The boldest headline I’ve read in awhile shook my core.
Starbucks Fined $2.8 Billion
It’s yesterday’s news, literally; but its impact will be felt by you and me. If Starbucks doesn’t appeal the arbitrator’s judgment in its three-year battle against Kraft for trying to end a failed partnership, then the price of that $5 pumpkin spice latte will increase to $5.75.
You will pay for Starbuck’s business decision gone awry.
In the Wall Street Journal Nov. 13, 2013, the story includes a quote from a statement by Starbucks CFO Troy Alstead, “We believe Kraft did not deliver on its responsibilities to our brand under the agreement; the performance of the business suffered as a result.”
How can someone put a price tag on “performance of a brand?”
This figure is mindboggling.
With $2.8 billion dollars:
• The U.S. national debt could remove a sizeable chunk
• Every person in China would get about $2.50 (there’s something like 1 billion people in China)
• 28,000 college students could get $100,000 each to attend university
• The debt of cities like Chicago and Detroit could be wiped out
• And, on and on and on
With the current crises we’re seeing each day in the economies of the world, within P&L sheets of companies, in municipalities and how they’re run and function, in the debt acquired by young people interested in a better path after college, in the homes and families of everyone in the world, do you think that arbitrator could’ve required Starbucks to donate $1 billion to charitable causes in an endowment fund?
Further in the article, it states:
Starbucks declined to comment on a possible appeal, saying it is still reviewing the decision, but said it has adequate liquidity in the form of cash and available borrowing capacity to make the payment…
Blows your mind, doesn’t it? Starbucks posted $14.9 billion in revenue for fiscal year ending Sept. 29, and it reported $2.6 billion in cash and cash equivalents, according to the Wall Street Journal.
Starbucks Mission Statement
Perhaps the more mature I become in age and my professional standing within my profession, I have begun to view business from a lighter perspective.
The very center and core of a business contributes to its culture, its values, mission, and vision. Take a look at the Starbucks mission statement:
Our mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.
Here are the principles of how we live that every day:
It has always been, and will always be, about quality. We’re passionate about ethically sourcing the finest coffee beans, roasting them with great care, and improving the lives of people who grow them. We care deeply about all of this; our work is never done.
We’re called partners, because it’s not just a job, it’s our passion. Together, we embrace diversity to create a place where each of us can be ourselves. We always treat each other with respect and dignity. And we hold each other to that standard.
When we are fully engaged, we connect with, laugh with, and uplift the lives of our customers – even if just for a few moments. Sure, it starts with the promise of a perfectly made beverage, but our work goes far beyond that. It’s really about human connection.
When our customers feel this sense of belonging, our stores become a haven, a break from the worries outside, a place where you can meet with friends. It’s about enjoyment at the speed of life – sometimes slow and savored, sometimes faster. Always full of humanity.
Every store is part of a community, and we take our responsibility to be good neighbors seriously. We want to be invited in wherever we do business. We can be a force for positive action – bringing together our partners, customers, and the community to contribute every day. Now we see that our responsibility – and our potential for good – is even larger. The world is looking to Starbucks to set the new standard, yet again. We will lead.
We know that as we deliver in each of these areas, we enjoy the kind of success that rewards our shareholders. We are fully accountable to get each of these elements right so that Starbucks – and everyone it touches – can endure and thrive.
Reaction to Starbucks Mission Statement
I read this three times; I’m seeking what’s missing from what I did see:
• Starbucks will be in the lead to set new standards (yet again), and it will be a good neighbor.
• Coffee is its business, period. And it is committed to coffee.
• Partnerships and customers are treated with respect; yet, again, it’s about work.
Nowhere in this mission do I see a commitment to giving back to nurture a community beyond being a good neighbor with its stores and to uplift the customer, which I know it does extremely well. The mission statement says it sees the potential for good, and it will be a leader (again) to set the standard for that.
Feelings from Mission Statements
I don’t know about you, but what is your reaction to the words in Starbucks’ Mission Statement? Does it leave you with a warm and fuzzy feeling about this global corporation interested in nurturing, giving back, contributing and helping solve the problems of the communities in which its stores reside?
Do you get a teensy bit of arrogance from some of the word choices that fail, IMHO, to move me.
Let’s ponder this — $2.8 billion.
Kraft and Mondelez will split that. In fact, the two corporations are already sharing, in yesterday’s article, how they will spend that money. Mondelez International will buy back shares, while Kraft indicated the “arbitration’s outcome will not have material financial impact on Kraft.”
Who is responsible, accountable and interested in where the world needs to go to become a better place for our children?
Is money or love the answer? When you stand in line at your neighborhood Starbucks to spend $5 on a fat-filled dreamy drink, ponder $2.8 billion; that’s all.