its supply line, and in January, the company made public its intention to invest a whopping $300 million in workplace diversity while earlier this month, the company’s venture arm, Intel Capital, put aside $125 million for women- and minority-led startups.

Intel is joined by General Electric, which does work with consumers in some capacities, but is better known for its many B2B divisions, including Healthcare, Aviation, and Capital. Still, the company has built itself a strong reputation as a champion of science and innovation, launching last year’s imaginative, girl-power-leaning “What My Mom Does At GE” ad while cultivating a strong social media following, where the company has dubbed its most loyal fans “AVgeeks.”

“For some companies” says Yoffie. “There are other ways in which you can engage the community and try and improve the stakeholders without necessarily attacking big social questions.”

But for those CEOs and companies that do choose to engage with large social issues, it’s a question of choosing the right types of discussions. Pearce contends that even in light of the Race Together snafu, Starbucks and corporations like it shouldn’t be afraid to broach these tough questions again. And as consumers, we should look to how tough of an issue corporations are willing to take on to gain some clarity into the quality of their activism.

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“What I think many organizations have done is chosen social issues that they know they have the ability to galvanize widespread support on and chosen to champion those causes, which is almost a no-brainer,” says Pearce, emphasizing that it’s relatively easy to support, say, women’s rights and veterans’ causes because these issues already enjoy widespread support.

“I think corporations are going to find themselves increasingly in the crosshairs to weigh in on these issues of race and ethnicity in a nuanced, sophisticated, and authentic fashion,” says Pearce of Starbuck’s own broaching of truly difficult subject. “I sincerely hope that more organizations will step up to the plate and be willing to take the hit for the inconvenience that this conversation engenders.”

Meanwhile, both Pearce and Yoffie insist that we may have finally entered an era where corporations and CEOs are truly attempting to affect positive change, which, Yoffie estimates, could give them better standing with wary consumers living in a post-recession world.

“It is certainly possible that someone could be trying to pull the wool over our eyes and espouse certains social issues in order to get people to be more engaged in their product,” says Yoffie. “[But] you can at least make a logical argument that the only reason you would imagine that a company would do this is because they believe in it.”

And if that is the case, all consumers can do is have is a fledgling amount of trust, just enough to give corporations leeway to figure out where they stand while, as Pearce suggests, also holding them accountable—and keeping a careful eye on their track records.

“When you look at who has power and where resources are being deployed and expended, you gain tremendous insight into an organization’s true priorities beyond the bullet points, beyond the corporate social responsibility report, beyond the CEOs talking points,” says Pearce. “Whether this leader is respectable, whether this leader is worthy of that level of confidence—that’s something you can only build through relationships, something you can only build through track records, something you can only build over the course of time.”

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About the author

Nikita Richardson is an assistant editor at Fast Company magazine.

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