And the Howard Schultz Froth Machine steams on
While “Race Together” exposed Starbucks’ penchant for social campaigns geared more for publicity than actual progress, expect more foam to flow, with plenty of journalists happy to drink it up.
Exactly three years ago today, we asked the question, “Is Howard Schultz’s spin bad for Starbucks?” More specifically, does Schultz’s seemingly insatiable need to attract publicity by riding social issues distract Starbucks from serving its customers and shareholders?
The short answer is that Howard Schultz really doesn’t care, as evidenced by Starbuck’s continued pursuit of dubious social responsibility campaigns that are engineered more to attract attention than to actually foster meaningful progress.
But now today, as the company retreats from the fierce backlash against the company’s clumsy “Race Together” campaign, has Starbucks finally jumped the company-with-a-purpose shark, and will Schultz give up social grandstanding and get back to business?
Why? Because he simply can’t help himself, and because plenty of journalists are more than happy to assist him.
And up until now, it’s probably been good for business. Most of the previous campaigns have drawn relatively little scrutiny, while frequently producing glowing accounts of Schultz’s latest round of future intentions, including an occasional cover story.
Steve Jobs may have famously deployed a Reality Distortion Field, but Howard Schultz has developed his own unique Starbucks Froth Formula. When clumsily applied to highly sensitive issues like race relations, that formula backfired. But when applied to non-controversial causes such as job-creation, bi-partisanship or supporting veterans, it works every time.
Five factors ensure the Starbucks Froth Formula’s success.
1. Schultz is a celebrity “get.” Thus, there will always be a willing media outlet for his latest campaign, especially if access to Schultz is divvied out as “exclusives.” Starbucks capitalizes on the dynamics of access journalism as effectively as any company in the world, trading precious time with their celebrity CEO in exchange for fair-to-fawning treatment.
2. Schultz stands out. Because few other CEOs see any benefit in “taking a stand” on social issues that are peripheral to their companies, Schultz’s social proclamations are novel, and thus qualify as news in a content-starved media environment. The journalistic rationale is “Hey, it might be light on substance, but at least he’s saying something different than most corporate bosses.
3. Schultz knows how to package. He and his team excel in creating non-event events, capitalizing on the topicality of hot social issues by manufacturing a few symbolic gestures and putting Schultz on the stage. For instance, want to champion employment when you’ve actually been shrinking your own workforce? Then why not simply sell job-creating “Indivisible” bracelets for $5 a piece?
4. Schultz keeps moving. By shifting from one cause to the next, Starbucks never faces serious scrutiny on the actual results of its efforts. For instance, a year from now, will any journalist have much incentive to follow up on whether Starbucks actually fulfills the promise it made last week to hire 10,000 disadvantaged teens and young adults? Even if so, that lone report will likely be lost amidst coverage of whatever Starbucks’ new cause of the day might be.
5. Schultz won’t back down. Of all of his strengths as a leader, Schultz’s intrepid sense of conviction has likely been the most important ingredient of his undeniably remarkable success. No matter how skeptical the questioning becomes, Howard Schultz seems to really, really believe Howard Schultz.
In fact, when the criticism rises, Schultz usually doubles-down, as he did in a solemn interview with CNBC’s Jim Cramer, who gamely challenged the wisdom of a commercial enterprise compromising its customer service by trying to tackle racial issues.
In the short term, Starbucks will now likely seek to focus the conversation on its experimentation with delivery service and other issues that are actually relevant to its business, while also dutifully executing the non-cup-signing aspects of “Race Together.”
But not long after the current ridicule subsides, look for the next iteration of the Starbucks Froth Formula to be served your way.