Closing Chapter Case: Crisis Cools at Starbucks - Part 2 The arrest of Rashon Nelson and Donte Robinson at the Rittenhouse Square Starbucks in Philadelphia inflicted immediate damage on the company and had the potential for substantial, long-term damage. However, the company's management response was swift and decisive, including an apology from CEO Kevin Johnson and an announcement to close stores for part of a day in the future to provide mandatory racial-bias training. Many analysts hailed the company's crisis response as appropriate. CEO Kevin Johnson was applauded for immediately accepting full responsibility. Johnson apologized to the individuals publicly and met with them shortly after the incident (Marszalek, 2018). Crisis communications advisor, Jeff Dickerson commented: "I think starbucks is sending a strong message in doing this ... They're bucking the trend, because ordinarily when large companies find themselves in this situation, they have counsel who will advise them against admitting they'd done anything wrong" (McGregor, 2018). The second component of Starbuck's response was a May 29 training session on racial bias. This action was noteworthy because it required closing 8,000 stores, including 175,000 employees, costing an estimated $1216 million in revenues (Marszalek, 2018). The training sent a message that Starbucks was serious about ensuring that the Philadelphia incident did not recur. Crisis communications expert Timothy coombs viewed the move to close stores as dramatic and extraordinary, adding that the company took corrective action and was willing to forego significant revenue to amend the situation (Marszalek, 2018). Starbucks' response to the crisis offers an instructive playbook for other CEOS facing similar situations (Whitten, 2018), but opinions vary. Some commentators suggested that one day of training was insufficient, suggesting multiple sessions held more often 292 would be preferable. This strategy would ensure that all employees are familiar with and capable of dealing with racial bias if it occurs (Whitten, 2018). Some analysts pointed out that while Starbucks responded decisively, the company could have moved more quickly. Jamie Izaks, president of All Points Public Relations commented that the company's response was a day late given the fast-paced events occurring with the crisis (Lalley, 2018). Eric Schiffer, chairman of Reputation Management, told CNBC: "The CEO was slow to address race, which remains a big stain on Starbucks' brand trust" (Whitten, 2018). Lateness aside, it does appear Starbucks vors trying to get it right by ultimately apologizing for the arrests and designating a trainiog day for racial bias training. Many large restaurants and stores with thousands of employees must address simker situations every day. Frontline workers are the face of the company's brand. As this crisis demonstrates, a mistake can cost a firm in lost revenues, reputation, or both. Furthermore, it can harm innocent individuals such as Rashon Nelson and Donte Robinson, who still had to spend several hours in jail. Case Discussion Questions 1. Although not reported in this case, the two men arrested, Rashon Nelson and Donte Robinson, accepted a financial settlement with Starbucks. What were terms of the agreement? Do these terms influence your interpretation of the case? Why or why not? 2. Some analysts suggested that one day of racial bias training, although a not gesture, is insufficient to change the entire culture of a company. What car large organization like Starbucks do to build a more positive culture overt Closing Chapter Case: Crisis Cools at Starbucks - Part 2 The arrest of Rashon Nelson and Donte Robinson at the Rittenhouse Square Starbucks in Philadelphia inflicted immediate damage on the company and had the potential for substantial, long-term damage. However, the company's management response was swift and decisive, including an apology from CEO Kevin Johnson and an announcement to close stores for part of a day in the future to provide mandatory racial-bias training. Many analysts hailed the company's crisis response as appropriate. CEO Kevin Johnson was applauded for immediately accepting full responsibility. Johnson apologized to the individuals publicly and met with them shortly after the incident (Marszalek, 2018). Crisis communications advisor, Jeff Dickerson commented: "I think starbucks is sending a strong message in doing this ... They're bucking the trend, because ordinarily when large companies find themselves in this situation, they have counsel who will advise them against admitting they'd done anything wrong" (McGregor, 2018). The second component of Starbuck's response was a May 29 training session on racial bias. This action was noteworthy because it required closing 8,000 stores, including 175,000 employees, costing an estimated $1216 million in revenues (Marszalek, 2018). The training sent a message that Starbucks was serious about ensuring that the Philadelphia incident did not recur. Crisis communications expert Timothy coombs viewed the move to close stores as dramatic and extraordinary, adding that the company took corrective action and was willing to forego significant revenue to amend the situation (Marszalek, 2018). Starbucks' response to the crisis offers an instructive playbook for other CEOS facing similar situations (Whitten, 2018), but opinions vary. Some commentators suggested that one day of training was insufficient, suggesting multiple sessions held more often 292 would be preferable. This strategy would ensure that all employees are familiar with and capable of dealing with racial bias if it occurs (Whitten, 2018). Some analysts pointed out that while Starbucks responded decisively, the company could have moved more quickly. Jamie Izaks, president of All Points Public Relations commented that the company's response was a day late given the fast-paced events occurring with the crisis (Lalley, 2018). Eric Schiffer, chairman of Reputation Management, told CNBC: "The CEO was slow to address race, which remains a big stain on Starbucks' brand trust" (Whitten, 2018). Lateness aside, it does appear Starbucks vors trying to get it right by ultimately apologizing for the arrests and designating a trainiog day for racial bias training. Many large restaurants and stores with thousands of employees must address simker situations every day. Frontline workers are the face of the company's brand. As this crisis demonstrates, a mistake can cost a firm in lost revenues, reputation, or both. Furthermore, it can harm innocent individuals such as Rashon Nelson and Donte Robinson, who still had to spend several hours in jail. Case Discussion Questions 1. Although not reported in this case, the two men arrested, Rashon Nelson and Donte Robinson, accepted a financial settlement with Starbucks. What were terms of the agreement? Do these terms influence your interpretation of the case? Why or why not? 2. Some analysts suggested that one day of racial bias training, although a not gesture, is insufficient to change the entire culture of a company. What car large organization like Starbucks do to build a more positive culture overt