Howard Schultz Steps Down from Starbucks and Speculation Abounds

Howard Schultz's career may get more interesting. After an incredible 40-year success story with Starbucks, Schultz announced he's stepping down from the company's board of directors.

The Seattle Times reports that Schultz planned the announcement before the controversy about two black men arrested in a Philadelphia store. He waited until the news died down, and now, the time seems right.

Schultz has never shied away from political topics, and this isn't the first time people are speculating about a presidential bid. But this time, Schultz isn't denying the possibility, as he told The New York Times:

“I want to be truthful with you without creating more speculative headlines. For some time now, I have been deeply concerned about our country — the growing division at home and our standing in the world.

“One of the things I want to do in my next chapter is to figure out if there is a role I can play in giving back. I’m not exactly sure what that means yet.”

Schultz also responded to a question about a potential presidential run:

“I intend to think about a range of options, and that could include public service. But I’m a long way from making any decisions about the future.”

He certainly has a simple, nicely designed website with a video introduction. Regardless of his campaign decision, Schultz seems to have some plans for a future. With the multiple ways to provide contact information ("Let's stay in touch!"), the focus is clearly on connecting with people.

See additional communications about the news:

• Company press release
• Schultz's letter to employees
• Video of Schultz addressing employees

Image source.

Discussion:

• Assess Schultz's website and video. Who are his primary and secondary audiences, and what are his objectives?
• Why do you think Schultz emphasizes staying connected? Other than for political reasons, what could be his motivations?
• Read the company's press release. What are the main points?

Cold Email Examples

The CEO of Mapistry, a start-up software company for storm water compliance, posted and analyzed her past emails to VCs, venture capitalists who could invest in her company. Allie Janoch disputes the claim that you need an introduction to a VC; she has had some success in sending cold emails.

Her first email, Janochs admits, says little about her company and undermines the message with self-deprecation.

She didn't get a response. Her second email, when her company had more traction, includes a specific subject, focuses on problem solving, uses bullets for important data points, and is personal.

Discussion:

• What do you consider the strength's of Janoch's second email?
• What improvements could she make?
• How does each email demonstrate humility? The first, as Janoch says, is self-deprecating. What's the potential problem with this approach? How does the second email demonstrate humility as well as confidence? How well does Janoch balance the two?

Starbucks Clarifies Policy

Following criticism for arresting two black men in a Philadelphia store, Starbucks has set a new policy for bathroom use. Company leaders decided to adopt a more open policy, allowing anyone to use a store bathroom without purchasing products.

But people questioned the effect on Starbucks locations, worrying the policy would invite homeless people and drug users. Customers want space available for themselves. Employees, particularly, complained that the policy didn't have enough guidance for them to know, for example, when to call the police.

The new policy lists the following expectations for people in their stores:

• Using spaces as intended
• Being considerate of others
• Communicating with respect
• Acting responsibly

The policy also refers to "Addressing Disruptive Behaviors" procedures and clarifies, "If a situation presents an immediate danger or threat to partner or customer safety, Starbucks partners should call 911."

I'm struggling with the term "customer." The policy uses this terminology, and the WSJ article refers to paying and non-paying customers. To me, the latter is an oxymoron, but perhaps it is not given the company's mission to create a "third place."

Image source.

Discussion:

• What benefits and potential downsides do you see from Starbucks' open policy?
• How could Starbucks further clarify the policy to address customers' and employees' concerns?
• One point of clarification, if you haven't mentioned it, is about timing. How long should people be permitted to stay without purchasing an item? What are your thoughts about what is fair?
• What's your view of the term "customer" in this context?

"Can We Use 'I'?"

In an article, "The Soul-Crushing Student Essay," a writing instructor at The New School in New York City laments first-year students' writing. Every semester, he says, students ask, “Do you mean we can write with the word ‘I’?” He says, "Somewhere along the way, these young people were told by teachers that who they are in their writing ought to be divorced from who they are on their phones, or as the writer Grace Paley may have said, with their families and on their streets."

He encourages students to write about their own experience:

First, we need to value more the complete and complex lives of young people: where they come from, how they express themselves. They have already lived lives worthy of our attention and appreciation.

Second, we need to encourage young people to take seriously those lives they’ve lived, even as they come to understand—often through schooling and just as often not—that there’s a whole lot more we’ll expect of them. Through this, we can help them learn to expect more of themselves, too.

I'm sensitive to the topic because several students recently asked me this question about their final assignment—a self-reflection paper.

Image source.

Discussion:

• Were you taught to avoid "I" in writing? What was the reason?
• What is the value of writing from your own experience?
• How does using "I" make your writing clearer and more concise?

Chipotle CEO Generates Excitement

After a dismal three years of food-safety issues, Chipotle saw a strong first quarter, and CEO Brian Niccol is confident about the company's future. Since the outbreaks, part of Chipotle's turnaround plan was to introduce new menu items, but they did not prove successful.

In an interview, Niccol described new plans, which may include drive-thrus, longer hours, mobile ordering, or menu items that are more thoroughly tested. But Niccol resists offering deals and breakfast, despite what Bill Ackman, Chipotle's largest shareholder, advises:

“I’ve been very clear with him: Not now, Bill and I have had a couple of really good conversations. He may have some ideas that I don’t think are the right ones now.”

Here's the earnings call webcast. In the press release, Niccol further explained the company's plans:

"While the company made notable progress during the quarter, I firmly believe we can accelerate that progress in the future.  We are in the process of forming a path to greater performance in sales, transactions, margins and new restaurants.  This path to performance will be grounded in a strategy of executing the fundamentals while introducing consumer-meaningful innovation across the business.  It will also require a structure and organization built for creativity, action and accountability.  Finally, Chipotle will have a culture that is centered on running great restaurants, putting the customer first, innovating for today and tomorrow, supporting each other, and delivering on commitments.  The future will be meaningful at Chipotle."

(Disclosure: I own a modest amount of Chipotle stock.) Image source.

Discussion:

• Assess the earnings call or press release. What business jargon do you identify? Is it too much, or is it appropriate for the situation and audience?
• Niccol is challenging Ackman's ideas, which is risky for a new CEO. How do you interpret his statement? Again, is what he says appropriate for the situation, or should he present his views differently?
• Would you say that Niccol is demonstrating courage in his statement about Ackman? Why or why not?

Volkswagen Replaces Chairman

Three years after the emissions scandal, Volkswagen is replacing another chairman. Matthias Müller replaced Martin Winterkorn, who was ousted soon after the news broke in 2015. But Müller was another insider and hasn't led the turnaround the board expected.

Like Winterkorn, Müller struggled with public relations. During a 2016 NPR interview, Müller claimed the company misunderstood the American environmental law: “We didn’t lie. We didn’t understand the question [at] first.” After much criticism, VW’s communications department asked for another interview, which was granted. He delivered a better apology but blamed the first interview on “all these colleagues of yours and everybody shouting.” In other words, it was noisy. 

As is customary in corporate change announcements, Chairman of the Supervisory Board Hans Dieter Pötsch spoke positively about the outgoing executive:

“Matthias Müller has done outstanding work for the Volkswagen Group. He assumed the chairmanship of the Board of Management in the fall of 2015 when the Company faced the greatest challenge in its history. Not only did he safely navigate Volkswagen through that time; together with his team, he also fundamentally realigned the Group’s strategy, initiated cultural change and, with great personal commitment, made sure that the Volkswagen Group not just stayed on track but is now more robust than ever before. For that, he is due the thanks of the entire Company.”

The new chairman, Dr. Herbert Diess, offers more hope. Diess joined the board in 2015 and is known for having conflicts with the union and for cost-cutting. He may shake up the status quo at VW and inspire real action. The company has aggressive plans, including building greener cars—for real this time.

Image source (VW cover).
Image source (Diess).

Discussion:

• Assess the company's statement about this change. Who are the primary and secondary audiences? What are the communication objectives? How well does the statement meet those objectives?
• Why do these statements typically include positive quotes about outgoing executives, even if they are asked to leave or, as this statement indicates, they leave "by mutual agreement"?
• What lessons do you think Volkswagen learned since the scandal?
• Why would the board appoint someone who is considered divisive?

Mariah Carey Talks About Having Bipolar Disorder

In 2001, singer Mariah Carey learned she had bipolar disorder, and now she is admitting it to the world. In an People magazine cover story, Carey talks about her initial denial and her decision to open up about her diagnosis:

“Until recently I lived in denial and isolation and in constant fear someone would expose me. It was too heavy a burden to carry and I simply couldn’t do that anymore. I sought and received treatment, I put positive people around me and I got back to doing what I love — writing songs and making music.”

“I’m just in a really good place right now, where I’m comfortable discussing my struggles with bipolar II disorder. I’m hopeful we can get to a place where the stigma is lifted from people going through anything alone. It can be incredibly isolating. It does not have to define you and I refuse to allow it to define me or control me.”

Bipolar disorder, also called manic-depressive disorder, affects about 5.7 million adults in the U.S., which is about 2.6% of the population.

Reactions to the news seem mostly positive, with comments such as this on Twitter:

This story reminds me of a TedX talk, "Everyone Is Hiding Something" about a woman's struggle with an eating disorder.

Image source.

Discussion:

• What are the potential personal and professional consequences to Mariah Carey of going public with her diagnosis?
• What do you hide about yourself that might be useful for others to know?
• What is the value of admitting personal struggles in the workplace?
• How does Mariah Carey's story demonstrate leadership character dimensions, such as courage, compassion, authenticity, and vulnerability?

Nike Memo Describes Diversity Failings

The head of HR at Nike wrote a memo describing how the company has not lived up to plans to promote women and people of color. Nike has been grappling with complaints about its "boys-club culture," and the memo may have worsened the situation.

When complaints surfaced, Chief Executive Mark Parker said, “When we discover issues, we take action. We are laser-focused on making Nike a more inclusive culture and accelerating diverse representation within our leadership teams."

Weeks later, HR Chief Monique Matheson wrote in the memo that the company wants to “to create a culture of true inclusion. As part of our plan, we need to improve representation of women and people of color.” She also wrote, “While we’ve spoken about this many times, and tried different ways to achieve change, we have failed to gain traction—and our hiring and promotion decisions are not changing senior-level representation as quickly as we have wanted."

Of Nike's 74,000 employees, only 29% of vice presidents are women and, in the U.S., only 16% are nonwhite. In the memo, Matheson also reported that men, women, and people of color earn about the same, although she acknowledged, "We’ve also heard from some of you that this result does not reflect your personal experience" and promised to do more research into pay equity.

Discussion:

• How does the memo reflect both positively and negatively on Nike?
• Should Matheson have avoided putting such information in a memo, knowing that it could be made public? Or, do you think she intended for it to go public?
• How do executives balance internal communication and the possibility of messages being leaked to the press?
• In what ways does this situation demonstrate vulnerability?

NYT Learns from Failure

The New York Times admitted a mistake: the paper failed to write obituaries for some extraordinary women:

Since 1851, The New York Times has published thousands of obituaries: of heads of state, opera singers, the inventor of Stove Top stuffing and the namer of the Slinky. The vast majority chronicled the lives of men, mostly white ones; even in the last two years, just over one in five of our subjects were female.

The paper has begun a collection of obits for people "who left indelible marks but were nonetheless overlooked." Write-ups are available for 15 women, including Sylvia Plath, an accomplished poet who committed suicide; Margaret Abbott, the first woman to win an Olympics game; and Ida B. Wells, who fought racism and lynchings in the South in the 1890s.

Discussion: 

• How well does The New York Times address the failure? 
• Why are they writing these obituaries now? What are the arguments for the collection and against it?

United Backs Off of Bonus Plan

United announced moving to a lottery system for employee bonuses, but backlash caused management to rethink the plan. President Scott Kirby had distributed a memo describing the new process:

"As we look to continue improving, we took a step back and decided to replace the quarterly operational bonus and perfect attendance programs with an exciting new rewards program called 'core4 Score Rewards.' " 

The new program would include cash and other prizes and one quarterly prize of $100,000, which would be given to a random, eligible employee. Following the criticism, a spokesperson tried to clarify:

"We announced a new internal program based on United meeting certain operational and dependability metrics as a way of offering meaningful rewards to our employees. We believe that this new program will build excitement and a sense of accomplishment as we continue to set all-time operational records that result in an experience that our customers value."

Employee comments were harsh:

"Why should I be happy watching another employee get rewarded for my hard work? How would you feel if Oscar (United CEO Oscar Munoz) played roulette with your incentive package and it went to another vice president through a lottery drawing."

"This is truly disappointing. The current program 'costs' the company approximately $150 per 75,000 employees per quarter, totaling over $11 million. This new 'improved' program that we are supposed to be so excited about will cost the company $3.5 million per quarter. This saves the company about $8 million per quarter. Does Willis Tower really think the average front-line employee is stupid?"  

In a second memo three days later, Kirby announced a pause on the program, saying they would "consider the right way to move ahead" and "will be reaching out to work groups across the company, and the changes we make will better reflect your feedback."

Image source.

Discussion:

• What went wrong? Was it the bonus/lottery plan, the way it was announced, both, or something else?
• One employee commented, "Wow. I thought our morale was already as low as it could go, but I guess that was naive thinking on my part. I'm finally starting to understand that there will always be room for management to make me feel even less appreciated than I already do. How many times must they be taught, that if the employees aren't happy, no one is happy." What should the company leaders do now?
• The memos and employee comments were on an internal United system. What are the ethics of forwarding internal communications to the media?

President Trump Vs. Alec Baldwin

Alec Baldwin is a frequent imitator of President Trump on Saturday Night Live, and the President doesn't like it. In a Twitter feud for the world to see, the two are trading insults.

The President's response followed Alec Baldwin's interview with The Hollywood Reporter: 

How much longer with you play Trump on Saturday Night Live?

Every time I do it now, it's like agony. Agony. I can't. If things don't go in the right direction for the midterms. … I could go out on the street, stand on any corner and tap 10 people on the shoulder. And all 10 of them, in all likelihood, would be more qualified — ethically, morally, intellectually and spiritually — than Trump. I'll vote for Mitt Romney. I don't care. Anybody over this guy. It doesn't matter. We have to get rid of him. And that's another project I'm working on. I was the keynote speaker at the Democratic Dinner in Iowa, and I'm gonna go do a couple more of those this year. My wife and I agreed that we're gonna give it everything we have. And then if, God forbid, he wins again in 2020, I'm wondering can I host a game show in Spain.

Not to be outdone, Baldwin responded in a few tweets, including this one:

Image source.

Discussion:

• Should either or both of these men refrain from this type of argument on Twitter? Why or why not?
• We could say the President lacks humility, including the ability to laugh at himself. Do you agree with this statement, or do you believe Baldwin is out of line, or something else?

Travis Kalanick Gets a New Role

Travis Kalanick's dramatic fall from Uber has a potential happy ending. Kalanick has joined the board of health company startup Kareo, run by Dan Rodrigues. Kalanick was an angel investor in Kareo, and he and Rodrigues founded a music company in the late 1990s.

Rodrigues announced the appointment in an email to Kareo employees:

I’m very excited to have Travis join our board. He is one of the most successful entrepreneurs of our generation. He has not only scaled a high-growth company, but transformed an entire industry. Travis and I have a long-standing relationship that goes back more than 20 years. We were classmates at UCLA and co-founders at Scour, a peer-to- peer search engine company in the late 90’s. Travis made an early-stage investment in Kareo in 2009. He has been an enthusiastic believer in our vision since our inception and he is excited to work with us more directly to bring innovation to healthcare and help us reach our goals for market leadership.

This is Kalanick's first venture after being ousted from Uber and is encouraging for leaders who have experienced failure. He has been quiet on Twitter since January but tweeted the good news and highlighted his relationship with Rodrigues.

Discussion:

• What other examples do you know of fallen leaders getting a second chance? Will we see this for Harvey Weinstein?
• Assess the email to Kareo employees. What does the CEO want to accomplish? How well does the message meet these objectives?
• How much do you think the friendship between Kalanick and Rodrigues factors into his board assignment? Why would Rodrigues emphasize their relationship in his email?

Merck CEO Explains His Decision to Speak Out Against President Trump

Merck CEO Ken Frazier was the first to speak out after hearing President Trump's response to the violence in Charlottesville, VA. He left the President's American Manufacturing Council and started a trend for others to follow. In a recent New York Times interview, Frazier explains his decision:

“In that moment, the president’s response was one that I felt was not in concordance with my views. And I didn’t think they were in concordance with the views that we claim to hold as a country.”

“I wanted to say that this was a statement I was making in terms of my own values, and the company’s values, and there was unanimous support for that,” he said. “My board supported that 100 percent.”

In the interview, Frazier tells of another time he demonstrated courage—when he fought for the release of a man on death row.

Discussion:

• Explain what might be Frazier's decision process for leaving the council.
• Do you think he made the right decision? Why or why not?
• How does Frazier demonstrate courage?

Penn Removes Several Recognitions of Steve Wynn

For the first time in more than 100 years, the University of Pennsylvania has revoked an honorary degree. Following accusations of sexual misconduct against Steve Wynn, the trustees announced the revocation in addition to plans for removing Wynn's name from "Wynn Commons" and from a scholarship fund.

The message, sent by email and posted on the school's website, explained the decision and announced that an honorary degree for Bill Cosby also will be revoked. University leaders were careful to describe their decision process as well as the delay in revoking Cosby's degree. This is a good example of anticipating and addressing potential criticism.

Judging by comments on Twitter, reactions to the university's decision to take a stand seem to be neutral or positive.

Discussion:

• Did UPenn make the right decision? Why or why not?
• Analyze the message. What principles of business are followed, and how can the message be improved? Consider the audience analysis, organization, tone, and so on.
• How is this an example of courage? What risks does the university face?

Indiana University Is Next to Suspend Greek Life

Indiana University is following what is starting to be trend: suspending campus Greek life. University officials say activities are banned until at least the spring. The decision follows similar recent actions by Texas State University, Ohio State University, Ball State, and the University of Michigan after various charges of hazing, drug and alcohol abuse, and a death at Penn State.

Indiana's Interfraternity Council President wrote, "We are looking forward to working with our partners on campus as well as national headquarters and alumni to achieve our common goal of creating a sustainable environment for all our chapters to excel in future endeavors."

Indiana is trying to enforce its standards for fraternities and sororities, which is detailed in a "Agreement for Greek Organizations." The agreement focuses on providing and maintaining a safe environment, including not participating in hazing and controlling events where alcohol is served.

Discussion:

• What effect do you think these suspensions will have on Greek life?
• What actions, if any, has your university taken? What do you think should happen?
• I can't find a statement from Indiana University. Should the administration issue one?

Sweetery's Harsh Response to a Bride

When a prospective customer decides not to pursue a contract, what's the best reaction? Certainly not how Sweetery responded, with a long, insulting email. Amanda De Pascale says she was considering offering the company's food truck to her wedding guests as a fun addition, but the $2500 quote was more than she wanted to spend. After she told the company her decision, she said she received multiple phone calls from them and then this email. She posted screenshots on her Facebook page.

You may want to skip some parts.

Amanda -

We have zero idea what type of warped sick games you are playing with us, but now it is time for us to have a say.

You are a despicable bottom feeding wretched disgrace of a person, who is as disgusting as they come.

How many times have we called you to follow up on the proposal that we expanded time and effort to produce based on your request and each and every time you cowardly hang up the phone on us when we identify who is calling, what an absolute low life twisted miserable individual you have to be [sic].

We also send you multiple emails that you don't have the decency to respond to, who do you think you are, because we are here to tell you that you are a weak, meager [sic] spineless empty sack low life piece of trash.

We work very hard to do right by client [sic] both existing and perspective and although rarely do we come across a pile of dog ____ like you, it is cowards like you that are not worth the gas that we pass. If you were not interested in our services that [sic] open your mousy measly trap and say so, but no not you, you would prefer to hang up on us countless time [sic] pretending that you cannot hear us to which we would normally say get a new phone but it is clear that you should get a life.

You are despicable and that is probably on your best day, on your worst day you are a complete waste of humanity, I know dogs when they lift their legs that have better manners than you do.

What kind of trash would ask a company to do work for them and then not have the decency and respect, or the respect for their own self, not to at the very least say. . . .

At right is a screenshot of the last part of his message.

At first, Sweetery's owner, whose name is listed on the bottom of the screenshots, Grant DiMille, told Fox News, "Yes, it came from a company computer, but it was not sent by myself or any member of management. It's a terrible offense, yes, but everyone makes mistakes."

Later, DiMille said he fired the employee who wrote the message, and he sent an apology to De Pascale: "It does deeply matter to us that you were offended by what was written to you. I know it will be difficult for you to believe this but our company's culture is not like what your experience has been, yet the experience that you encountered did happen."

Discussion:

• We hear only one side of the first part of the story. What, if any, justification could Sweetery have for the strong response?
• How well did DiMille respond? What could explain his name on the screenshots?
• How is this story a lesson in humility?

Voice Program Makes for a Funny Comment

A comment posted on The New York Times website turned out to be gibberish. The replies were almost as funny as the post. People referred to political parties and Waiting for Godot. One reader understood what happened: a voice-to-text program interrupted the writer.

In response, Christine explained that someone came to her door in the middle of her writing the post. She didn't turn off the program, so whatever she said got translated and posted for all to read. As she describes,

"I was composing a message using the autospeak, and a friend arrived early to my house," she wrote in a reply further down the thread. "I had no idea all that drivel was being recorded - there are even errors in the drivel! And then to be a pick, with about 15 emails announcing such, meant that my email went rogue."

Discussion:

• How have you used voice-to-text programs? What are the benefits?
• This examples gives us one obvious downside of using transcription services. What are some others?

President Trump's Call to a Widow

The media has covered a phone call between President Trump and Myeshia Johnson, whose husband, La David, was a soldier killed in Niger. In an interview on Good Morning America with George Stephanopoulos, Johnson describes what the president said on speakerphone in her car:

"The president said that he knew what he signed up for, but it hurts anyways. It made me cry because I was very angry at the tone of his voice and how he said it. He couldn't remember my husband's name… I heard him stumbling on trying to remember my husband's name, and that's what hurt me the most."

President Trump replied to the controversy in a tweet: 

White House Chief of Staff John Kelly, who lost a son in Afghanistan, said the president had asked him, "What do I say?" when he was preparing to call four families. Kelly defended the president:

"In his way, [he] tried to express that opinion -- that (Johnson) is a brave man, a fallen hero. He knew what he was getting himself into because he enlisted. There's no reason to enlist, he enlisted. And he was where he wanted to be with exactly the people he wanted to be with when his life was taken. That was the message. That was the message that was transmitted."

Offering sympathy, as we discuss in Chapter 6 of the book, is never easy. Perhaps President Trump could have shown some vulnerability-a natural hesitation or discomfort in offering compassion.

Image source.

Discussion:

• Because we don't have a recording of the interaction, it's hard for us to judge what happened. In addition, an important missing element is tone. How do you think that might have affected how the message was received?
• Other than the phone call itself, how could President Trump have handled this situation differently?

WeWork's New Space and Missing Voice

As a sign of the times, WeWork has purchased Lord & Taylor's flagship store in New York City. WeWork leases office space to small companies and will rent some space back from the retailer, which will continue to operate out of most floors.

Although the news is good for WeWork, I can't find a press statement, blog post, or tweet from the company. On Twitter, they did retweet the New York Times article, but I'm not sure why they don't announce the news themselves.

WeWork co-founder and CEO Adam Neumann was quoted in the New York Times article:

"Retail is changing, and the role that real estate has to play in the way that we shop today must change with it," Mr. Neumann said in a statement. "The opportunity to develop this partnership with H.B.C. to explore this trend was too good to pass up."

I'll post again when/if I see an update from the company.

Discussion:

• Why do you think WeWork hasn't posted its own announcement?
• What could WeWork say in an announcement? I think the company is missing an opportunity. Do you agree or not?

Some Good News, But a Terrible Graphic

George Soros has given $18 billion to The Open Society Foundations, his grant-giving organizations. A spokesperson for the group said the transfer "reflects an ongoing process of asset transfer that has been underway for several years." She also said that Soros, "plans to leave the vast majority of his wealth to the Open Society foundations." His fortune is estimated at more than $26 billion.

The 87-year-old Hungarian has been criticized for aiding refugees and influencing local politics. On the website, The Open Society Foundations identify the mission and vision, including this first statement:

The Open Society Foundations work to build vibrant and tolerant societies whose governments are accountable and open to the participation of all people.

The website also shows this graphic for expenditures.

Discussion:

• Should the organization say more about the money transfer? I don't see a statement on the website. Why do you think the spokesperson didn't provide a more extensive statement?
• I say the chart is "terrible." Do you agree? Why or why not? Which principles of visual communication are followed, and which are lacking?