WeWork & Starbucks Agree: Father Knows Best
Arrogance Has Founders Seeing Red (Cups, Meat, and Eyes)
By Ed Lynes
Of the icons that mark the holiday season, few are more celebrated than the Starbucks Red Cup. Communities count down the daysto their arrival, and their presence is so ubiquitous in crowded shopping areas that they take on a talismanic quality. The first day red cups are in stores signals the beginning of the holiday season — and commences America’s annual debate on the role of Christmas in secular society.
Starbucks is known as much for their mediocre coffeeas it is for the unabashedly – and publicly – liberal views of long-time (former) CEO cum celebrity Howard Schultz. Schultz has made a practice of imposing his personal beliefs onto the company — he may believe his views are in the right, but data indicate customers are not terribly excited about connecting coffee with cause. His co-opting of Starbucks as a platform for his own opinion means that the release of each year’s holiday cup is more than a statement on aesthetics: it’s to be parsed as a salvo in the ongoing “war” against Christmas. Schultz may value the red cup as a symbol of belonging to his blue tribe, but should agreement with his opinions on the treatment of refugeesbe a prerequisite to enjoying a latte?
The apotheosis of the founder-CEO with a cult-like personalityhas done more than create a lack of accountability in boardrooms. It’s emboldened those leaders with a “father knows best” mentality that makes them comfortable subverting the personality and culture of the company to their own personal ego, and reveals an arrogance with ruinous long-term consequence for the relationship between companies and their customers.
Founders own a business’s inception, but the future belongs to their customers.
Companies signing a big deal with WeWork shouldn’t expect to celebrate over the traditional post-sale steak dinner. In July 2018, the company made a decision to go entirely meat-free: no meat at corporate events, and also no reimbursement to sales teams or employees for meals that include meat. WeWork co-founder Miguel McKelvy sees no problem imposing his own valueson his employees and customers: “Companies have greater responsibility to their team members and to the world these days. We’re the ones with the power. Large employers are the ones that can move the needle on issues.”
WeWork has a well-defined brand story: When we started WeWork in 2010, we wanted to build more than beautiful, shared office spaces. We wanted to build a community. A place you join as an individual, ‘me’, but where you become part of a greater ‘we’. A place where we’re redefining success measured by personal fulfillment, not just the bottom line. Community is our catalyst. That story is supported by clear organizational values: Inspired, Authentic, Grateful, Entrepreneurial, Tenacious, and Together. The company as an entity is clear in their focus on the customer, the customer’s experience, and promise of community and togetherness at WeWork.
So, where does the meat-free commitment come into play? It doesn’t. WeWork’s draconian, ideological crusadeis purely about advancing the agenda of their founders. McKelvy recognizes his company’s success has given him a powerful platform, and rather than using it to reinforce the organization’s story, he’s coopting the power bestowed upon him by WeWork’s customer base. A company committed to the value of community willing to impose a lifestyle embraced by less than five percent of the global populationis completely at odds with their values, but perfect for a “reducetarian.”
WeWork is an enterprise worth $20 billion. The idea that the founders would so willingly subvert the customers that drove them to that valuation is alarming. According to at least one customer, they should be worried less about dictating the consumption of red meat, and instead listening more — lest they drown in a sea of red ink.
The leadership at WeWork and Starbucks miss a crucial point: their brands do not belong to them, or even the investors that capitalize them. Brands are owned by their customers. The customers’ willingness to continue investing in the relationship, embracing the brand’s values as their own, and supporting that through commerce is what makes a company viable. Corporate leadership are stewards of the brand, not kings who rule by fiat.
It seems obvious to state that customers should be the central hero of a brand’s story. Woden has written at length about this relationship, and how companies need to be appropriately positioned as the mentor and guide for their customer. Too often, this philosophical ideal comes crashing headlong into the personality of a founder — already strong-willed by necessity, but often inflated to arrogance when they realize success.
Fundamentally, though, building a brand that mattersbegins with a clear understanding of purpose, and finding a way to position that customers can get excited about, and crafting a personality that reflects the audience the company is serving. There’s little room for ego in the process: it’s about the world the company wants to actualize, but more importantly, it’s about the laser-focused way they must accomplish that, and how they’ll win the loyalty of their customers to do so.
Customer-driven brands are an exercise in humility, and that starts with the founder. Embracing the customer as the hero of the story means surrendering a degree of control, and even more challenging for some, the limelight. It also means recognizing that the founder must embrace the values of the company and their community, not vice versa.
Few founders struggle with arrogance like Elon Musk. Musk embraces a comic book founder persona, and his 2018 challenges show that a founder’s personality doesn’t need to be cause-driven to be disruptive. You can also just be a jackass.
While Musk probably thought it was hilarious to light up a jointon Joe Rogan’s podcast, it’s likely his customers would have preferred he spend his time focusing on meeting his grandiose promises to them. Production deadlines for Teslas keep slipping, delivery dates continue to retard, and despite all the anxiety on Wall Street, the real story is being told by customers: 23 percent who were waiting for a Model 3said “forget it,” and went elsewhere.
In a vacuum, maybe his hazy afternoon wouldn’t be such a big deal. But his public history is one of someone who consistently puts himself ahead of his brands. His Twitter meltdowns and trolling of the Securities and Exchange Commission, show someone more concerned with his own public stature than what impact those moves have on his company’s ability to deliver for customers. On Twitter, or by constantly running from one half-baked project to another, Musk constantly communicates: he is more important than the enterprise his customers are buying into.
The counter-argument is that Musk’s arrogance is a feature, not a bug, as many analysts posit that deposits on unbuilt Teslas, and sales of ancillary products like flamethrowers, only arose because of the magnetic cult of personality that Musk cultivates. Research indicates that founder personality traitssignificantly impact the brand identity of their company. Tesla (and SpaceX and the Boring Company and Neuralink and Hyperloop) all take moonshots precisely because Musk is the type of person who’s willing to publicly put himself on the line, stake a claim, and challenge his team and customers to follow him.
Since relationships begin with shared purpose, it’s no wonder that the world-changing ambitions Musk espouses draw in customers and investors enamored with a vision for the future. But that purpose must evolve into trust, which is what neuroconomist Paul Zak suggests that really drives economic transactions.
Trust takes a lifetime to build, but a moment to break. Every time Musk fails to deliver on a promise, that trust erodes: among customers, yes, but now increasingly among investorswho are wary of whether Musk can deliver. Musk made the Tesla brand subservient to the needs of his own personality, leading to an inevitable outcome: the naturally human stumbles that everyone endures infect the standing of the brand, and erode trust with customers.
Yet amidst the turmoil, he doubles down on his own brilliance — insisting that it’s he, not his customers, who know the best way forward. It’s a demand for trust that seems hardly earned. The lesson here is the same as it is for countless others: the insular deification of a founder is nothing more than PR-driven bullshit that should be ignored(see: Zuckerberg, Mark). The opinion that counts is that of the customer.
In that regard, Musk has much in common with Schultz and WeWork’s McKelvy. In each instance, they placed their own priorities — political gain, social change, or public adulation — above the brand they stand for. For customers, the message is unmistakable: “you matter, but only so much as it can advance my personal aims.”
Christmas 2018 is the first red cup season in years that has arrived absent a significant conflict. Howard Schultz has stepped down from his role at Starbucks, and this year’s holiday cups are striking a new tone. Customers “loved the tradition of Christmas,” according to Roz Brewer, Starbucks’ chief operating officer, and to get things right this year, “we listened to our customers.” The company still struggles with lagging sales and a shrinking footprint, but seems freshly committed to getting one thing right: building a brand driven by the emotional needs of their customers, rather than the egotistical neediness of the founder. If only Schultz can stay out of the limelight.
Ed Lynes is a partner at Woden. Whatever your storytelling needs may be, Woden can help. Read our extensive guide on how to craft your organization’s narrative, or send us an email at email@example.com to discuss how we can help tell your story.