One Thursday afternoon last April, two men walked into a downtown Philadelphia Starbucks to meet a friend. While waiting, they asked to use the restroom, but an employee refused because they hadn’t bought anything. Soon they were asked to leave. They chose not to. Police were then 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 eight million people who soon 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. The mayor of Philly blamed the company, saying the incident “appears to exemplify what racial discrimination looks like.”
For a business whose success depends on customers feeling indulged and happy to pay $4 for a latte, getting branded as institutionally racist was a nightmare.
Yet Starbucks managed to avert 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-apology “apology” issued by most companies in the midst of crisis would have no value. Their 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 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 both the problem and the solution, Johnson gave his customers and his critics a relatable human narrative to make sense of the crisis. Quibble if you like about whether that 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 innate hunger for an authentic story can be used to turn the tide of public opinion. Just as important, they also understood that they did not have an option to not tell a story.
That painful lesson has been learned by another iconic company facing trouble: Boeing.
When two of Boeing’s new flagship 737 MAX 8 jets crashed in separate incidents in 2018 and 2019, the company immediately denied culpability—which, to be fair, was far from determined. Yet their communications were cold and colorless. They projected a business-as-usual attitude and brushed off safety concerns. Not a single executive expressed heartfelt sorrow that 346 people had died in their aircraft.
Losing control of the narrative
Boeing acted as though a public response was unnecessary, perhaps because they viewed themselves as selling to airlines rather than to consumers.
The problem with that approach is that if you don’t provide a compelling narrative about what’s happening, people will spin their own. And that’s never good for you.
For Boeing, ugly narratives sprung like weeds. The CEO made news not for trying to fix the problem, but to press the White House for presidential authority to keep MAX 8 jets in the air. An image emerged of back-room deals and a corporation more concerned with power than trust.
In a letter to The Seattle Times, one writer voiced the disappointment felt by many, recalling his onetime sense of pride and security when stepping into a Boeing jet. “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 following the second MAX 8 crash.
The lesson for any leader or business owner is that in a time of crisis, churn, or change, a good story eats the truth for lunch. It becomes the truth in the minds of your audience. Tell your story well, and it sets a marker on where you stand. Fail to do so, and others will be happy to fill the void.
