Richard Quest: Companies should follow Starbucks' example

CNNMoney's Richard Quest explains why Starbucks CEO Kevin Johnson's actions after two men were arrested in a Starbucks show companies like Facebook and Equifax how to handle a crisis.

Posted: Apr 20, 2018 9:36 AM
Updated: Apr 20, 2018 9:38 AM

Quest's Profitable Moment

Two black men were arrested at a Philadelphia Starbucks for doing absolutely nothing. A photograph of the incident was seen around the world.

It was a potential disaster for Starbucks. Recognizing that, CEO Kevin Johnson immediately came out and announced that Starbucks was going to put it right.

He said the store manager had been wrong to call the police. It was wrong to have the men arrested. The only ones not in the wrong were the two men waiting inside the Starbucks.

Not only did Johnson apologize, but he announced that 175,000 Starbucks employees in the United States would undergo unconscious bias training.

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You could say it was a textbook example of how to handle a PR disaster. But it's deeper than that for Starbucks.

If you look at the company's values and mission statements, the CEO was simply practicing what Starbucks preaches.

In trying to put things right, Johnson was making sure the company was living up to its principles.

This is a lesson for every other CEO out there: Don't head for the hills at the first sign of disaster like Facebook and Equifax. Take a sip from Starbucks' cup and face it head-on.

Do what's right. Your investors and your customers will thank you for it.

Big banks are minting money

President Trump has been very kind to America's biggest banks. His corporate tax cut has fueled blockbuster profits. And the recent market mayhem, which Trump played a role in, was good for banks, too. Morgan Stanley and Bank of America reported record earnings this week. And JPMorgan hauled in the biggest quarterly profit by a US bank. Ever. Yet the mega profits haven't impressed shareholders much. They know markets won't be volatile forever. And tax rates won't keep shrinking. The underlying business — lending money — will need to accelerate for banks to sustain the success. — Matt Egan

'Fearless Girl' is moving

The fate of the "Fearless Girl" statue is finally resolved: After spending more than a year staring up at the iconic "Charging Bull," the bronze statue will move to face the New York Stock Exchange by the end of the year. It's not a big change — right now, both "Fearless Girl" and the "Charging Bull" are in a small park a few blocks from Wall Street and the NYSE. But the relocation means that the statue, which has become a beloved symbol of empowerment and the push for gender equality, is ensured a long-term home in Manhattan's financial district. The bull might move, too, though the city hasn't said when or where. — Danielle Wiener-Bronner

Weak dollar is good for big US companies

Trump accused China of playing a currency devaluation game — days after the Treasury Department failed to call out China for currency manipulation. The dollar has lost ground versus the yuan and other currencies this year. That's great for blue chips like Oracle, FedEx and Nike. A weaker dollar makes their products less expensive overseas and lifts the value of international sales once they are translated back into dollars. But how much longer will the greenback stay in the doldrums? More Fed rate hikes should boost the dollar. Trump even said in January the dollar will get "stronger and stronger." — Paul R. La Monica

'Black Panther' comes to Saudi Arabia

Saudi Arabia ended a decades-long ban on movie theaters with a screening of Disney's "Black Panther" this week. The opening of the AMC theater in the Saudi capital of Riyadh is part of an economic overhaul that the kingdom hopes will spur growth and diversification, and reduce its economic dependence on oil. More theaters are expected: Both AMC and Vue International plan to open dozens of cinemas in the coming years. — Jill Disis

Quick takes

St. Louis Fed President James Bullard told Quest on Wednesday he worries that the flattening yield curve means a recession is on its way. Meanwhile, Trump picked a vice chairman and a Fed governor to fill two more empty seats on the Federal Reserve Board.

China introduced a huge import charge on US shipments of sorghum, a grain that is used to feed livestock and make a liquor that's very popular with Chinese drinkers.

Toys "R" Us rejected a $675 million bid for 200 of its remaining 735 US stores. Isaac Larian, the billionaire toymaker behind Bratz dolls and Little Tikes, said he'd keep fighting to buy Toys "R" Us.

Netflix added 7.4 million subscribers in the first three months of 2018, the vast majority of them outside the United States. Netflix now has 125 million subscribers.

Amazon has more than 100 million Amazon Prime subscribers around the world, Jeff Bezos told shareholders in an annual letter. And Amazon is expanding its footprint in physical stores, partnering with Best Buy to sell smart TVs.

What's next

GE's financial report: General Electric will report its first-quarter financial results on Friday, and will hold its annual shareholders meeting on Wednesday. GE faces a mountain of problems, including a ton of debt, a pile of legal troubles, the biggest pension shortfall in the S&P 500 and a cash crunch caused by decades of bad decisions. GE shares are down 20% this year.

Facebook faces investors: Facebook will report earnings on Wednesday, facing Wall Street analysts for the first time since its data privacy scandal erupted in March. CEO Mark Zuckerberg survived his testimony before Congress earlier this month, but analysts could ask tough questions about how Facebook plans to restore customers' trust without angering advertisers.

Indiana Coronavirus Cases

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Confirmed Cases: 36096

Reported Deaths: 2231
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Hamilton118394
Johnson1121112
Madison59961
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Monroe17012
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Brown331
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Parke180
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Ohio130
Warren121
Vermillion100
Union90
Pike60
Unassigned0179

Ohio Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 37282

Reported Deaths: 2340
CountyConfirmedDeaths
Franklin6216293
Cuyahoga4732259
Hamilton2767167
Marion268631
Lucas2313263
Pickaway209638
Summit1505181
Mahoning1466191
Butler94832
Columbiana89152
Stark782101
Lorain72260
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Belmont44715
Warren39821
Medina37625
Tuscarawas3674
Miami36630
Delaware35514
Ashtabula34738
Portage33357
Lake32012
Fairfield3148
Clark3137
Wood30449
Geauga30034
Wayne29351
Licking26710
Mercer2238
Allen21933
Clermont2185
Richland2164
Darke18923
Erie18516
Madison1637
Washington11819
Crawford1184
Morrow1081
Greene1055
Ottawa10417
Putnam9514
Sandusky8512
Monroe8015
Auglaize773
Ross732
Hardin710
Hocking705
Jefferson672
Huron611
Williams561
Union551
Muskingum541
Holmes543
Hancock531
Wyandot482
Shelby463
Fulton450
Coshocton450
Clinton451
Logan430
Fayette410
Preble391
Guernsey382
Defiance342
Carroll343
Lawrence311
Brown301
Champaign281
Seneca262
Highland261
Knox251
Vinton212
Ashland210
Perry191
Athens181
Henry170
Scioto170
Jackson140
Paulding140
Adams111
Harrison100
Pike90
Gallia81
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Morgan50
Unassigned00
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