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Post Leadership
Posted at 04:41 PM ET, 08/17/2011

Starbucks’ Howard Schultz makes a pledge: Like a job with that latte?


Howard Schultz, the CEO of Starbucks, pledged to start hiring as well as to withold campaign contributions until politicians fix the budget. And he’s asking other CEOs to join in. (Kevin P. Casey - BLOOMBERG)
Howard Schultz is going on strike against our political leaders. Or at least, that’s how Joe Nocera put it in the New York Times, where the coffee king revealed he is cutting off all of his personal and corporate contributions to politicians in Washington until a sensible deficit plan can be reached.

But the Starbucks CEO doesn’t want to do this alone. He’s recruiting his CEO brethren to boycott making political donations along with him. He’s emailed his pledge to the CEOs of the NASDAQ and New York Stock Exchange, along with other peer CEOs, encouraging them to follow suit. “I am asking that all of us forego political contributions until the Congress and the President return to Washington and deliver a fiscally disciplined long-term debt and deficit plan to the American people,” Schultz wrote.

Who knows whether or not Schultz’s campaign will have a real impact. It has momentum, at least: The nonpartisan organization Democracy 21 has gotten behind it, supporting the initiative, and it’s getting loads of press. The CEOs of both exchanges have forwarded it on to their thousands of members, saying Schultz’s idea is a “great” one and calling for “the collective voice of our CEOs to be heard.” A Starbucks spokesperson says the company has heard from other CEOs who plan to support Schultz’s pledge, though it is not going public yet with their names since the effort is still in its early days.

Getting many CEOs to do so may not be easy. When Reuters reached out to some three dozen business leaders about Schultz’s pledge, the only one who would comment publicly on the idea directly was former BB&T CEO John Allison, who called it “naïve.” “If businesses and executives stop donating,” the Ayn Rand fan questioned, “does that mean pensions and unions will stop too?" 

After all, committing to hire just as the economy appears poised to take a turn for the worse would require CEOs to—gulp—think about the American economy as a whole rather than simply their bottom lines. It would give employees and unions an embarrassing pledge to wave in their faces the next time layoffs took place. And it would mean real courage, confidence and a willingness to risk shareholder angst—in other words, long-term thinking in a very short-term world.

This isn’t the first time Schultz has made noise in Washington about a major national issue. Back in 2005, discouraged about the state of health care and the huge numbers of the uninsured, he made the rounds in Washington, talking to political leaders about what could be done, and sharing his own business model as an example. Disappointed in their response, he convened a CEO summit on health care that aired on CNBC. The moves led him to be called “The Senator from Seattle” by Fortune magazine; as he told me when I interviewed him on the subject way back in 2006, “I didn’t want to be a bystander.”

The story I was reporting at the time never got written, in part because Schultz’s public health-care advocacy efforts, at least, didn’t go much further. Perhaps this campaign will be longer lived. While the right way to reform health care is highly controversial, just about everyone in the country is exasperated by political leaders and wants to see business invest more to create jobs. Schultz has a flair for getting media attention; as long as he’s not perceived as trying too hard to push Starbucks’ image as a benevolent company (a risk that exists, to be sure), he’s likely to bring plenty of publicity to the issue. And withholding funds from political leaders—as long as it happens on both sides of the aisle—is a very tangible and practical action that could actually scare a few politicians into behaving like real leaders.

I think Schultz’s boycott idea is refreshing, and believe there’s plenty of common sense to his jobs pledge, even if it will be tested if another deep recession comes along. One of the best ways to make sure you have more customers for your business, after all, is to help make sure they actually have jobs.

That said, I’m skeptical of his effort’s success. No doubt some GOP-leaning CEOs—of which there are many—will question whether they want to get behind something from Schultz, who has frequently supported Democrats. When it comes to taking public political stands, CEOs are notoriously timid. And to stop the flow of cash from their pockets to politicians’, business leaders are going to want assurances that their competitors aren’t making donations, either. That’s not a pledge many are likely to make.

More from On Leadership:

Paul O’Neill: Only the president can restart America’s engine

Bill George:Enough talk about jobs—where’s the action?

Michael Useem: Revising investor capitalism’s mantra

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By  |  04:41 PM ET, 08/17/2011

 
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