Starbucks' Battle Against Bias

It takes a crisis of major proportions to compel a retailer to close stores for any amount of time. But that’s exactly what Starbucks is facing, and that’s exactly what the company is doing.

In response to the outcry over what many view as the racially biased arrest of two black men at one of its stores in Philadelphia, Starbucks said that it would close more than 8,000 US locations on May 29 for unconscious bias training. The move, which could cost the Seattle-based coffee giant around $17 million in lost sales, shows that the company is “really putting its money where its mouth is and really putting a stake in the ground about the importance of this to its business and brand,” says Louis Montgomery Jr., co-leader of Korn Ferry’s Chief Diversity Officer practice in the United States.

This kind of sweeping move is rare for a retail brand—Johnson & Johnson pulling Tylenol completely off store shelves in the early 1980s and, more recently, Chipotle closing stores for food safety training after a series of contamination outbreaks in 2016 come to mind. But experts say for Starbucks, which bills its stores as chill places for people to hang out and its brand as socially and environmentally conscious, this comports with the values it espouses. “For an organization like Starbucks, brand training is perhaps even more critical than skills training,” says Craig Rowley, global practice leader for Korn Ferry’s Consumer sector. “That a store manager would even think of this as an alternative tells them that something is not going right with their training and development.”

That certainly appears to be the thinking of Starbucks founder and executive chairman Howard Schultz and CEO Kevin Johnson. In an interview with CBS This Morning, Schultz said he was “embarrassed” and “ashamed” and found what happened “reprehensible,” adding that the closing of the stores is “just the beginning of what we will do to transform the way we do business and educate our people on unconscious bias.”

Training people about unconscious bias, or latent subjective factors like cultural fit or college attended that hinder diversity and inclusion efforts, is one thing. Measuring whether that training ends up being applied is quite something else. Consider that the service sector is a high-turnover industry to begin with, so a company like Starbucks has new managers and new baristas starting all the time. Rowley says it is not uncommon for a retailer the size of Starbucks to have 15% or more annual turnover for store managers and an even higher percentage for baristas. By way of example, a 10% turnover rate for the stores that are closing for a day equates to 800 new managers and 17,500 new baristas at any one time.

The easiest way to measure the success of unconscious bias training is by not having another incident such as this one happen again. But the law of large numbers suggests that it likely and unfortunately will. Part of the reason for that, Montgomery says, is because one of the biggest obstacles to overcoming unconscious bias is that many people don’t even believe it’s real. “Just the fact that Starbucks is so vocally condemning what their employee did is a defining event that says they believe unconscious bias is real and they intend to do something about it.”

Other ways to measure whether unconscious bias training is taking hold, according to both Rowley and Montgomery, include: customer satisfaction surveys; employee surveys to gauge sentiments about the training itself; tracking the hiring and retention of a diverse and inclusive employee base; incorporating brand values and behavior metrics in performance management; and ongoing coaching, among other methods.

“You need a mixture of awareness and reinforcement to fix unconscious bias,” Rowley says.

Authors

  • Craig Rowley

    Senior Client Partner

    Bio >
  • Louis Montgomery

    Senior Member
    Human Resources & Corporate Officers

    Bio >