Thursday, March 22, 2012

Starbucks' CEO makes such a standup case for its corporate governance, I may have to start spending more money in their stores


Here's a transcript of the major portion of Starbucks CEO Howard Schultz's reply -- at the Seattle-based coffee company's annual shareholders' meeting yesterday -- to the second of the two questioners in the clip who wanted to know if the company's decision to stand up for the rights of what he called "a small percentage of our employees" unwisely risks offending consumers "in other parts of the country" and "in other countries."
I think what we tried to do in responding to the issue is look at the history of the company, what we stand for, and what we believe in. And the company is not a political organization, but clearly Starbucks has become part of a culture in a number of cities and now countries.

I think the lens in which we tried to respond and answer this question, candidly, was that there's 200,000 people who work for Starbucks. Starbucks in so many ways -- the equity of the brand has been defined by the relationship we have with them, and the relationship they have with our customers. And I think the success that we've enjoyed, which is linked to shareholder value, has a great deal to do with whether or not our people are proud of the company they work for, and feel as if they are part of something larger than themselves.

And in responding to the issue, we made a decision that we believe is right for our company. We believe it's defensible. But we're not reaching that decision to in any way offend you or anyone else, and I would say candidly, since we made that decision, there has not been any dilution whatsoever in our business, and as you can see, shareholder value has increased significantly, in large part because management has made the right kind of decisions that is in the best interest of the entire company.

We have multiple constituencies. The three most important ones are our people and our customers, and we've linked shareholder value to the communities we serve and our people, and I think performance in many ways should be one of the metrics to decide whether or not this decision in any way has been dilutive, and it hasn't been. Thank you.

"In shareholder settings like this one, [Schultz's] presentation is particularly strong -- no lectern, no barrier between him and his audience, and not a hint of defensiveness in his tone. This is the measure of a company’s influence and voice, when its leaders take a principled stand, and defend their decisions intelligently and respectfully."
-- communications specialist Bob Witeck (see below)

by Ken

For the record, the two shareholder-questioners in the clip do everything in their power to present themselves as non-sociopathic, non-frothing-rabid-dog hate-mongers, but to pose their questions as if they're merely shareholders concerned for the financial well-being of Starbucks. Let's pick up the second questioner -- who prompts the response from CEO Howard Schultz of which I've transcribed the portion above:
What concerns me is possible economic boycotts, shareholder resolutions, things that might affect the sales of our company, the earnings, the stock value, things that affect everybody in this room, and other shareholders outside of this room. My question is this: Is it prudent to risk the economic interests of all the shareholders for something that might affect the private lives of a very small percentage of our employees?

What these two eminently respectable-looking gentlemen don't mention is that in all likelihood they're the very people who will be doffing their guise of noncraziness and leading the shrieking for boycotts and shareholder resolutions.

In case you're just coming to the story of the trolls at NOM trying to put the fear of, well, themselves into Starbucks, here's my colleague Lisa Derrick's La Figa post:
Oh Puhleeze, As If! NOM Sez “Boycott Starbucks!” for Supporting Marriage Equality

Lisa Derrick Wednesday March 21, 2012 8:16 pm
Hot on the heels of their loss in New Hampshire, those dregs of America, the National Organization for Marriage, are steaming like frothy Santorum and calling for a nationwide boycott of Starbucks because:
Starbucks corporation issued a memorandum to all “US Partners” declaring that same-sex marriage “is aligned with Starbucks business practices” and “is core to who we are and what we value as a company.”

In addition to declaring its corporate-wide position in support of gay marriage, Starbucks also used its resources to participate in a legal case seeking to overturn a federal law declaring marriage as the union of one man and one woman….

This is why we must urge all consumers to “dump Starbucks,” as well as Seattle’s Best Coffee and Evolution Fresh juices, which are owned by Starbucks.


You know, when the pack of loony tunes calling itself One Million Moms, which I guess they thought sounded better than the more factual "Tiny Band of Shrieking Loonies," set out to bring down JC Penney for daring to hire Ellen as a spokesperson? I wrote about that, along with the spectacularly ill-judged descent of the Susan G. Komen for the Cure foundation into bare-knuckled hard-right politics with its assault on Planned Parenthood, in a February post that I called "Scary as the right-wing propaganda masters can be, periodically they remind us that they're trapped inside their own delusional echo chamber."

I'm kind of relieved to find that the opening paragraph of that post holds up pretty well:
The Right-Wing Noise Machine has shown itself so effective at hoodwinking and hornswoggling large swaths of a gullible American populace that I have considerable respect for the shrewdness of its well-funded chief manipulators. Even so, every now and then we get striking reminders of the extent to which these people are trapped inside their own echo chamber, deluding themselves into thinking that the crackpot ravings they foment actually represent the "thinking" of anyone outside their sphere of influence.

Clearly the Susan G. Komen high command, being pressed hard by its frothing right-wing base both inside and outside the organization, was unprepared for the firestorm that resulted from its announced intention to cut off funding to Planned Parenthood for joint breast-cancer screenings. The foundation wasn't helped by the muck that surfaced, concerning such matters as its history of corporately coercive fund-raising and its extremely poor percentage of pass-along of funds raised for the actual purpose of the charity.

It was interesting to see just today a Washington Post article, "Komen foundation continues to see fallout from Planned Parenthood controversy," reporting considerable financial unease -- though the exodus of high-level Komen people seems to be concentrated now among those who objected to the political hatchetry. You'd think in any case that the organization could afford all kinds of belt-tightening without affecting the small amount it actually spends on fighting breast cancer, but that's probably not the way all those people feeding at the charity trough see it.

As for the Tiny Band of Shriekers' commitment to putting the fear of themselves in Ellen DeGeneres and JC Penney, really now! Going after Ellen, of all people? People love Ellen. Still, we have to give credit to JCPenney for not flinching. Let's recall this bit of Reuters' report at the time:
A spokeswoman for the retailer declined further comment on the issue but did say in an e-mail to Reuters, "jcpenney stands behind its partnership with Ellen DeGeneres" and added that its announcement of the agreement last week sums up the company's view of the popular TV personality.

In that statement on January 25, company president Michael Francis called DeGeneres "one of the most fun and vibrant people in entertainment today, with great warmth and a down-to-earth attitude."


I got permission from my friend Bob Witeck, of Witeck Communications, one of the wisest people I know, to share some "notes" that he shared earlier today with a list of colleagues about the Starbucks corporate response. Bob deals on a regular basis with corporate America, and offers what I think is a fascinating and dead-on perspective: that not only is this the right way to run a company from a human and ethical standpoint, it's also good for business! As the Starbucks CEO keeps pointing out, the company is doing very well with its present philosophy of corporate governance.

A previous listserv poster had expressed admiration for the respectful yet unequivocal stand seen in the clip from the corporate spokesperson, without realizing who exactly the spokesperson was. Bob wrote:
The spokesperson matters especially since it is the Starbucks CEO Howard Schultz. In shareholder settings like this one, his presentation is particularly strong -- no lectern, no barrier between him and his audience, and not a hint of defensiveness in his tone.

This is the measure of a company’s influence and voice, when its leaders take a principled stand, and defend their decisions intelligently and respectfully. His statement cannot and won’t persuade critics and adversaries, but it goes a long way towards building more allies, empowering his employees, and reminding the market that the corporation stands for something.

A memorable and teachable moment for many if not all business leaders too.

I hope everything that Schultz said about the company's regard for its employees, and for its customers, is true, because what he was describing seems to me exactly the kind of relationships one would dream of seeing in a major corporation, at least one in a service business like Starbucks.

By the way, you might profitably follow one of the NOM links, which it thinks answers the question "Why dump Starbucks?" The link is to the memo referred to sent to "U.S. partners" by Kalen Holmes, Starbucks' "executive vice president, partner resources," with the subject line "A Message from Kalen Holmes: Starbucks Supports Marriage Equality." Oh, what the heck, here's the memo. It's such a forceful expression of inclusiveness and of concern for the company's people that I know I'd be thrilled to receive one like it from my company.
Dear partners,

Starbucks is proud to join other leading Northwest employers in support of Washington State legislation recognizing marriage equality for same-sex couples. Starbucks strives to create a company culture that puts our partners first, and our company has a lengthy history of leading and supporting policies that promote equality and inclusion.

This important legislation is aligned with Starbucks business practices and upholds our belief in the equal treatment of partners. It is core to who we are and what we value as a company. We are proud of our Pride Alliance Partner Network group, which is one of the largest Employer Resource Groups for Lesbian, Gay, Bisexual and Transgender (LGBT) employees in the U.S., helping to raise awareness about issues in the communities where we live and work.

For the last 20 years, our benefits program has offered domestic partner benefits in the U.S. These benefits include medical, dental, vision, prescription drugs and alternative health care coverage. All partners (part-time and full-time) in all work locations, whether in a store, a roasting plant or a corporate office, adhere to the same eligibility requirements for health coverage and have access to the same comprehensive health plans.

We are deeply dedicated to embracing diversity and treating one another with respect and dignity, and remain committed to providing an inclusive, supportive and safe work environment for all of our partners.

We look forward to seeing this legislation enacted into law.


Kalen Holmes
Executive Vice President, Partner Resources


In her La Figa post last night, Lisa Derrick went on to say:
[W]e need to keep standing up to the narrow-minded, uptight, bigots who seek to control our minds and our bodies by telling us who and how we should love. And that means letting your local Starbucks manager and the corporate leadership know that you appreciate their stance by crossing their corporate threshold, ordering a cuppa and thanking the Starbuck’s baristas for their company’s all-American, open-minded stance. The same goes for any company that speaks up for marriage equality.

In many communities, Starbucks is the go-to coffee spot providing WiFi, snacks, a place to socialize, read and write, and the ever-important caffeine. And seriously, does NOM actually think that its own members will give up skinny frappuccinos or double caramel lattes? Those NOM moms will be sneaking the Starby’s guiltily, making the mochas even more delicious for their sinfulness.

Make mine a double.

The sentiment seems to me beyond argument. My only problem is this: I really, really don't like Starbucks' coffee. They overroast those poor innocent beans so badly (I'm not saying that they necessarily start with crappy beans, but considering what they do to the suckers, they might as well) that it's no wonder their customers are willing to pay those big bucks to have them dump all that glop in it, just to make it drinkable -- "coffee" for people who don't like coffee, it's always seemed to me. Still, after taking in Howard Schultz's standup presentation here, and the decency of his commitment to both his "people" and his customers, I really feel that I ought to be upping my patronage. I have enjoyed such of their munchies as I've tried, but the last thing I need is to be upping my consumption of those. Still, as a matter of principle --


The clip was posted, incredibly enough, by the NOM loons, who don't seem to understand how badly their side is shown up. Maybe they're just incapable of recognizing someone speaking with the calm dignity that Howard Schultz maintained? This raises the possibility that some of the smarter loons may come to their senses and de-post the clip. In fact, a colleague in the U.K. reported today that no matter what he tried -- and he's been doing this for a while -- he was unable to get sound from the clip.

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At 6:05 PM, Anonymous me said...

"Defense of Marriage", my ass. "Promotion of Right-Wing Religiosity" is more like it.

What an asshole. But you can't expect anything else from a religious nut.

At 6:17 PM, Anonymous me said...

I really, really don't like Starbucks' coffee.

We disagree on that, but you have to give credit where credit is due: If not for the rise of Starbucks, the entire country would still be drinking Folgers and Maxwell House.

At 12:26 AM, Blogger John said...

My first reaction is: "With such a perfect response from its CEO, it would not surprise me if Starbuck's is actually planning to REVERSE it's laudable, BUT NOT HEROIC, stance."

Note: Standing up to loonies is NOT remarkable it is merely normal. (Just as voting for a black man for president is not exceptional but merely NOT being a raving, racist pig)

If the policy stands, it would certainly be a lovely story if only Starbucks actually made coffee instead of extract of ashes of coffee beans.

John Puma

At 1:48 PM, Blogger KenInNY said...

I hear you down the line, John. Of course a corporation standing up to loonies should be normal rather than remarkable, but in the here-and-now world . . . . A phrase that keeps coming back to me in Bob Witeck's commentary on Howard Schultz's presentation is "not a hint of defensiveness in his tone." Maybe I'm easy, but that impresses the hell out of me.

And me, this is an interesting conundrum you pose: choosing between the horror of Maxwell House and Folger's coffee on the one hand and the, um, delight of the Starbucks brew on the other. At least the Maxwell House and Folger's drinkers weren't/aren't paying $4 or $5 a cup for their poison. And I'm not sure that Starbucks and its imitators have done much to increase the availability of and taste for decent coffee, which could be found before the coffee "revolution" and can still be found.

Given my sudden admiration for Starbucks as a corporate entity, though, I'm reminded of a suggestion made some years ago by my friend Richard, who also can't abide the taste of the Starbucks charcoal brew but has also quite enjoyed all of the Starbucks edibles he's had occasion to taste-test. As he pointed out, you could always have tea.


At 8:41 PM, Anonymous me said...

Maybe I'm just a philistine, but I appreciate Starbucks compared to what's available at work or the local cafeteria. What's better? Peet's? I like Peet's, but I don't find it all that different from Starbucks.

I'm sure it was possible to get decent coffee in the old days, but it wasn't easy, and no one I knew could tell the difference. Yuban was considered the high-quality coffee.

So if there's better coffee available, how much better? And how to get it? The law of diminishing returns always applies.

At 12:02 AM, Anonymous Bil said...

STILL boycotting Target.

NOW I read Jacque Penney's brochures.

Me, my green coffee beens roasted at home for a few minutes in my oven (or hot air popcorn popper is fresher-better, and a fraction of the price.

you asked. TGIF!

At 4:00 PM, Anonymous me said...

I guess I'm just too lazy. I even gave up grinding whole beans myself, and buy ground coffee now (Peet's or Starbucks).

Roasting or even growing my own might be fun, but these days who has time for such things? I'm too busy working my ass off to pay the rent.


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