Is it good business sense to side with a controversial topic such as gay marriage?
Is it good business sense to side with a controversial topic such as gay marriage?
Alright. Breath. Take in the question and then continue.
At an annual shareholder’s meeting, Starbucks CEO Howard Schultz took a bold step in stating Starbuck’s endorsement of same sex marriage, when shareholder Tom Strobhar, founder of the anti-gay marriage Corporate Morality Action Center, questioned Starbucks’ lackluster first full quarter profits. Strohbar believed Starbucks support of same sex marriage legislation in Washington State prompted the National Organization for Marriage to boycott Starbucks.
According to Business Insider, Schultz swiftly states, “It is not an economic decision. The lens in which we are making that decision is through the lens of our people. We employ over 200,000 people in this company, and we want to embrace diversity.”
After Strobhar commented on his disapproval of a 38% return on shareholder investment, (which I would take in a heartbeat) Schultz’s bluntly replied, “If you feel, respectfully, that you can get a higher return than the 38% you got last year, it’s a free country. You can sell your shares in Starbucks and buy shares in another company. Thank you very much.”
Even if taking a stance may affect the bottom line, it may be worth the loss in profit in order to meet one’s civic duty or meet an obligation as a global citizen. Schultz disabuses the long held public belief that a corporation has to choose between doing well and doing good.
Schultz unequivocally prioritizes people over profits – a step forward for gay marriage advocacy – but is it sensible to ‘stick to your guns’ when it ultimately impacts ROI?
Schultz’ primary motive in aligning Starbucks’ lens in accordance with their respective political views questions how a corporation can influence public opinion. At Starbucks, it is not just a matter of buying a cup of coffee; it’s a matter of building a coalition that accurately represents diversity of their consumers and employees.
This stance also raises the idea that corporations can become agents for social change. At a certain point there becomes a point of diminishing return on profits and the need to take a position on an important issue, such as same sex marriage, overrides potential monetary gains or losses.
Should every company take a side or remain neutral so as not to offend or lose customers? Does the CEO of a company have the final word on political or controversial views?
Answer: Depends.
Schultz’s declaration is timely considering the social and public momentum mounting behind same sex marriage. It may not foreshadow the Supreme Court’s final decision on Proposition 8 and DOMA, but it is too important of an issue for him to not to take a position.
Schultz’s decision to put the culture of his company above potential profits is good for business that much is true. You have to respect how he sees the company through the lens of the employees and not solely himself.
Schultz went beyond the Starbucks brand identity and defined the company as a cohesive workforce. This is an important step in identifying what Starbucks is as a company and putting a face behind a product. Schultz could have easily swayed uncomfortably from Strobhar’s comment but he didn’t – a good sign of a strong CEO.
So which is more important? Maintaining brand identity or swaying whenever a shareholder has a gripe? Sometimes doing the right thing for investors might mean crossing the line a little bit.
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