Monthly Archives: July 2007

Case Study: Forbidden Starbucks

In 2000, Starbucks opened an outlet in Beijing, China, inside of The Forbidden City, the imperial city built in the early 1400s by Ming emperors.

As of July 2007, the outlet is closed.

Why, you may ask?

Several news agencies are carrying reports on what happened, with all sorts of conflicting facts–don’t we all adore the international media for its deep commitment to accurate reporting?

Sifting through a thick fog of half-done research, I think I’ve been able to determine the basic facts. I think they provide a useful case study for American businesses who lack experience dealing with culturally sensitive issues.

Approximately eight years ago, imperial palace management either invited or allowed Starbucks to open a Forbidden City shop. Palace management needed money for renovations and maintenance.

There was a public outcry in China. People were angered at the encroachment of something as foreign and as commercial as Starbucks on an important Chinese historical landmark.

Starbucks was allowed to open the store anyway and went about its business, selling a lot of coffee.

Two years ago, Starbucks, responding to a request from palace management, agreed to remove its logo from the storefront. Starbucks went on, selling a lot of coffee.

In January this year, a popular news anchor for China Central Television, Rui Chenggang (芮成鋼), posted a blog entry on cctv.com calling for the removal of Starbucks from the Forbidden City, asking for signatures and support from Chinese citizens. Some of the news reports quote Rui as having written that having a Starbucks in the Forbidden City “trampled on Chinese culture.”

Note that I cannot get into Rui’s blog archives, so I cannot verify that he actually wrote this. News media translations of written Chinese (simplified or traditional) are often inaccurate.

In any event, it seems that Rui got a lot of support for his campaign, to the tune of 500,000 signatures.

Starbucks was given the choice of running an operation that did not have its logo on any of its products (some reports are indicating that it would have to sell Forbidden City branded merchandise), or shutting down the Forbidden City location. It chose to shut down.

Analysis:

-Before we become too excited about the Chinese public’s possible overreaction to perceived Western cultural imperialism, ask yourself this question: How would you feel about Starbucks opening an outlet in your country’s most important landmark, whether it was invited or not?

-I don’t blame Starbucks for opening the outlet in 2000. Companies are in business to make money, and if you have the chance to make money by selling coffee at the top tourist spot in a country, then you take it. It may have been an impulsive decision (who wouldn’t be excited by such a prospect?), but it is entirely possible that Starbucks was in fact invited to open a shop there by imperial palace management.

-Chinese merchants make American business opportunists look like pikers, so I don’t see the criticism as being aimed at Starbucks’ opportunism. I see that people just didn’t want something so commercial on the grounds of their most important historical landmark.

-Starbucks handled the situation in the only way possible. In opting to leave the Imperial Palace grounds, it stuck to its policy of selling under its own brand, and in doing so, mollified the public outcry against “commercial imperialism.”

-Did Starbucks leave voluntarily? Not really. There are apparently political leaders in China who recently took up the cry against SB’s presence in the Forbidden City. When society and a few politicians are on your back, there isn’t much you can do in a country where people are serious about their cultural sensitivities. There was only one practical move for Starbucks, and it wasn’t resisting the call to close its imperial palace location.

-If your company is ever faced with a similar situation, i.e. there is a loud local outcry against a perceived affront to something sacred to natives of the country you are selling in, take a lesson from Starbucks. Resistance gets you nowhere. A graceful cessation of the activity causing so much offense is the only practical choice.

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The Hands-Off Manager in Greater China

My uncle, Duane Black, and his co-author, success coach Steve Chandler, released a book in March 2007 entitled The Hands-Off Manager: How to Mentor People and Allow Them to be Successful. My uncle sent me a copy of the book in early April, and I read through it immediately. The book is only 207 pages long, but packed with life-changing wisdom.

Yeah, I know. “Packed with life-changing wisdom” sounds like a trite sales pitch. Well, beginning in late April, in one of my presentation skills courses at a large multinational north of Taipei, I asked the participants to prepare presentations on effective leadership. After several practice and coaching sessions, I delivered my own presentation on the same topic, mainly as a way of demonstrating effective presentation techniques. I centered my presentation around what the book teaches about leadership.

What I thought would be a half hour demonstration turned into two full sessions devoted to discussing the content of The Hands-Off Manager. I have since used material from the book in other training courses, and am now preparing proposals for leadership training courses based on the book.

The Hands-Off Manager teaches managers to lead by coaching and mentoring, rather than judging and criticizing. In the courses where I discussed the book, I ended up applying several of its concepts to relationships with suppliers, with customers, and with relatives and friends.

Managers in Taiwan are eating it up.

I’m sure that my uncle and Steve Chandler wrote this book for an American target audience, but it is interesting that groups of managers in Taiwan are so energized by its teachings. The book’s treatment of vision, its encouragement to approach relationships without judgment and to face problems with neutrality, and the advice to fit a job to person rather than try to force a person to do a job he’ll never be great at has really hit home with the people who manage the Taiwan divisions of the multinationals who are my clients.

It’s a small world after all.

The book is not totally devoid of Chinese philosophy. The section on neutrality fits very well with Taoist ideas about Yin and Yang, the two symbiotic life forces whose interaction is believed to have a major impact on health and spiritual and mental well-being.

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