I’ve spent a lot of time and money supporting Starbucks. I was so committed to the brand that I spent seven years attempting to convince the company’s international execs to award my team with a countrywide license to bring Starbucks to sub-Saharan Africa.
Since then, it has been my common practice to have a tall Cinnamon Dolce Latte at least three times a week. It’s been a good product for me; Starbucks has been a good partner in the community. Its chief executive and founder, Howard Schultz, has been a visionary leader with good business instinct but that all came crashing down on March 20th at the Starbucks’ shareholders annual meeting.
Starbucks decided to double down on mixing its very sound business practices with controversial social politics.
Let’s first recall Schultz’ withdrawal from the Willowcreek Leadership Summit in 2011 after being pressured under threat of boycott by gay activist groups claiming that Sr. Pastor Bill Hybels and his church were anti-gay. Mr. Schultz caved even though the accusations were untrue. He did not make his contractually obligated appearance.
In the annual meeting last week, Starbucks shareholder Thomas Strobhar, founder of Corporate Morality Action Center, suggested to Schultz that the Seattle-based company’s prior support of Washington’s same-sex marriage referendum contributed to declining performance. To be clear, the mission of Mr. Strobhar’s organization is to challenge the ethical issues of our times.
Schultz’ response was less than deferential to his shareholder. Schultz stated that thecompany’s position on same-sex marriage was its way of supporting diversity for its 200,000 employees. He said, “If you feel, respectfully, that you can get a higher return than the 38 percent you got last year, it’s a free country. You can sell your shares of Starbucks and buy shares in another company. Thank you very much.”
Schultz directly implied that Starbucks remains a good investment but indirectly told his shareholder that if he didn’t like the company’s position on gay marriage he could go invest somewhere else. It’s a free country he quipped. Unlike Amazon CEO, Jeff Bezos, and others who have made personal donations to the same-sex marriage campaign, Mr. Schultz drags along his brand at the risk of alienating the masses.
Yes, it is a free country Mr. Schultz and when a business intentionally risks its returns and customer loyalty by unnecessarily choosing sides on the single most controversial and moral issue of our day at the behest of its chief executive, the “free country” may get up and walk away.
Mr. Schultz has every right to speak but everyone knows speaking on behalf of a publicly traded company like Starbucks must be measured and appropriate because a wrong step can crush the company’s stock and hurt investors. On that basis, Mr. Schultz is using a beloved publicly traded brand to promote his personal political agenda. This is reckless and places the very employees he champions at risk. He believes that he and the brand are one. What if Mr. Strobhar is right in his assessment? Does it even matter?
By comparison, Chick-fil-A was attacked because the chairman, Dan Cathy, spoke in favor of traditional marriage last year. Chick-fil-A is a family owned company. Mr. Cathy, a devout Christian, took a risk in expressing his views for sure but that risk was different. He doesn’t have shareholders to please. And recall the national assault by the media and city mayor’s across the country to boycott Chick-fil-A because of Mr. Cathy’s statement. Somehow there is no room for Mr. Cathy’s faith-based support of marriage.
I doubt there will be any national boycott of Starbucks as a result of Mr. Schultz using his Starbucks brand to support gay marriage. It seems only liberal activists are intolerant of the views of corporate execs like Mr. Cathy.
But Mr. Strobhar is a shareholder in a publicly traded company unlike Chick-fil-A and has a voice whether Mr. Schultz likes it or not.
I, on the other hand, am not anti-gay nor am I interested in making a political statement that I disagree with every time I buy my cup of coffee.
Just as he offered his shareholders an invitation to go elsewhere, Mr. Schultz extended me an invitation. And on March 23, 2013, I purchased my last tall Cinnamon Dolce Latte because it’s clear Mr. Schultz doesn’t want my investment in his brand either since I believe the institution of marriage is a religious institution, is between one man and one woman, and not subject to societal manipulation.
How will I build a different brand loyalty in my next coffee habit? One cup at a time.
Follow Marc Little, Author of The Prodigal Republican