Holland, Michigan – June 13, 2018 – Has a future US Presidential candidate proven his success at leading in times of crisis? A new study shows the leadership style championed and implemented at Starbucks proves successful during dire times.
Howard Schultz, the founder, erstwhile CEO and current chairman of Starbucks, recently announced his plans to step aside from leading the global coffee giant. Speculation is rife that he will be contesting in the upcoming 2020 US Presidential election. Mr. Schultz does not deny it. And, looking at his leadership success in pulling his company out of tumultuous times, we may find America in able hands if he wins.
The study, carried out by Radiant Forest LLC’s Ben Lichtenwalner, compared Starbucks and Southwest Airlines, two long-standing practitioners of what’s known as “servant-leadership” against two companies known for more traditional, top-down leadership styles: Facebook and Equifax. Mr. Lichtenwalner himself is a senior consultant of servant-leadership philosophy in business.
“People often say the servant-leadership principle is too soft and slow to be used in times of emergency. However, in the wake of recent business events, this style of leadership proves to be the most successful in crisis. In fact, servant-led organizations may be deemed as better investments, compared to other corporations that don’t follow similar practices”, read a part of Mr. Lichtenwalner’s report.
Starbucks recently encountered a severe blow to its reputation when one of its Philadelphia outlets had 2 black men arrested for loitering on its premise. The incident quickly sparked allegations of racism against the company. But, keeping Starbucks’ servant-leadership operation module in mind, the company CEO immediately condemned the incident and personally met & apologized to the victims.
Southwest Airlines was also in a dire crisis recently, when an engine explosion killed a passenger. Another champion of servant-leadership ethos, the company responded immediately by offering complete support to the victim’s family and other passengers on the flight.
One contrasting organization, Equifax, faced severe data breach by criminal hackers throughout July 2017. Also a comparison, Facebook was accused of user profile harvesting to influence members with pro-Trump content for the 2016 elections. Unlike the other two companies, Equifax and Facebook did not take immediate action. While Equifax did not inform public about the data breach till September 2017, Facebook did not address its crisis for 4 days.
According to the study, all 4 companies encountered major financial loss, which is natural in times of crisis. But the success of an organization is measured by its speed and ability to bounce back after trouble. With that in mind, the leadership principles followed by Starbucks and Southwest Airlines (servant-led organizations) proved to be more successful in pulling the companies up, compared to that practiced by Facebook & Equifax.
Each of the crises highlighted by the study had at least 3 weeks of data to take into account.
Facebook & Equifax experienced erratic swings in their share value during the three weeks following incidents. According to the study, the share values in these top-down leadership organizations ranged from a 12% to a wildly negative 38% which amounted to astounding losses for these companies. But in the case of Starbucks & Southwest, their share market values showed greater stability as the companies soon earned back the trust of investors.
“No company is immune to financial loss during a crisis. But contrary to the myth, the servant-led organizations have proved repeatedly to be in a better position to handle crisis successfully than organizations that don’t follow the same principle.”
For more information, please visit https://www.modernservantleader.com/servant-leadership/servant-leadership-is-great-in-a-crisis/.
Company Name: Radiant Forest LLC
Contact Person: Trina Weymon
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Country: United States