Lessons in politics from Starbucks: sign of the times or storm in a coffee cup?

Drip, latte, cappuccino, espresso, frappuccino; short, tall, grande, venti, trenta. Starbucks, the international coffee chain is great at giving choice in getting our daily dose of java. But what about campaign contributions or no contributions? Doesn't exactly roll off the tongue in the same way, but that is the stark choice that Starbucks CEO Howard Schultz is now offering US politicians in the face of the country's ongoing debt crisis. For the past few weeks Schultz has been seeking to build a coalition of US business leaders ready to join him in withholding campaign contributions from Washington until the main political parties start working together and agree a debt deal to turn around the beleaguered economy.

In the last few days Schultz has stepped up the campaign with full-page ads in the US press, including the New York Times, taking the form of an open letter on Starbucks headed paper to his "fellow citizens" to join him in "restoring hope in the American Dream" by sending "the message to today's elected officials in a civil, respectful voice they hear and understand, that the time to put citizenship ahead of partisanship is now".

It's quite a remarkable campaign. Schultz has the support of more than a hundred business leaders joining his pledge. Among those listed as "key supporters" on the campaign website are the CEOs of AOL, BBDO, NYSE, NASDAQ, Wholefoods Market and Zipcar. It is not such a significant coalition yet to cause the main political parties any real loss of sleep - compared with major contributors, most of these individuals and companies are not heavily involved in funding political parties. But for a business leader like Schultz to come out and so explicitly take a stand that effectively seeks to hold his domestic politicians to ransom until they do his bidding represents a fairly unique twist on the growing involvement of business in politics and the claim by corporations to be "good citizens".

In one sense, Schultz should be applauded for seeking to use his own and his company's economic muscle to try and achieve what he sees as a greater public good. Management guru, Rosabeth Moss Kanter, for instance has come out in favor of his "courage and leadership" in attempting to restore confidence. Even the more cynical corporate critics will find it difficult to see a clear-cut corporate self-interest at stake here. Sure it could help reinforce the famous Starbucks brand but at the same time its also going to annoy a lot of people too, especially those in Washington who are being labelled by Schultz and his CEO friends as having a "pervasive failure of leadership".

On the other hand, though, we might also question what's really going on here when we have a company CEO leveraging his company brand in such a way to make a political rather than an economic point, and at the same time claiming to be a "fellow citizen" with the rest of us (who can hardly afford to take out full page ads in the New York Times to present our own views on the current political logjam). This is not just Schultz the individual citizen speaking here but Schultz the corporate CEO and representative of Starbucks. But then, if (and it is a big "if") we accept corporations as political actors, then at least this example represents a fairly good case of building coalitions, providing an arena for free and fair deliberation, and moving beyond mere corporate self-interest.

To our mind the whole situation presents a really interesting insight into the emerging political role of the corporation and the difficult decisions that have to be made when business leaders start increasing their involvement in public debates. According to a McKinsey survey, "almost half of US executives believe they and their peers should play a leadership role in publicly shaping debate and in efforts to address sociopolitical issues such as education, health care, and foreign policy ... yet only one-seventh of survey respondents consider themselves to be playing that role now". Schultz's efforts to restore economic confidence by taking a step into politics gives us a taste of what might happen when these executives really start doing so. We still have a choice about whether and how those steps should be taken.

Photo by Nick Humphries. Reproduced under Creative Commons Licence.

Rethinking the division of labour between business and government

We liked this interview with Richard Haass in the McKinsey Quarterly where he talks about the implications of the new division of labour between and government. As he says, "the lines between what is government and what is the private sector of business will get blurred.... CEOs, when they get up in the morning and look out through their window or across their desk, they are dealing with a range of constituencies that looks an awful lot like what a cabinet member might look at." The basic ideas align pretty much with our own work on corporate citizenship and global governance, but seeing them getting such prominence from McKinsey shows just how much the whole agenda is starting to be taken seriously by the business community.

We were particularly interested in his thoughts on how companies should adapt to this 'new normal', as McKinsey likes to put it. Haass promotes a new way of thinking about business-government relations - an expanded perspective that not only thinks in terms of lobbying and political action committees, but about what the changing division of labour means for the company as a whole. As he says, we need to, "think about government and government-related issues not as something that you have a small side office [for], some vice president for government relations who maybe calls a congressional staffer when he’s got an issue. But it’s something now much more intrinsic, and every person in the company—certainly the upper echelon of leadership—needs to take this into account, needs to think very hard about what is the proper, desirable role of government for that company. ... the entire issue of government, and the division of labor between the company and government, needs to be something that is thought through from the outset."

Haass is short on specifics in the interview, but it certainly sends a clear message that we need to go further in working through what the expanded set of political responsibilities might look like. And it definitely crashes a rather large plank over the heads of most of our colleagues doing research on corporate political action who seem to simply be blind to the bigger picture of what's happening around business and politics. Dirk's article reviewing recent books by Robert Reich and Naomi Klein explains a little more where we think some of the problems are in this respect. If even the McKinsey Quarterly is getting it, surely our fellow management researchers won't be too far behind. We live in hope.