Retail Observer

RETAILOBSERVER.COM JULY 2019 48 O n a Thursday afternoon in April last year, two men walked into a downtown Philadelphia Starbucks to meet a friend. While waiting, they asked to use the restroom, but were refused by an employee who explained that they hadn't bought anything. Soon after, when they were asked to leave, they chose not to. Police were called, and the men were arrested on suspicion of trespassing. The arrest was captured on cell phone video and posted on Twitter. To many of the 8 million people who watched the video, it appeared that the true reason for the arrest was the color of the men's skin – both were black. Overnight, Starbucks had a full-blown PR crisis on its hands. Activists held rallies and called for boycotts. National news reports dove into the controversy. Philly's mayor blamed the company, saying the incident "appears to exemplify what racial discrimination looks like." For a business whose success depends on its customers feeling indulged and happy to pay $4 for a latte, being suddenly branded as institutionally racist was a nightmare. Yet Starbucks managed to avert a disaster. Their response was a masterstroke of PR in the scattered-media landscape of the Internet age. It reflected a deep understanding of a bedrock truth in any era: When dealing with a business crisis, the story you tell — or don't tell – can determine your fate. THE POWER OF MAKING IT PERSONAL Starbucks quickly recognized that the standard non-"apologies" issued by most companies in crisis would have no value. Starbucks CEO Kevin Johnson chose instead to make the story about him. Johnson didn't throw his employees under the bus. "I believe that blame is misplaced," he said in a widely distributed video. "I own it. This is a management issue and I am accountable." He met with the two men and apologized. Then he made the platitudes real, by closing the company's 8,000 stores for an afternoon to hold "racial-bias" training for all employees. In taking personal responsibility for the problem and the solution, Johnson gave his customers and critics a relatable human narrative to make sense of the crisis. Quibble if you like about whether it was enough, but the impact was undeniable. The focus was no longer a green-and-white corporate logo; it was Johnson's somber, determined face. NO SUCH THING AS "NO COMMENT" Starbucks understood how the human innate hunger for an authentic story can be used to turn the tide of public opinion. Equally important, they understood that they didn't have an option not to tell a story. When two of Boeing's new flagship 737 MAX 8 jets crashed in 2018 and 2019, the company denied culpability. Their communications were cold and colorless, projecting a business-as-usual attitude. Not a single executive expressed heartfelt sorrow that 346 people had died in Boeing's aircraft. LOSING CONTROL OF THE NARRATIVE For Boeing, ugly narratives quickly sprang up like weeds. The CEO made news, not for trying to fix the problem but for pressing the White House for presidential authority to keep MAX 8 jets in the air. An image emerged of backroom deals and a corporation more concerned with power than the public trust. In a letter to The Seattle Times, a writer voiced the widespread disappointment: "Boy, have times changed," he wrote. "I now will be checking to see which airlines don't fly a Boeing 737 MAX once Boeing wiggles its way out of this fine mess." THE BOTTOM LINE If stock price is a measure of success, Starbucks weathered its storm. In the six months following the Philadelphia incident, its stock rose by 17 percent. By contrast, Boeing's fell by nearly 20 percent in the three months after the second MAX 8 crash. The lesson for retailers and business owners is that in times of crisis, churn or change, a good story eats an old truth's lunch. It becomes the truth in your customers' minds. Tell your story well, and it will set a marker for where you stand. And no one will be able to claim to tell it for you. THE STORY OF YOUR BUSINESS WILL BE TOLD WITH OR WITHOUT YOU Mario Juarez Business Mindset RO Mario Juarez is an organizational consultant, coach, and motivational speaker. He focuses on helping organizations and individuals achieve better business results through strategic storytelling. An award-winning former journalist, Mario led a series of innovative communications initiatives at Microsoft before founding his company, StoryCo, which serves clients across a range of industries.

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