Starbucks: Align Every Employee To Core Values: Communication Case Studies

Communication
Case Studies:
Starbucks: Align Every Employee to Core Values
In April 2018, two men went to a Philadelphia Starbucks to meet a friend. They sat at a table
waiting to order and asked to use the restroom. The result? The manager on duty called the police
and the two African American men were—wrongfully—arrested for trespassing.
The video of the arrest went viral and by the next day, #boycottStarbucks was trending on social
media. What might have started as a store manager attempting to follow a company policy turned
into a racially-biased encounter that even the Starbucks CEO called a “reprehensible outcome.”
That CEO, Kevin Johnson, instantly released a statement that included a direct apology to the two
men. To employees and customers, he said, “You can and should expect more from us. We will
learn from this and be better.”
Nike: Business Communication Failure at the Top
Since 1971, when the Swoosh logo was officially unveiled, Nike has been one of the biggest
names in the sneaker world. With endorsement deals with some of the most famous names in
sports, Nike solidified its place as the leader of the pack in the footwear industry and has an
annual profit of $36 billion.
But despite its spot as one of the world’s most profitable apparel brands, Nike has had a few PR
crises that required major repair.
In 2018, female employees spoke out about the male-dominated culture that fostered harassment
and discrimination in the workplace. It started as an anonymous survey by a group of women at
the company’s Beaverton, Oregon headquarters about their experiences. The disturbing results
were delivered to CEO Mark Parker.
Some examples of internal communication problems that went wrong here include:
 It took a renegade survey by a group of employees to reveal this toxic culture

 Lack of trust in HR
 A leader who says he was unaware of the problems
He also outlined a list of internal actions the company would take. A month later, Starbucks
closed 8,000 stores to train 175,000 employees on racial bias and how to make every customer
feel like they belong.
 Realign the entire organization to the company’s core values and mission.
 Encourage bottom-up feedback from partners on how the company was doing from their
perspective.
 Adopt best practices and review policies that create a culture of inclusion and equality.
Recognizing the major failure in their internal communication procedures and how their
“practices and training led to a bad outcome”, Starbucks did an internal investigation into their
policies. It was widely seen as a transparent, authentic response.
Pro tip: Don’t just pay lip service to your employees and your customers. Learn from your
mistakes and take action to revise your policies.
A business communication failure example can be found in every industry, but following internal
communication best practices can help your company avoid them.
Learn how the right software can help your company avoid common business communication
pitfalls.
Pro tip: Be proactive and get ahead of the narrative through authentic, transparent
communication.
2) Wells Fargo: Learn to Accept Responsibility
In any business, it’s always good to be agile and ready to pivot to a crisis communication
plan when the time comes. When it happened to Wells Fargo, the second-largest bank in the
United States, they only seemed to dig themselves into a deeper hole that made it harder to
bounce back.
It started in 2016 when authorities, like the Consumer Financial Protection Bureau, were alerted
to potential fraud. Responding to a top-down demand for aggressive customer quotas, employees
at local branches created upwards of two million fake bank accounts in customers’ names but
without their consent. The bank was fined $185 million.
Wells Fargo’s leadership response potentially hurt the banks’ image as much as the initial
scandal.
 The company’s early public statements neglected to accept any responsibility, nor did
they contain apologies. Instead, they downplayed the fraud. An apology only came from the CEO
when he was brought to testify before the U.S. Senate Banking Committee.
 Leadership blamed, then fired, 5,300 low-level employees.
 The CEO sold $61 million of his Wells Fargo stock the month before the investigation
began.
How to handle a situation like this? An immediate, proactive response.
 Thoughtful, authentic, direct communication to both internal stakeholders to rebuild trust

and establish an open culture
 Apologies to the public for what happened
 Accept responsibility
 Take high-profile actions that change policies and procedures to ensure this will never
happen again
Wells Fargo is still in business, but their reputation remains scarred.

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Communication

Nike: Business Communication Failure at the Top

 It took a renegade survey by a group of employees to reveal this toxic culture

How to handle a situation like this? An immediate, proactive response.

 Thoughtful, authentic, direct communication to both internal stakeholders to rebuild trust

Wells Fargo is still in business, but their reputation remains scarred.

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