by Douglas C. Freeman

I. The Situation
On Wednesday May 30, 2018 the world became exposed to the aftermath of the all-too-frequent phenomenon of corporate rectification: the act of cleaning up a diversity and inclusion mess created by one or more of their employees. While Starbucks is not alone in this activity (United is the first brand that naturally leaps to mind), the manner in which Starbucks has addressed this D&I challenge is truly commendable.
We are all familiar with the set of circumstances in Philadelphia that resulted in the seemingly unfair removal of two African-American Male college students from a Starbucks store. This resulted in the increasingly common social media outrage, driven by phone-based recordings of the situation. As a result of the social media stratosphere, a local incident transformed into a “PBI”- Public Blemish Incident.


II. The Public Blemish Incident

The Public Blemish Incident (“PBI”) is the nightmare that all corporations fear, and is often a key reason to invest in diversity and inclusion initiatives. The PBI cannot be avoided through compliance activities, and in many instances cannot be offset, even by a brand known for social responsibility and social activism. In theory, the installation of a Chief Diversity Officer equipped with budget, resources and C-Suite commitment should serve as a key risk mitigate, and active tool to protect the brand.

The PBI is damaging to the brand of a corporation, undermining the trust built with customers, employees, community and partners. Once the brand has been indefatigably pierced, business metrics such as shareholder value are the next to fall. Combine this with intense traditional/social media scrutiny, and the PBI can result in a devastating impact to the ongoing business activities of a corporation.

In reality, a corporate diversity initiative cannot serve as a true risk mitigate, unless diversity and inclusion is core to business operations and in effect integrated into the DNA of the business. In 18 years of D&I advisory work, I have not heard of, nor experienced a truly business-integrated D&I initiative.

III. The Starbucks Solution

To the credit of the Starbucks C-Suite, the corporation addressed the PBI immediately and effectively by engaging the victims, the Philadelphia community, key community influencers from the NAAACP to Demos, engaged former Attorney General Eric Holder and committed to change via investment in local minority entrepreneurship, along with the 4 hour employee learning across 8,000 stores.

While this is a very strong response and an exceptional commitment to change, (costing the company an estimated $12M), the greater opportunity stands in the area of What’s Next. In fact, What’s Next rests in the form of the broader context of the true goal of any business integrated D&I initiative: To Build a Culture of Inclusion, Engagement and High Performance.

IV. The What’s Next Solution: Build a Culture of Inclusion, Engagement and High Performance

The ultimate goal of diversity initiatives is to serve as core to the business, and as a valuable component of the business. The empirically-based business case starts with employee engagement- which impacts customer loyalty, employee safety, profitability, employee retention and productivity. Pioneering work by Gallup and other employee engagement firms has shown that as levels of inclusion increase in an organization, employee engagement increases as well.

In essence, Inclusion becomes a lynchpin to improving profitability, retention, productivity, safety and customer loyalty. Now Diversity and Inclusion and the mandate to build a culture of inclusion, engagement and high performance is based on key business outcomes- well beyond “doing the right thing.” How then can an organization build a culture of inclusion, engagement and high performance? By developing Inclusive Leadership at all levels of the organization.

V. The What’s Next Implementation: Inclusive Leadership

While a number of organizations speak about Inclusive Leadership, few if any have made a multi-year investment building inclusive leadership competencies across the enterprise. Inclusive Leadership unlike the May 30th training is not about “one and done” but is truly about understanding and doing What’s Next, Right Now.

Examples of core inclusive leadership training include:

  • Unconscious Bias, but applied to the business drivers of hiring, evaluating and promoting talent.
  • Emotional Intelligence, but applied to the business drivers of team dynamics, employee development and retention, and courageous conversations.
  • Inclusive Communications, but applied to business drivers of corporate communications internally and externally, along with day-to-day employee interactions.
  • The actual ROI of Diversity, but applied to business metrics such as recruiting costs, turnover costs, marketing segmentation and communications, B2B sales activities including RFPs and Selling to increasingly diverse buyers.
  • Cultural Competency, but applied to key business drivers such as customer satisfaction scores in diverse demographics, employee interactions, engagement and team dynamics.
  • Inclusive Work Networks, but applied to the key business drivers of workplace networking that impacts how work gets done, and reveals how key networks such as career advice networks can be unintentionally exclusive- leading to the turnover of great talent.

If Starbucks and others truly explain the future of inclusive leadership to employees today, set the expectation that leaders will be developed and prepared, then the business integration of diversity would be closer to a reality. Sustainable, PBI risk mitigation would be established, once and for all!

About Douglas C. Freeman
Founder and CEO: World Diversity Leadership Institute/Summit, Virtcom Consulting and BioVirt LLC (biofuels production).

Douglas C. Freeman is an 18-year Diversity and Inclusion executive with a focus on women’s leadership development, employee resource groups, diversity councils, inclusive leadership learning, data-driven business case modeling, diversity and inclusion metrics dashboards, diversity and inclusion strategy, stakeholder assessment and management, community engagement, diversity media branding and recognition, diversity recruitment and external partnerships, pay equity assessments, board and C-suite presentations, HR and business unit partnership.

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