Tuning in to Trust & Ethics: Starbucks and Howard Schultz (Boehme quoted)

Tuning in to Trust & Ethics: Starbucks and Howard Schultz

Barbara Brooks Kimmel – Trust Across America – April 28, 2016

Starbucks CEO

In Capitalism and Freedom (1962) the late American economist Milton Friedman wrote:

There is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.

During the 50+ years following the book’s publication the meaning of Friedman’s quote has been debated in C-Suites around the world, particularly the “rules of the game.” The widely held interpretation is one of a status quo; as long as it’s legal the corporation has fulfilled its role in society. Hence, with Friedman’s legacy in mind, the majority of leaders and their boards tend to focus on regulatory compliance as the “golden rule” and push the “soft stuff” like culture, trust, employee engagement and community off to the side, or perhaps to a functional silo that then creates a “program” or a philanthropic PR campaign.

There is a small and growing cadre of CEOs who are simply no longer accepting Friedman’s theory as gospel.

One of them is Howard Schultz, CEO of Starbucks. This past January, Schultz was the first CEO to be honored with a Lifetime Achievement Award by Trust Across America. And just recently in his annual address to shareholders, Howard asked his audience to consider two questions:

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