In the wake of a racially-charged public outcry over the arrest of 2 black men at a Philadelphia store, Starbucks Corporation (NASDAQ:SBUX) closed every one of its U.S. locations early for a company-wide anti-bias training day. The move has been applauded by some and criticized by others, but it’s shareholders who are wondering whether the training was worth the estimated $16.7 million in lost sales. 

Executive Chairman Howard Schultz has stood by the move saying it was a necessary investment in the company culture and long-term success. However, this isn’t the first time SBUX has taken stand on racial tensions in the U.S. — and those who remember the company’s “Race Together” campaign are skeptical about the training day on May 29th. 

Will It Be a Flop?

Back in 2015, Starbucks launched a campaign aimed at assuaging racial tension in the U.S. The firm ran ads asking, “Shall we overcome?” and encouraged baristas to write “Race Together” on customers’ cups. The firm said it was hoping to help bring people together an ease building tension over racial inequality, but many saw it as a publicity stunt gone wrong. The campaign was criticized all over social media as people accused Starbucks Corporation of inserting itself into a sensitive issue, which caused management to abruptly pull back. 

The anti-bias training has similarly become a hot-topic on social media, but not in the same negative way that the “Race Together” campaign did. On one hand, there were quite a few people complaining about missing out on their caffeine fix during the 4 hours the company shut its doors, but there was also an overwhelmingly positive response to the training as well.

Starbucks employees had glowing reviews of the training as well. A Regional Director in the New York-Metro region, Carla Ruffin said the training was, “really profound” and documents and videos from the session have also been positively received. Overall, it looks like the anti-bias training day was as successful as possible considering what a complex topic the company was tackling in just a few hours.

Why Was It Different?

Perhaps this training day, which has garnered a great deal of attention for Starbucks Corporation has been more successful than the company’s efforts to tackle social issues in the past because it came as a direct response to a racially charged incident.

Unlike the “Race Together” campaign, Starbucks’ anti-bias training was carried out in order to improve the way the firm’s employees handle racial bias. The day was triggered by the April 12th arrests in Philadelphia, something management said was not a reflection of the company’s culture. It felt less like a publicity stunt and more like a problem solving measure, so the public was far more receptive.

Of course, one 4-hour training session won’t be enough to solve a problem created over decades, but it’s a start.

Was It Worth the Loss?

The big question on investors’ minds was whether or not it was necessary for Starbucks to shutdown more than 8,000 locations and miss out on millions worth of sales just to make a statement to employees and customers about its corporate culture. So far, it looks like the answer to that question is yes.

While it was a costly measure, it was a necessary one. The training gave Starbucks a chance to bring employees together and help them navigate difficult situations in an open and respectful way, but more importantly from a business perspective it painted SBUX as a socially responsible company.

As it’s grown from a small coffee shop in Seattle to a brand recognized around the world, Starbucks has garnered a diverse customer base, and the incident in Philadelphia stood to ostracize a huge proportion of its potential market. The training underscored that Starbucks management wants its locations to be inclusive and welcoming to everyone and that can only be a good thing if the firm wants to continue expanding.

Starbucks’ management has also been open about the training’s shortcomings. Unlike the “Race Together” campaign, which simply asked people to talk about racial inequality but didn’t provide any talking points or future roadmap, the anti-bias training was acknowledged as a jumping off point for a regular training opportunity. Starbucks employees will be asked to discuss related topics at monthly training meetings and new hires will see the anti-bias training during their on=boarding process. 

The Bottom Line for Starbucks Anti-Bias Training

In today’s world it’s difficult for a big name company to take a stand on a social issue and come out on top. Starbucks has never shied away from controversy and the firm’s management appears to be comfortable speaking out despite the risk of backlash.

In this case, I think SBUX made the right move and although there was a substantial sales loss in the short term, the longer term benefits outweigh those costs. 

As of this writing Laura Hoy was long SBUX.