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The CEO as The Chief Executive—A Reality Check

Now, it’s the expectation of consumers, clients, and employees alike that CEOs and, by extension, the companies they lead, will take principled positions on contentious issues. And if that CEO decides to wade into the political arena, plenty of pitfalls loom ahead.

Now, it’s the expectation of consumers, clients, and employees alike that CEOs and, by extension, the companies they lead, will take principled positions on contentious issues. And if that CEO decides to wade into the political arena, plenty of pitfalls loom ahead.

Businesses taking the lead to fill a policy vacuum created by dysfunctional government will be a familiar theme to readers of this weekly series. It’s one of the major trending developments in civic society today, as increasing numbers of business leaders are speaking out on key issues such as immigration, gender equity, gun control, and climate change.

Today, the concept of Brands Taking Stands—led by the CEO as activist—is a common practice. It’s a radical change to a combination of private sector and public policy leadership roles, which was once discouraged. Now, it’s an expectation of consumers, clients, and employees alike that CEOs and, by extension, the companies they lead, will take principled positions on contentious issues.

To pick one of my favorite examples, the PwC sponsored CEO Action for Diversity & Inclusion has recently signed up over 500 chief executives, who have committed their companies to advance D&I in the workplace through the largest CEO-driven initiative to support progress on racial, ethnic, and gender issues.

Now, the action has ratcheted up to another level with a proposed presidential candidacy by a chief executive known for his business acumen and his penchant for taking public positions on key social issues. The idea seems to be that a truly successful businessman or businesswoman with a history of policy positions could be a better federal chief executive than the current occupant of that office.

I’m talking about the announcement by Howard Schultz, founder and former CEO of Starbucks, that he is considering a presidential bid by gauging voter interest while on a promotional book tour. However his effort plays out, Schultz’s proposed bid for the presidency will be a classic case study in the idea of a demonstrably competent CEO putting forth his experience, skills, and corporate vision as a viable option for the highest public office.

As the founder of a 48 year-old multinational with 28,000 stores, 350,000 employees, gross revenue of $22 billion, and an iconic brand identity, Schultz can rightly claim his legacy as a historically significant figure in American business. He can also assert “authenticity” for his long history of taking stands as Starbucks CEO. Schultz has been noted for his positions on immigration (promising to hire 10,000 refugees), racial issues, and gay marriage. Proclaiming values is not a new occupation for this executive, and he touts that authenticity in his latest book, From the Ground Up: A Journey to Reimagine the Promise of America. Intertwined with his personal biography is a “parallel story” that offers a look at Schultz’s “unconventional efforts to challenge old notions about the role of business in society. From health insurance and free college tuition for part-time baristas to controversial initiatives about race and refugees, Schultz and his team tackled societal issues with the same creativity and rigor they applied to changing how the world consumes coffee.”

Back in 2015, Shultz, a strong supporter of Hillary Clinton, sent a memo to her campaign management about her lack of “brand credibility,” complaining that her effort was “too packaged and prescribed. The American people are longing for truth and someone to believe in,” he suggested.

Back then, Schultz added that he is “not a politician” but a citizen who believes the country has a “dire need for authentic leadership.” Apparently, Schultz now believes that he could supply the “authenticity” that will convince voters to propel him to the presidency in 2020.

But in an unanticipated blowback, Schultz, a longtime Democratic supporter, has been roundly criticized for positioning himself as an independent centrist who would draw votes away from a Democratic candidate and therefore help the chances of President Trump winning re-election. He has also received considerable pushback for his skepticism about a “wealth tax” and single-payer health care, common platform points among the currently announced Democratic candidates. The sound bite of a heckler shouting “billionaire” as an epithet has played relentlessly on cable news.

Schultz is reportedly “shocked” by the intense nature of the criticism. A dive into the history of former CEO presidential candidates might have braced him for some of the negative feedback (c.f. Mitt Romney and Carly Fiorina for examples).

How has the company been affected by the negative publicity? Starbucks has been explicit in separating the company from its founder’s proposed candidacy. In a letter to employees, current CEO Kevin Johnson said

“Starbucks does not get involved in national political campaigns. As we have for 48 years, we respect and celebrate the diverse views of our 350,000 partners working at Starbucks and our millions of customers.”

In the same letter, Johnson re-stated the company’s admirable, ambitious core Mission and Values:

“We believe in the pursuit of doing good:

  • We will continue to drive initiatives that promote equality, inclusion and opportunities for our partners.
  • We will continue to support bringing people together in service and working to address complex problems in our communities.
  • And we will continue to make sustainability a priority as we have for more than 30 years, from ethically and sustainably sourcing coffee to building greener stores.”

Starbucks has nonetheless been the target of political pushback, reports the Associated Press. “Conservatives have slammed the company for matching employees' donations to Planned Parenthood. Liberals are taking aim as well. Neera Tanden, the president of the left-leaning Center for American Progress, tweeted that she will organize a boycott against Starbucks if Schultz runs.”

A final footnote: perhaps the most stinging judgement aimed at Schultz came when he was criticized for proposing to run as an independent and a centrist on the issues by Michael Bloomberg. Though Bloomberg is another billionaire businessman, he has the added credibility of having served as mayor for New York City for three terms.It is widely expected that Bloomberg will put forth his own candidacy for president on the Democratic ticket.

Watch for this mini-trend of CEOs running for the ultimate chief executive position to make the already unpredictable 2020 presidential election even more unprecedented.

Previously posted on the weekly Brands Taking Stands newsletter -  be sure to subscribe!

Image credit: Leon Kaye