Starbucks: Doing the Right Thing, and Doing Well as a Result

Starbucks’s CEO, Kevin Johnson, absolutely did the right thing and showed more courage than most company leaders when he took personal responsibility for the mistakes made in the Philadelphia shop, where two men were arrested for trespassing. Then he committed to personally righting the wrong.

The First Law of Retail, “People First,” holds that whenever a store’s personal and customers interact, a real community is formed. That community has dynamics and a culture all its own, even if temporary. And a coffee shop, for goodness sake, is a place where people hang out. Running such a shop, you want your guests to be comfortable and happy, regardless of how much they buy. This manager clearly didn’t get it, and Mr. Johnson wants to make certain the other 8,000 Starbucks in the U.S. and Canada do. In a dramatic move, every Starbucks store will close for the day on May 29 to communicate that integral part of the Starbucks culture. They will lose revenue for that day, but the long-term dividends for the brand’s identity will yield very positive results.

Starbucks is one of the most successful retail brands in the history of retailing, and this event is emblematic of one of the reasons. They work to consciously create a positive “cafe culture” where people are brought together in search of community—and coffee. (And usually newspapers.)

Of course, there are other major things that contribute to Starbucks’s sustained success. Like really good coffee, following the Third Law of Retail  “It’s Always the Product.” They turn their product appropriately, making coffee as it’s needed; this is the Second Law of Retail: “Turn Is Magic.” And even though everyone complains about the prices, it’s still a fairly cheap ride for all you get for your money.

But it’s the First Law, “People First,” that requires constant nurturing and reinforcement. Starbucks recognizes this, and that enables them to do well by doing good.